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A Cut Above

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2012 Contractors Of The Year Forge Their Own Paths To Success

Larry Taylor, president of AirRite Air-Conditioning Company accepts the Residential Contractor of the Year Award from Paul Stalknecht, ACCA president and CEO.

How do you measure your success? What does it really mean to be successful? Success is measured in many ways, but for the 2012 Contractors of the Year, success has meant heading down unchartered paths long before the rest of the HVACR industry. Here is how AirRite Air-Conditioning Company in Fort Worth, TX, and K & M Shillingford in Tulsa, OK, have found success and stayed a cut above the rest to be named Contractors of the Year.

Strong Focus On Specific Market Segments

While AirRite Air-Conditioning Company focuses on  residential applications and K & M Shillingford focuses on commercial applications, they both see the need to focus on energy efficiency and performance of buildings and HVACR systems.

For AirRite Air-Conditioning Company, it started in 1991 when Larry Taylor, the president of the company, attended a Lennox Focus on the Future meeting.

“There was a company with a blower door set up and it dawned on me why we had been to two houses side by side and they didn’t get the same heating and cooling,” says Taylor, “Starting then I began studying building science and realized it was the answer to many customers’ problems. Since then it’s been a passion of our business.”

And while it sounds like it was an easy choice and everything simply fell into place that is far from the way the story went. Getting into building science and home performance field takes time, money, and training.

Jay Murphy, president of K & M Shillingford (left) and Peter Shillingford, vice president of K & M Shillingford accept the Commercial Contractor of the Year Award from Laura DiFilippo, Chairman of ACCA’s Board of Directors.

“Entering the home performance field is expensive, because you have to buy all the ‘tools,’ but by having a solid HVAC business it allowed us to make those purchases,” notes Taylor. “You also have to have a strong commitment to the business, not just a verbal commitment.”

There were also obstacles that the company faced on many fronts, but once they overcame those, they started seeing this was a segment of business that didn’t have a season.

“This is a product we can promote all year, unlike just heating and cooling which are cyclical sales,” says Taylor. “And because this is something we can offer in the slower season, we actually can offer customers a better price break, because our labor efficiency is better during that time. It has helped us move from having a busy season and a slow season to having a busy season and a busier season. It has also brought us more repeat customers, because we can stage out the work.”

And Taylor also adds that it has helped the company turn their good customers into great customers and brought in more customers, because they are offering a complete solution to their problems.

Jay Murphy, president of K & M Shillingford and Peter Shillingford, vice president, started out their business interested in energy efficient technologies. In fact, before starting in the HVACR field, Murphy was an aeronautical engineer that worked on solar systems on the side for extra money. It was that venture that led him to geothermal technology.

“When I learned about geothermal I was intrigued by the fact that there was a system that would last twice as long as what was currently being used and was less expensive to operate,” says Murphy.

Murphy and Shillingford teamed up in the 80s, but kept their companies separate for fi ve years before merging.

“We were lucky because we were two companies that were able to meet on a common ground with a good distributor,” says Shillingford. “It took time and dedication to get it all together, but we were successful at putting together a team that worked together in an atmosphere of saving money. And geothermal was a good path, because it was something new and different that set us apart from the competition.”

Since they decided that geothermal was going to be the “bread and butter” of their service offerings, they had to come up with ways to show the value.

There is no dispute from the company that the perception is that geothermal systems are expensive and not a viable for many customers. However, the team at K & M Shillingford has worked hard to change that perception by coming up with some innovative ways to sell and finance geothermal systems.

“When we are working with customers, we make sure that we do a full assessment of their needs and wants,” says Muphy. “Once we have that we can present a full view of what we can offer them, how a geothermal system will benefit them, and the options we have to help them pay for the system.”

And creating options for paying is somewhat of a specialty for the team. One of the best options they offer is geothermal system leasing. “The leasing program has been popular for our customers, because it off sets the initial capital cost of the installation,” say Murphy. “The lease money is provided by third party investors or a lending institution and typically last for 10 years. The customer can buy out the lease at any time during the 10 years. If investors believe that their money will get them a good return on investment it is a good testament that the systems save money.”

Murphy encourages other contractors to look into creating programs like this in their market areas, because he and Shillingford have seen its success in their business and are confident that it would work in other areas.

Educating Customers & The Industry

When you are focusing on market segments that other contractors aren’t, you often will meet some opposition to what you are trying to do or sell. So, a key component to both companies’ success was educating customers and others in the industry about whole home performance and geothermal technologies.

“The biggest hurdle to fight and overcome was the less than knowledgeable competitors telling the customers that they didn’t need whole home performance services,” says Taylor. However, as the industry changed and the “green” movement in America took off, Taylor and his employees had an easier time overcoming all the opposition.

“Thankfully, there has been a market transition, and we were able to educate ourselves, the customers, and the competition at the same time, so there was an overall understanding of why this was a good thing for the customers and the industry as a whole.”

Once AirRite overcame the obstacles at hand they started seeing the benefits of home performance contracting start to roll in. For K & M Shillingford, it was a little different. Geothermal technology has a heft y price tag and showing the overall, long term value was a little tougher. To overcome this, they decided they needed to be involved the from ground up, to ensure its success.

With their knowledge and dedication to adopt geothermal in the early stages, it was only natural that the industry came to them to help grow the technology. For example, they were approached by geothermal manufacturers to install prototype systems throughout the United States and abroad for military bases resulting in thousands of installed geothermal systems throughout the country.

“Whenever asked, we help manufacturers better their product offerings,” says Murphy. “It makes the technology more user-friendly and more people will be willing to look into the opportunities. We didn’t really do it to increase our business, but being known has experts has increased the number of projects we have gotten.” Getting the community on board was also important, because it helped buy-in for a sustainable technology that benefits everyone and saves money at the same time.

“We give our time to local schools and the utilities, because if they are aware of the benefits it is directly going to benefit the consumer,” says Murphy. “It’s not just trying to convince them that this is the technology they need, it’s about being able to educate the community to the options that are available and how much economical sense it truly makes.”

“It’s also given us exposure, because we are seen as the authority on geothermal, so people come to us first,” adds Shillingford.

Through the education of the community, K & M Shillingford has been able to help some of the local businesses and government buildings increase their energy efficiency through geothermal upgrades. Their willingness to continue to educate keeps them top of mind and their business thriving.

Train, Train, and Train Some More!

Both companies admit they wouldn’t be where they are without a solid training program. When it comes to AirRite, their training focus is straightforward and employees receive what most would see as an added incentive outside of better job performance.

When it comes to training, Taylor explains, “You have to check your ego at your business’s door. You have to change your thought process about training and be a champion for your program, or else your employees won’t buy into it and it will fail.”

And he admits that getting buy-in can be tough, so they tried some new tactics.

“You have to deprogram and reprogram people to understand the training process,” he May 2012 says. “We tried to get employees to take classes, but we struggled with it so we created a competition program. Now, if an employee takes four-plus hours of training in a month, they get a small monetary bonus. The person who has the most hours in each month, quarter, and year also gets additional bonuses.”

The competition changed AirRite’s company culture. They now see themselves as a training company, not just a contracting company. And to show just how serious the team takes training, for the past three years, they have received recognition from Lennox for being the contracting company with the most training hours.

For K & M Shillingford, training is seen as an essential part of their organization, because as Murphy says, “It’s the guy in the truck who is the face of the company, so we have to make sure they are the best and we provide them the support.”

Because Shillingford and Murphy built the company from the bottom up, they realize that it is less expensive and easier to keep employees. So, they encourage growth and get their employees the training they need to be successful. In turn the company has enjoyed low turnover over the course of 25 years.

“We reward our employees who grow,” says Murphy. “We praise them for their hard work and ability, and when we need to we defend their actions. It helps us keep a united front and our employees are loyal and won’t just jump ship for an extra dollar.”

“Having a strong team-oriented company not only helps with our current employees, but it also gives a lot of confidence to new hires that we are a great company to work for,” adds Shillingford.

Looking Ahead

Neither company is sufficed with sitting back and enjoying the recognition of being Contractors of the Year.

In fact, Murphy and Shillingford are even more excited about geothermal technology and increasing its use throughout the U.S.

“We’re not afraid of the technology and we are going to continue using it,” says Shillingford. “We are one of the oldest geothermal companies in the country, and we will keep going and adapting to the changes that come up. That is the only way we will be able to continue.”

Taylor’s excitement is right in line with K & M Shillingford’s. “AirRite is an extremely successful company and we are very proud of that, but we can’t stop and rest,” says Taylor. “We must continue to be leaders and innovators, not only in our market area, but the industry as well.”

Taylor continues, “Home performance is the current ‘buzz’ in the industry, so there is less profit to be found. But  that is normal and we are now looking out to see what the next big thing coming for the industry is, so they can be early adopters in that field as well.”

Posted In: ACCA Now, Residential Buildings

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