Save Your Company: Don’t “Fall” Into A Seasonal Slowdown
To prevent lagging profits in the fall, HVAC contractors sing the same tune: Actively market maintenance contracts year round.
For example, when customers call Presidential Heating & Air Conditioning, Inc., Gaithersburg, MD, they hear about the benefits of maintenance contracts from three employees: the receptionist who answers the hone, the person to whom the call is transferred, and the technician who visits the home.
By the third pitch, customers have had a chance to consider the advantages and make up their minds, says Christopher Nixon, general manager, and the technicians can sign them up while visiting the home.
Bob Logan, general manager, Plumbline Services, Denver, CO, also places a high priority on maintenance contracts. “One of the main things we do is make sure we are continuing to build our maintenance contracts,” he says. “Right now, we have approximately 6,000 maintenance contracts. We’ll visit those clients in the fall, and that keeps most of my guys busy.”
In preparation for autumn’s slow days, he also runs specials on low-dollar tuneups, such as a $49 furnace inspection, using a variety of advertising sources, including Valpak, the radio, and Money Mailer. “We’ll pull the cabinet, check the motor, heat exchanger, temperatures and pressures, and just make sure the system is operating efficiently and within specs,” Logan says. “It’s been very successful to fill in the gaps.”
Although it is a loss leader, a $49 client visit accomplishes several objectives. “I can keep my guys busy enough to where they are getting their paychecks and they can pay their bills and I don’t lose them,” he says. “On the flip side, I tell all my technicians, I don’t care if it’s $20, $200, or $2,000, our goal is to win that client for life. Hopefully, when they get out there, even if they walk away with $49, they’ve won that client over and when they need services in the future, they’ll call us back.”
Another advantage, he says, is a $49 special often attracts customers with older equipment that hasn’t been serviced in many years and may be in need of repair. “Typically, when you add in additional service, we’ll average about $350 per call,” Logan says. “About one in 40 will turn into a replacement. Our average replacement is just under $9,000.”
Plumbline, which has 115 employees, will do just over $20 million this year in sales and service. Because it also specializes in plumbing and electrical work, which customers need year round, Logan indicates the company’s bottom line may not be hit as hard by the shoulder seasons.
Nevertheless, he doesn’t skimp on his advertising budget. “We constantly have our name out there,” he says. “We’re in just about every yellow pages. We’re on the radio. We’re in about every media there is. We just know you have one of two choices: Either you advertise a lot to keep your guys busy during the slow seasons or you live with it and let them go and try to bring them back. We choose to do everything we can to keep them employed.”
He is happy to point out that the company has not laid off anybody in its 18 years of business.
Follow-Up on Recommendations
Not everyone is a fan of low-price loss leaders. Nixon ran an inexpensive introductory special a few years ago, thinking he would get a lot of business. “We got people who were looking for the lowest price. They weren’t looking long-term,” he explains. “Sometimes being in the middle is a good place to be. We’re not usually the lowest, but we bring a lot to the table. We take care of our customers and do the best job we can. You can’t do that by being the lowest.”
One tactic he has successfully employed to keep busy in the fall is to follow up on previous recommendations. “When we talk to customers during a maintenance visit, any recommendations we make go in a file. During the slow times, we go back and revisit anything that hasn’t been done already. We may call the customer and say, ‘This was recommended. Have you had a chance to think about it?’ We may even offer a discount to help get the business.”
He estimates that one out of three of those callbacks generate business for Presidential, which has 30 employees, averages $4 million in sales and service annually, and has 1,500 maintenance contracts.
“Keeping track of prior recommendations that may not have been done has helped us a lot,” he says. “Even six months down the road, if you have a file alert or something you can look back on, you can reach out to customers who may have forgotten about your recommendation. All it takes is a phone call.”
Marketing to Existing Customers
To boost business in the fall, Samm’s Heating and Air Conditioning in Plano, TX, reaches out to current customers, says Paul Sammataro, president. “Our primary technique is marketing to our existing base first and foremost regarding fall safety and maintenance tune-ups. We’ll do email marketing and postcard marketing. Depending on the year, we may do a newsletter.”
The first promotion, which is usually in late September or early October, may say something to the effect of “Cool weather is on the way. Call now to schedule your precision tune-up and maintenance and safety check. Be ready before the first cold spell hits.”
“We try to generate a sense of urgency so people do not to wait until it’s cold,” Sammataro says. “In Texas, we could be running our air conditioning until December. We start early to plant that seed.”
He indicates a postcard mailed to existing customers typically gets right around a 15 to l7 percent response rate. “Believe it or not, we get a better return on the postcard than we do on the email,” he says. “People are inundated with email. We may send out an email and get less than 5 percent. That’s pretty consistent. Originally, when I went to email, I thought, ‘This will eliminate the postcards altogether.’ It didn’t work out that way.”
According to Sammataro, email does have a major advantage over snail mail: It’s timely. “If there is a sudden change in the weather, I can reach out to our customer base and create a sense of awareness that we’re here and it’s time to consider your precision tune-up and maintenance. That is what carries us through the slow times.”
For example, when the temperature drops, he might send an email that says: “Cold weather has arrived. Now is the time to call and get on the schedule for your precision tune-up and maintenance.” He might add a line such as, “Of course, if you need service we’re always here for you” or “Those who are already scheduled, thank you.” He ensures the email includes a picture of somebody bundled up, surrounded by snow, and looking cold.
The company, which employs 14, did close to $3 million in 2015. Primarily a residential service and retrofit company, it once paid for a full-page ad in a local home magazine for a full year. “I have to say that was a major disappointment,” Sammataro says. “The magazine did not work for me. In the past, I’ve done web banners, Pay Per Click, magazine, TV, and radio. We’re all looking for the magic bullet of marketing. I’ve found for me, marketing to my existing customers works really well. We generate a lot off of maintenance.”
Regardless of your market, the key to keeping busy when the weather is mild is keeping in touch with your customers. Make sure you have a plan in place now, so when the summer rush slows you don’t get caught without business to keep your team busy.
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