Elements of a Marketing Plan

When you talk with small and sometimes medium-sized contractors about the need for a marketing plan, you can almost see eyes roll. Many such contractors got into business for themselves so they could be their own boss. The ones who successfully survive the startup years then often find themselves a victim of their own success. They find that their business is succeeding, often beyond their own expectations, yet they don’t want their role in the company to change. If profitability is to be maximized and further growth achieved however, their role must change. It must evolve from being a startup entrepreneur and knowledgeable technician to a business owner. In short, they must learn to work on the business as opposed to in the business.


Elements of a Marketing Plan

Courtesy of Chriscolotti .us

Recently we published a blog about the need for having a marketing plan. Such a plan need not be long and complicated, as we will illustrate in this blog. Essentially, there are 3 elements of a marketing plan, and they are:

  • Promotions Planning Calendar
  • Marketing & Advertising Calendar
  • Marketing & Advertising Budget


What are promotions? In short, promotions are offers that give your customers and potential customers a reason to contact and purchase from your firm. The stronger the offer, the more likely you will be contacted. Depending on the makeup of your operation, you want your promotions to address the following areas in your business. Residential Replacement Installations – IAQ Accessories – Demand Service Calls – Service/Maintenance Agreements.


There are a number of sources you can tap in order to develop your promotions. For example, equipment suppliers or manufacturers typically offer consumer financing or equipment rebates at various times of the year. The downside to these is that many contractors have access to the same or similar programs from competitive suppliers. Sometimes government entities and local utilities will run promotions for efficiency upgrades as well, but again these are available to everyone. Perhaps the best source for offers come from in-house promotions. While these may or may not have the opportunity to attract supplier or government money to help fund them, you have complete control over the type and timing of the promotion. The creativity for in-house promotions is limited only to what you can devise, and the advantage here is that no one else in the market will be offering what you are. The following table is a small example of the different types of in-house promotions you can develop – let this serve to fuel your own imagination!


The next blog in this series will discuss when and how many types of promotions you should run, along with how you make people aware of these offers.


Product Related Service Related Other
Free Thermostat Free 2nd Year Service Agreement Free Gas Grill
Free Merv Filter/ Upgrade Extended Warranties Free Christmas Tree
Free CO/Smoke Detectors Product Checkup Discount Cause Marketing Offer
Free evaporator coil with AC purchase Duct Leakage Analysis and Sealing Event Tickets (i.e. ballgames, museums etc.)
Free Humidifier Air Distribution Analysis Getaway Vacation
Free Energy Analysis Free Blower Door Test Staycation Package
Free Duct Cleaning Svce Agmt W/combo Pch Free AC Cover
Free Attic Insulation Total Performance Diagnostic Through Call Smart W/Service Call Consumer Electronic Giveaway (i.e. TV, Tablets etc.)
Free Dehumidifier Reduced Rate Service Calls For Certain Time Periods Free American Flag & Mounting System
Free Grill/Register Upgrade Free Evaluation for Generator W/Service Call Free Thanksgiving Turkey


Courtesy of The HVAC Business Dr.



It’s Time to Get Serious about Workforce Shortage In the Trades

It’s Time to Get Serious about Workforce Shortage In the Trades

Courtesy of about-salary.com

For the past 40 years a common sentiment expressed throughout the construction trades industry has revolved around the shortage of new incoming talent. While there have been individual and collective efforts to do something about the problem, these efforts have been lackluster and largely ineffective. “Our industry is just not seen as glamorous as other professions,” many bemoan.

The topic has been a frequent one in the trade press. The November 9 ACH & R News featured the latest such discussion. “We hear it everywhere we go,” the article opined. “There is a shortage of HVACR workers, and the industry needs new blood.” The writer had attended the Plumbing Heating Cooling Contractors Association (PHCC) 2015 Connect Event in October, where the topic was top of mind for many contractors who couldn’t seem to find enough skilled workers to fill their payrolls. The article nailed it when they said talk is cheap when it comes to actually solving the problem.

How critical is the shortage? According to the article, the North American HVACR industry will need 100,000+ new technicians and installers in the next 7 years just to keep up with demand. The executive summary of a study by the HVACR Workforce Development Foundation indicated that the number of mechanic and installer jobs will increase by 21% through 2022, which is nearly twice the growth of employment overall. In the face of this demand, the foundation also found that nearly 60% of instructors reported their programs are under enrolled, and to make matters worse 50% of North American instructors have indicated they will retire in the next 10 years.

They say under every problem lies an opportunity. Today we are hearing about the epidemic of college debt and how it is strangling the future of those who have incurred it, but there is at least one political candidate running for president who seems to understand the problem – and some potential solutions. During the Republican presidential debate earlier this week, Marco Rubio stated that “The American private sector is going to create not just millions of jobs but millions of better paying jobs. But better paying jobs are going to require more skills, which is why the second thing we have to do is to modernize what we mean when we say higher education. For starters, I do not understand for the life of me why we became a society that told young Americans that trade schools and vocational training are for kids that aren’t smart enough to go to college. A welder makes a lot more than a philosopher,” Rubio quipped and then added, “I want to be the vocational education president, not someone that celebrates these jobs in hopes the private sector creates them, but someone that actually makes it easier for people to go into those fields.”

There it is, someone finally said it. Now, let’s actually do something about it!

The Power of Call Smart

When we selected a component on our original screen, we had an opportunity to answer some questions from the customer. If for example on the motor, the motor showed excess wear on the bearings, at the end of the service call we would print out a What Our Customer Ask Report. This tells a customer that we found an area of concern, here is why this happened, how our technician found it, what we would do to repair the situation, how you can prevent it from happening again and does this repair make good economic sense. At the end of the service call, instead of the customer receiving an incompletely filled out invoice that is difficult to read, your customer can receive an invoice, a report of what you found and a diagnostic summary from a third-party. This expansive information allows you to be the consummate professional in your market area!

The Power of Call Smart

Courtesy of TKworldwide.com

In addition to all this, you get other powerful reporting through the web portal of Call Smart. You can see how many times your tech presented an agreement, how often it was accepted and the average revenue per ticket. You could be sitting on the beach thousand miles away from your shop and see what your techs are doing, as long as you have access to the Internet.

Callahan Roach carries this a step further by assigning you an analyst who runs monthly reports and makes a brief phone call to review the information with you. This helps you maximize opportunities to make revenue, while doing a thorough diagnostic job. It’s like having your own consultant on call, and these individuals have years of experience in the field.

The final question remains, how much is Call Smart? First of all, there are no out-of-pocket expenses so it is very cost-effective. You tell us what you want your flat rate pricing based on, we calculate the repairs and when the repair goes to the ticket, we put in a small $2 fee on top of your charge. We get paid out of that fee and only get paid for service tickets that generate revenue. No more monthly payments, especially in slow months. If you are not creating invoices, we are not getting paid. Because the fee is on top of what you charge, it is a direct pass-through to the customer. The more volume of service tickets you generate, the less the dollar amount of that $2 you will pay to Callahan Roach. Call us today and put the power of Call Smart to work for your business!

Do You Have a Marketing Plan?

Does your business have a marketing plan? Is it documented? If you don’t, you might be asking yourself, “What is a marketing plan anyway, and why do I need one?” Those questions represent a good place to start.


Do You Have a Marketing Plan?

Image courtesy of manhabrasileira.com

Most people think marketing is just advertising or perhaps they think of it only as selling, but it is much more than that. Marketing is an umbrella that encompasses everything from market research to name recognition, to lead generation, to advertising, to sales, to sales and lead tracking, follow-up and customer retention. In short, marketing is the single word that describes everything in your business related to finding, getting and keeping a customer.


“Well,” you say, “I know what kinds of customers I want, I know how I want to advertise to them and I know what my selling proposition is. Isn’t that enough?” If that is your plan, that puts you in the majority. It has been reported that 77% of all contractors do not have a documented marketing plan! “Why do I need to document it,” you ask? There are actually four good reasons for documenting your marketing plan. Better Results. When you document your plan and map it out, it will create more leads and selling opportunities then if you don’t. Better Timing. When you document your plan and map it out, you will be creating opportunities during the timeframe of your choosing, as opposed to reacting to market conditions. Better Use of Funds. When you have a documented plan, you are less likely to spend money emotionally or on impulse. You will find that your funds go further and have greater impact. It is not unlike going to the store with a list – you’re much more likely to spend less money and make fewer impulse purchases. Better Communication with Staff. When you have a documented plan, your staff will be aware of your promotions and will be positioned to communicate these offers both to your customers and others they come in contact with.


A marketing plan need not be long, complicated or take a long time to prepare. Future blogs will delve into the elements of a marketing plan in order to give you the basics for putting together your own. Remember however, as the owner of your business this is not something you can delegate to others. It is one of the elements which separate owners who work on their business from those simply working in their business!


Courtesy of The HVAC Business Dr.

What Is a Top Rate Contractor?

Don't Make Your Customers Look like This

Don’t Make Your Customers Look like This

I had a recent experience with a service contractor who shall go unnamed, but unfortunately the business practice they displayed is still all too typical in the contracting trades industry.

We needed some work done at the house, the same type of work that a number of homes in our neighborhood are looking for.  One of her neighbors had spoken with a contractor who gave her a preferred rate for his services, based upon leveraging that work across a number of homes in our subdivision.  I called the contractor and he sounded knowledgeable and well-organized over the phone.  He came to our house at the appointed time, evaluated the work to be done, showed us samples of his work, provided references and gave us a price.  It was a verbal price, he did not follow with any type of written quote.  Nevertheless, we told him we wanted to follow up with his references so we could see for ourselves the quality of his work.  When we did, we weren’t overly pleased.  It wasn’t that the quality of his work was bad, it’s just that it wasn’t great.

A relative of my wife’s had the same work performed in her home 10 years ago and was quite pleased with the contractor they used.  The quality of the work still shown after 10 years, so we contacted this company.  Based on not being overly satisfied with the quality of work by the first contractor we first had out, we made an appointment with the second company.  The day they were to come out, they called and said they were running late and would make it late in the day.  They didn’t.  Come out or call.  Rather, they called the next day and wanted to know if they could come by that morning.  Even though we were a bit irritated we said yes.  When the contractor came out, she seemed very knowledgeable and answered all our questions.  She evaluated the work to be done and provided references where we could see her work.  She promised to drop off samples later that week.  She didn’t.  The following weekend after she was out, we followed up on her references and were very pleased with the quality of their work.  Based on that we called to remind her about the samples, which she said she would deliver in the next couple of days.  She did, and based on everything we knew we contracted with her for the work, even though her price was about 10% higher than the first company.  It seemed well worth it, and due to our discussions with adjoining neighbors she sold another job next door.  She described her schedule and gave us a 5 day window for starting and completing the work.

On day 4 of the window I called the contractor because I had not seen or heard from them.  She called me right back and said the previous project they had been working on had taken a little longer than she thought so that they would start the following Monday.  As I was expecting this response, I was not particularly bothered by it but I know some homeowners would be.  Monday came and went with no sign of the contractor, but with some concern for the weather the remainder of the week.  Inclement weather would only delay the project some more.

As of this moment it is 5:30 PM on the “following Monday”, and I realistically don’t expect her phone call until Tuesday.  I know we will eventually complete this project and be happy with it, but I will not be giving her company the rave reviews her work will most likely have earned.  While I have no reason to doubt their technical competence and quality of work, their business practices are terrible.  Contractors, take note.  In this day and age it is no longer sufficient to take pride in your quality of work.  Your overall business practices must be of the same caliber as your work if you are to truly call yourself a top rate company!

We’re from the Government Part 3

We're from the Government Part 3Sometime back we wrote a two-part series entitled We’re from the Government. Those articles pointed out that in the first 100 years of central heating in America, there were no lawsuits relative to furnace efficiency. The article went on to point out that since the Department of Energy has become involved in regulating energy efficiency in 1987, the environment has been one of constant litigation.

Recently, the Department of Energy settled a lawsuit challenging its June 2014 rule that set 19 new energy conservation standards for walk-in coolers and freezers, including standards for panels and doors. The settlement vacated a number of contentious parts of the rule and remanded them for rulemaking, while at the same time delaying enforcement of the remaining standards.

The lawsuit was brought by The Air-Conditioning, Heating and Refrigeration Institute (AHRI) and Lennox International whereby the petitioners argued that DOE had made multiple errors when formulating its final rule and had set standards that were neither technologically feasible nor economically justifiable. Prior to taking the matter to court however, they petitioned DOE to consider its rule outside of court, but were denied the petition. This is a pattern that typifies DOE’s approach to rulemaking and the problem seems to be getting worse.

The HVAC industry is dealing with more than 15 regulatory changes at present which is an unprecedented amount of regulatory activity according to Karen Myers, VP of Government Affairs for Rheem Manufacturing Company. Rusty Tharp, Dir. of Regulatory Affairs for Goodman Manufacturing Company concurred. “It goes without saying that as the number of DOE rulemakings increase, existing minimum efficiencies increase and new test procedures and energy conservation standards are promulgated, we find ourselves devoting significantly more resources toward regulatory matters.” According to John Hearst, VP Government Affairs and Communications at Lennox International, “The end result is costly litigation and delays. Innovation and the market drive these advancements, not government regulations. We are primarily concerned with negative impacts on our customers or end-users and a corresponding market disruption,” he said “The DOE is planning to promulgate 23 new standards affecting our industry between 2015 and 2018,” Hearst said. “The regulatory pace continues to accelerate, and all stakeholders should consider the opportunity cost of having industry resources focused on regulations versus innovation.”

Are you listening Department of Energy?

Part 1: We’re from the Government – And We’re Here to Help You

Part 2: We’re from the Government – And We’re Here to Help You… Part II

Call Smart – Invoice, Payments and Receipts Screen

Sample of invoice generated on a smart phone

Sample of invoice generated on a smart phone

After the customer has authorized the work to proceed with their signature, the system converts the estimate into an invoice. The invoice has been broken apart by system, so it is extremely detailed. We can accept payment by credit cards, cash, check or return to the office so the invoice can be handled another way. If we accept payment on the jobsite, it will be marked paid and the type of payment is recorded. Now we can mark the ticket complete – or incomplete if we have to order parts or need some type of follow-up. The technician can also add notes that can’t be seen by the customer and are only visible by the office. You can print an invoice for the customer at the jobsite if you are so equipped, have an invoice mailed from the office or e-mail the invoice to the customer, generated in a PDF format. Now the service tech can close the service call.

Summarizing Call Smart’s Best Features

  • It is highly customizable
  • It runs on multiple platforms
  • It comes with unlimited free support on Internet and phone as long as you own the product
  • It has extremely high visible impact which encourages interaction with the consumer
  • It tracks recommendations versus accepted repairs, allowing for same story to be told amongst varying service technicians
  • It incorporates an incredible tool called Total Performance Diagnostic, which calculates how the system is functioning without the need for putting gauges on the unit. If the Total Performance Diagnostic tool tells you the system is operating at 90-95%, there’s probably not much you can do to improve it. If in turn this allows you to avoid putting gauges on every unit and only on those which need it, that saves you time and the customer money. In addition, it provides third-party validation about operation of equipment to your customer. They can see both the capacity and efficiency that their unit is operating at, along with suggestions for how the operation of their system may be improved.


Cash Versus Accrual Method of Accounting

While many people have heard the terms cash accounting in the accrual method, some may not be aware of the exact differences between the two. In this post, we will examine each along with their relative advantages and disadvantages.

Either accounting system looks at activity for a specific period of time. Typical periods include month end, year to date and year end. Each of these is a way to measure how your company is performing. Both systems look at the same activities in a slightly different way. The three types of activities we will look at are the accounting for the sale or revenue collected, the accounting for the cost involved (both cost of goods sold as well as overhead expense to support that sale) and the resultant net profit. Let’s look at the cash method of accounting first.

Courtesy WordPress.com

Courtesy WordPress.com

Under the cash method of accounting, a sale is booked when you collect the revenue from it. Therefore, if you ran a service call in July but were not paid for it until August, you would account for that revenue in the month of August on your books. When we look at the cost of performing that call, there are two aspects involved. The first is the direct cost which can be directly attributable to a specific customer or sale. This is called the cost of goods sold. For example, if we send a service tech Billy out to Mrs. Smith’s house to run a service call on July 12, we will account for the cost of the service techs time in the month of July – even though we may not have been paid for that service call until August. The second aspect of cost is called overhead. Overhead represents costs which are incurred to support sales but which cannot be attributed directly to any one sale. For example, the cost of rent for the building that we are using for our business is required for all the business we conduct, and therefore would not be attributable to any one specific customer. In the case of the service call for Mrs. Smith, overhead to support the cost of her July 12 overhead would likely have been paid in July and would have been accounted for accordingly. Net profit for the service call would not be recorded until we had received payment for the call, which would have been in August – so that’s when it would be accounted for in this case.

So how does the cash method differ from the accrual method? The accrual method accounts for revenue, all costs and net profit when the expense occurs. Therefore in the above example of a July 12 service call, all activity would be recorded during the month of July. Based on this, you can see where the accrual method will paint a more accurate financial picture of the activities of your business, but the sales method of accounting is less complex. Which is better for your business? That is best left up to a discussion between you and your accountant or financial professional.

Courtesy HVAC Business Doctor

Treating a Customer like a Second-Class Citizen

Treating a Customer like a Second-Class Citizen

Courtesy of global teleforcesocial.com

Recently I read an article in a trade publication that talked about the best way to deal with a customer who only wants to hear about lower prices. Have you ever had one of those? Of course you have. My issue is not with that type of customer, after all, all of us have the made some type of purchase where price was our driving influence. That doesn’t make us bad customers or second-class citizens. My issue is with this article and how the writer suggests we handle this type of customer.

The writer first suggests three things that make sense. He suggests that you not train the customer to push for lower prices by making price the primary subject of your conversation. He also advises that reducing your price with a customer trains them to push for that in their next transaction with you. Finally, he says that you should not ask the customer to make sure they give you the last look. Doing any of these things is like shooting yourself in the foot. Doing all of them will certainly cripple your chances for profitable selling. No argument here.

As long as you are not doing the things described above, the writer suggests that a true price driven customer is one that does not respond to any value added proposition, has no problems to solve (if this were the case, why would they be talking to you in the first place) or goals in which you could assist with, and one where you are talking to the ultimate decision-maker. If that is the case, the writers suggest you have a frank conversation with the customer and explain that you can no longer afford to call on them in person and that you should ask them to e-mail you their specifications. Better yet the writer suggests turn them over to an inside sales person who will deal with them exclusively on the phone.

I am not advocating that you not spend your time where you can achieve the best return for your company, but I would draw the line at letting a customer know you think they are second class material because they’re only interested in price. Just because they’re only interested in price with regard to this particular transaction, you don’t know that they will be on the next transaction. If they sense you do not value their business for any given reason, they may well look elsewhere the next time they need a product or service which you can offer. The key is to make every customer feel like a King, even if they are only a prince!

Call Smart – Estimate And Service Agreement Screen

Call SmartWhen we go to the estimate screen, the system has the ability to look back at previous calls. For example, in this case, the system looks back and sees that a contractor was recommended but declined by the customer on the last service call. The system provides the tech with the opportunity to again make this recommendation to the consumer. Regardless of which technician makes the call, the system allows them to be consistent in their conversation and recommendations to the homeowner, not only for the type of work that needs to be done but for the cost of the repair as well. Once the work is done, the repair is removed from the pending list. The estimate screen provides the customer with everything they need to make a good decision. If a recommendation is declined, it goes to the bottom of the page in a pending status until the next service call. It doesn’t simply languish on the service ticket somewhere sitting in a file cabinet.

Now the service technician is well positioned to present a service agreement. The service agreement screen shows the details of your customized program in a way that allows any technician to present the pertinent features and benefits succinctly, yet completely. It also means that no matter who the technician is on the call, they will present your service agreement program the same way to every customer. The system will automatically track the service agreement regardless of whether it was accepted or declined. If it was accepted and your program allows for a discount on the invoice, the system will automatically compute the correct amount.

At this point the customer has the opportunity to authorize the work by signing the invoice. They first accept the terms and conditions on the screen, then they provide their signature which converts the estimate into an invoice. A review of these two screens yields the following key opportunities for enhanced profit.

  • Previous work needed but declined by the customer is brought to the attention of the technician, regardless of which one is on the call, who can then present this again to the consumer
  • The service agreement screen will prompt every technician to offer your customized agreement in a way that will clearly and concisely allow the consumer to make a decision
  • If the consumer agrees to a service agreement, any potential discounts are automatically computed for the technician
  • Every invoice will have a recorded signature which also shows that the consumer has agreed to your terms and conditions

In the next Call Smart blog, we will discuss the invoice, payment and receipt screen.