Business Builders


Pricing, Value and Discounting   Recently updated !

This is the pricing model for too much of the HVAC industry, High-Value/Low Price

To discount or not to discount, that is the question.  When should you do it?  How often should you do it?  Who should be in charge of it?  What are the price of your products set by?  Are they set by what the market will bear?  (Bad idea) Are they set by a cost + model?  (Better, but not ideal by any means)   Do you even know?  How should they be set? The answers to these questions are critical to the success and profitability of your business.

Product pricing is one of the most strategic elements of the marketing mix in your entire business arsenal.  You can’t afford to get it wrong.  In simplified terms, you need to first decide what kind of value proposition you want your business to model.  Do you want to run a high-volume, low-margin model?  Do you want to employ a high-value, high margin model?  Most businesses in our industry are somewhere in between, if they have even thought about it.  So there you are – think about it!

If you wish your company to be seen as a professional organization that operates above the run-of-the-mill contractor, with knowledgeable service and installation people, professional looking vehicles etc., then you must price for it.  First, you must know your costs.  Then, once you have a firm idea in mind of what you want your business to look like in the eyes of the consumer, determine what level of profitability matches that look.  What about local market prices for your products and services, where do they come in?  It is important to know what your competitors charge in the local market, but that should only be a measure of where they stand versus the value your organization brings to the consumer.  The problems come when your prices are either too high for the value you offer – or too low.  Anyone in your organization who comes into contact with a consumer simply must know and buy into your organization’s value proposition.  They must be convinced that what they are asking the consumer to pay is worth it.  If they have a problem asking the consumer for a fair price relative to value received, you have the wrong employee.

What about discounting, when is it appropriate?  Do you know what percentage of your company’s sales are discounted?  If not, that is a good place to start.  Excessive discounting can be like a disease that slowly but insidiously eats away at the value of your company from within.  Your sales and service people need to have clearly identified guidelines as to when they can and cannot discount.  If they are paid a commission, it should be lessened if they close the sale by discounting it.  It is important that they personally understand the connection between discounting and profitability, both personal or organizational profitability.  Excessive discounting, either in the level of discount offered or the frequency of how often it is done will leave your customer confused and worse.  The worse part potentially manifests itself in consumer mistrust of your organization.  That makes it harder the next time you try to convince the consumer of the value you are providing with your organization, product and service.  In addition, by discounting you’re training the consumer to ask for a discount again next time.  Think Sirius Satellite Radio.

What is a better path of showing value?  Consider the following.

  • Take the time to understand your customers needs and desires
  • Clearly present a solution that you believe satisfies these needs and desires
  • Make sure to link the benefits of your product and service to your customers needs and desires

If you must discount, make sure you commensurately reduce the value of the product or service offering.  (offer a lower SEER rated air conditioner for example) By doing that, you are maintaining the integrity of the value proposition and not confusing the customer.


Leaders Versus Managers

Leaders Versus Managers
Leader or Manager, the direction couldn’t be more clear!

Would you describe your boss as a leader or manager?  If you are the boss, would you describe yourself as a leader or manager?  Odds are, if you are the subordinate, you might describe your boss as a manager, but if you are the manager, you might describe yourself as the leader.  Does it really matter, is there a difference?  Webster’s defines a manager as a person responsible for controlling all or part of a company, a person who controls the activities of an employee, a person who is in charge.  They define a leader as a person who leads or commands a group, a person who is the principal player in a group.  As the person in charge, which would we rather be?

I think we would all agree that we would rather be a leader than a manager, and we would rather work for a leader than a manager.  So what are some of the key behaviors that a leader should cultivate which will cause employees to actually want to work for them?  The first one is easy to understand, but sometimes hard to do.  Learn to listen to your employees, really listen.  They are the closest person to the task you ultimately have responsibility for, so they likely have the best perspective on how to best accomplish the task.  Listen to what they have to say about it.  By listening as opposed to telling, you will better understand aspects of the task that they struggle with because of lack of knowledge, improper tools or difficult conditions.  You may ultimately disagree with their assessment, but if you dismiss their feedback out of hand, you will start to lose their trust.  You may also learn something that can help you make the task easier and more efficient for your employee (s).

Instead of telling your employees about a task, show them or let them know why it is important.  When they are connected to the bigger picture of a task, they become more committed to it and in seeing it done correctly.  There is no better time for this then after a mistake has been made.  How many times have we made a mistake on the job, only to be yelled at by our boss about it?  How did that make us feel?  If you are a leader, you use mistakes by your employees as training opportunities.  If someone never makes a mistake, they are not trying hard enough.  Mistakes are normal because people are human.  A mistake is only bad if we do not learn from it and implement corrective action.

As a manager, your focus is to control a group of people in order to achieve a desired output of work.  As a manager, you are driven by power and control.  Managers often not only plan out the work to be done, but they also want to tell employees how the work should be accomplished.  When something doesn’t get accomplished in the proper quantity, quality, or timeframe, a manager’s focus is on blame – often making sure it does not reflect on them.  A manager’s focus is typically short-term in nature, this week’s production, this quarter’s goal etc.  A manager sees their job as conforming to the rules as they understand them, and making sure that everyone abides by them.  Managers are typically more task focused than people focused.

As a leader however, your focus is to influence, motivate and empower others to achieve a collectively desired goal.  As a leader, you are driven by seeing others succeed and grow while achieving organizational benchmarks.  A leader uses their influence to motivate others.  Instead of telling their employees what needs to be done and how it is best accomplished, leaders set a tone by letting their employees see the big picture of how their collective tasks fit in to the whole.  Leaders encourage their employees and are not bound by past precedent.  Leaders have a longer-term focus, and see mistakes as an opportunity for learning, not for blame.  Leaders find ways to motivate and inspire others, and are typically more people focused in how they accomplish a task. So, are you a leader or manager?


Tolerating Temper Tantrums

Tolerating Temper Tantrums
When you see this behavior, you must act quickly to nip it in the bud.

We are all familiar with temper tantrums thrown by children, some of them have been from our own kids!  What happens however when adults throw a temper tantrum at work?  For example, what should you do if an employee, enraged over a phone conversation, rips the phone from its cord and throws it across the room?  If the employee is a top performer or essential employee, do you ignore this behavior?  Should you?  The answer is – absolutely not!  Tolerating such behavior essentially tells other employees that doing such things is okay, and it provides cover for them to do something similar.  In addition, you are training the abuser to continue their unacceptable behavior.  Over time, this can create a toxic atmosphere in your company.  How widespread is this issue anyway?  Consider the following statistics.*

  • 60 million Americans are affected by abusive conduct in the workplace
  • 61% of Americans are aware of abusive conduct that takes place in the workplace
  • Up to 81% of employers are perceived as doing nothing, and resist taking action when targets of abusive conduct fill out a survey
  • 71% of employer reactions are harmful to the workplace targets of abusive behavior
  • 29% of employees who are targets of abusive behavior remain silent about their experiences
  • To stop abusive behavior in the workplace, 65% of targets lose their original jobs

* Statistics from the June, 2017 National Survey On Workplace Bullying by WBI

So, what should you do when such behavior is exhibited, given that you are not willing to tolerate it?  Essentially, you have two choices.

  1. The easy path is to simply fire the employee.  On the positive side, this sends a clear message to all employees that abusive behavior will not be tolerated.  On the negative side however, you lose a top performer without finding out if they could be rehabilitated.
  2. The more difficult path is to document the abusive behavior, coach the employee, and put in place a corrective action plan for them.  If that does not work, proceed to termination.

If option #2 is chosen, it is important to immediately react to the negative behavior by sitting down with the employee and take the following steps.

  1. Describe the offending behavior to the employee by describing their specific actions.
  2. Explain to the employee the impact their behavior has on other employees as well as customers
  3. Let the employee know what behavior(s) you will not put up with in the future.  Also, let them know exactly what will happen if they exhibit such behavior in the future, up to and including termination
  4. If such behavior occurs again, you must act – and quickly.  You must also be prepared to terminate the employee if necessary

If you have an employee handbook, you should include a discussion about abusive workplace behavior, and consequences for same.  Know however that actions speak louder than words, and as the employer, you must be prepared to act on the words you have committed to.

Source: thebalancecareers; How to Deal with a Bully at Work


Succession Planning – For the Mid-Level Manager

Do you have a succession plan for your firm?  If the research is true, probably not.  According to a recent study,* two thirds of public and private companies say they don’t have a formal CEO succession plan in place.  Do you need one?  A lot of people don’t think so.  According to an online Harris poll, 47% of respondents don’t believe a succession plan is necessary.  And they would be correct – as long as they don’t care about the future viability of their organization.  Given those statistics, the odds are slim that organizations have any kind of plan in place for the succession of key positions beyond those of the CEO.  How would you replace your service manager, sales manager, product manager, marketing manager etc. if they left tomorrow?  Most organizations would struggle and their business operations would suffer, at least for a while.  It doesn’t have to be that way.

Succession planning doesn’t need to be complicated…it just needs to be done!

According to research cited by Ultimate Software, there are real, measurable differences in the performance between organizations that have comprehensive succession planning with those that don’t.  Comprehensive succession planning goes beyond the chief executive officer or the chief financial officer.  Comprehensive succession planning extends to all key positions within the organization.  “This takes time,” you say.  “The hassle factor and time that this would take more than offset the benefits,” you add.  Consider what this research found.

  • More than 90% of 18-34-year-olds say a clear succession plan would boost their level of engagement
  • 94% of employers report that having a succession plan positively impacts the entire workforce
  • 32% of people say they would quit if there was no room to learn, grow or advance at their job

Furthermore, this research shows that preparing high potential and high-performing employees for progression in the organization by investing in their development, will demonstrate your commitment to them.  Even if you disregard the research, you intuitively know that employees are more likely to stay with an organization that believes and invests in their future.  So, why don’t more organizations do this?  Perhaps they don’t know where to begin.  The thing is however, it doesn’t have to be complicated.  A simple approach might be accomplished with the following steps.

1.  Identify the key positions in the organization that you want to succession plan for.  Work with the individuals currently in these positions to identify the key strengths and behavioral traits necessary to be successful in these positions.

2.  Identify the training, personality traits and on-the-job experiences that will be needed to successfully groom an individual to move into each of these key positions.

3.  Identify individuals in the organization who have the potential to move up based on their current job performance and personality traits.

4.  Working with the high potential individuals, invest in training previously identified to help them prepare for future responsibilities.  In addition, expose them to on-the-job experiences that can help them use this training in real life situations.

There is specialized software that can help you with this task.  For example, a software program by the name of UltiPro Succession Management by Ultimate Software was designed specifically for this purpose.  For more information on the research as well as the software cited in this study, see the link below.  How expensive is software like this?  Online research shows that services from similar companies usually cost around $5-$10/employee/month for basic services, while more extensive applications cost $20-$40/employee/month.  No matter how you do it, you owe it to yourself to invest in some type of succession planning for your organization’s future.

https://www.ultimatesoftware.com


The Case for Disability Insurance

How Prepared Are You?

A major disability is something that happens to someone else… until it doesn’t!  The sad fact is most Americans are better prepared to die than they are to deal with disabilities.  If you are in your twenties, the chances are you rarely think about this.  But you should.  Just over one in 4 of today’s 20-year-oldswill become disabled before they retire.In fact, over 37 million Americans or about 12% of the total population are classified as disabledMore than 50% of those disabled Americans are between the ages of18-64.  At the end of 2012, 8.8 million wage earners representing more than 5% of the entire workforce were receiving Social Security disability insurance, (SSDI) 2.5 million of these were in their twenties, thirties or forties.  But I’m careful, I eat healthy and work out you say. As it turns out, accidents are NOT usually the culprit.  Statistically, about 90% of disabilities are caused by illness.  Cancer, heart disease and other illnesses cause the majority of long-term absences.  Consider the following statistic for a35-year-old male. 

Anon-smoking male, 5’10”, 170 pounds, who works an office job with some outdoor physical responsibilities and who leads a healthy lifestyle has the following risks:

  • A 21% chance of becoming disabled for 3 months or longer during his working career
    • Of these, 38% run the chance that the disability will last 5 years or longer
    • the average disability length for this person is 82 months

Similarly, a35-year-old female weighing 125 pounds has a 24% chance of becoming disabled for 3 months or more during her working career. As you can see, the chances are simply too great to ignore for the average working person.  Furthermore,most people think that Workers Comp or Social Security Disability insurance will cover their needs if they become disabled. According to the Council for Disability Awareness, less than 5% of disabling accidents and illnesses are work-related.  The other 95% are not, meaning Workers Compensation does not cover them.  In addition, according to the Social Security Administration, 65% of initial SSDI claim applications were denied in 2012. The average SSDI monthly benefit payment for males was $1256 and for females was $993, with 93% of all recipients receiving less than $2000 per month.

Given these numbers, how well prepared are American workers for disability?  Not very. Forty-eight percent of US families do not save any of their annual income, and one third of working families have no retirement savings.  Consider the following chilling statistics.

  • 68% of adult Americans have no savings ear marked for emergencies
  • 65% of working Americans say they could not cover normal living expenses even for one year if their employment income was lost.
  • 38% could not pay their bills for more than 3months.

 So what does the average family do when confronted with a disability?  They begin running up expenses on their credit cards, get a 2nd mortgage, cash in their 401(k) or take out a home equity line of credit and ask family and friends for assistance through sites like go fund me.  As you might guess from the above numbers however, these solutions are inadequate.  According to a Harvard study, 62% of all personal bankruptcies and over 50% of mortgage foreclosures are a consequence of disability, and many end up on Medicaid for insurance.  Keep in mind that while Medicaid rules vary from state to state, the general requirements for income are less than $931 per month and countable assets of $2000 per person, not including your primary residence (with limitations based on your home equity), personal property and household belongings and up to one motor vehicle.  ($3000 per couple living in the same household)

What is the answer then?  Disability insurance!  How common is it?  Consider:

  • 65-70 % of workers in the private sector have no long-term disability insurance
  • That equates to about 75-80 million private-sector workers who are without long-term disability income insurance
  • Worse yet, only 46% of workers have even discussed disability planning
These costs are immediate, expensive and often not covered by insurance!

Sources

disabilitycan happen.org

AmericanJournal of Medicine

US SocialSecurity Administration

Counsel forDisability Awareness

US FederalReserve Board

AmericanPayroll Association

Get Sick, Get out: The Medical Causes of Home Mortgage Foreclosures


Culture Warriors

Your Company’s Culture Starts from This Perspective

Your Company’s Culture Starts from This Perspective

There are a few intangibles within a company that make a difference as much as culture.  Every organization has one, and everyone knows what it is.  They may not know why it is, but they definitely know what it is.  Typically, culture can be categorized into three types, broadly speaking.  The first is a culture I will call blah.  It is neither invigorating or toxic, but it is definitely not exciting.  Employees might describe such an organization as neither great or terrible to work in.  There may be a good deal of competence throughout the organization, but few go the extra mile.  Leaders in the organization might be described as “ just okay.”  It’s a paycheck.  A person gets up in the morning and goes to work here because “that’s what you do.”  Likewise, with few exceptions, customers don’t have much to say about the organization, either good or bad.  They needed to have their air conditioner repaired, their plumbing problem fixed or their pool pump replaced, and that’s what they get.  Turn the page.

 

A toxic organization however, now that will get people talking.  Perhaps there is a culture where initiative and risk-taking is strictly the domain of management.  Perhaps the only management feedback occurs when an employee does something wrong, and management by fear is the prevalent characteristic.  Perhaps the culture is one where backbiting and CYA behavior are rampant.  Employees in such organizations love to share their common disdain of company practices with each other.  Like the blah organization, there may be a good deal of competence within the firm, but that is not what the average customer takes away from the average experience with such a company.  They may perceive a high level of bureaucracy, one where no one can make a decision except “the boss.”  While the service call might have been handled correctly from a technical aspect, a customer nevertheless walks away from the experience thinking the company is just not very friendly or customer oriented.

 

Then there is the company where the culture is electric.  There may only be the same level of competence as in the other two organizations, but something is clearly different.  Employees actually like to go to work everyday for this company.  Instead of simply complaining about what they don’t like or about policies that aren’t working, employees are actually encouraged to participate in making positive changes.  Customers see it too.  While they may not have seen the condenser fan motor that was replaced, the drain that was cleared or the DE pool filter that was changed, they see something even more important.  Perhaps it takes the form of a condensing unit that was cleaned and waxed, faucet aerators that were cleaned or skimmer baskets that were emptied.  What they are seeing are employees who care about the work they do and the customer for whom it was done.

 

What makes the difference in determining your company’s culture?  Leadership, plain and simple.  Employees take their cues from the top of the organization, and mirror that behavior in their own.  What can leaders do to foster a positive culture?  Generally speaking, it comes down to some very basic things.  First and foremost, behave the way you want your employees to behave.  You set the example for others to follow.  Second, define the mission and values of your organization in writing, and make sure everyone knows what they are – employees and customers alike.  It is critically important that these values be communicated regularly.  It is also extremely important to make sure communication is open, honest and available.  Make sure your employees feel comfortable in approaching you with problems and ideas, and make sure you are available to spend time talking with them about their concerns.  Finally, hire for character and train for competence.  Like a sports team that drafts for athleticism over position specific experience, make sure the people you hire in your company are the people customers want in their homes.  They will reward you with referrals and continued business.


Are You Being Shortsighted In Your Search for Talent?

Females make up 1.4% of the industry.

Females make up 1.4% of the industry. What is your company’s percentage?

By virtually all accounts, 2018 will be recorded as a good year for the HVAC industry.  You are undoubtedly seeing that in your business as well.  This growth is likely taxing your human resources, and in fact that is the case across the industry.  According to a recent ACH&R news survey, 75% of firms replying planned to hire personnel in 2018.  According to the US Bureau of Labor Statistics, jobs in the HVAC industry are expected to grow by 15% from 2016 to 2026.  At the same time that demand is increasing, many within the current workforce – people who are highly skilled – will be retiring during that time frame.  Yet another study conducted by Deloitte and the Manufacturing Institute predicts all this could result in 2 million unfulfilled jobs. It’s not hard to see that a train wreck is coming.

 

There is no silver bullet for this dilemma, the solution requires a multi-pronged effort across a number of areas.  In order to attract workers to your business, your business must be attractive.  Your wages need to be competitive and your company must be up to date with regard to technology, marketing and business practices.  You need to have apprenticeships and internships available for prospective employees.  Your firm should be talking with local technical and high schools to tell the story of your industry and your business, showing a clear picture of why both represent a clear alternative to the “college for all” mantra that students most often hear.  These students clearly do not have an up to date image in their mind when it comes to considering the HVAC industry as a vocation.  You can help by demonstrating your role in the development of smart homes and buildings, cloud-based monitoring and controls, and much more.  By itself, this does not represent a solution to the problem, only the beginnings of a solution.  What else is missing?

 

If you were asked to describe a great employee, you would probably describe a youthful looking, smartly dressed service technician – who is male.  What’s missing is the other 50% of the population – females!  At present, only 1.4% of the HVAC industry is comprised of females.  Clearly there is an opportunity here.  This opportunity extends far beyond the technical and high school students discussed in the paragraph above.  Don’t forget about college students, especially female students majoring in STEM disciplines. STEM stands for science, technology, engineering and math.  All too often, these types of students are thought to only be candidates for manufacturers, but that does not have to be the case.  There is no reason that women can’t enjoy a career within the contracting side of the industry, but like anyone else they must see that there is a future there.  If you are not creating that path within your firm and demonstrating it in all you do, it’s time to reconsider.  The myopic opinion of others when it comes to recruiting females into your business can very well be your competitive advantage!


The Pete Rose Principle

The Pete Rose PrincipleFor those of you who do not know who Pete Rose is or who never saw him play, I am only sorry that you did not get a chance to watch this icon of American baseball in action.  Unfortunately, today he is best known for the accusations of gambling that led major league baseball to ban him from the sport in 1989.  Regardless however, when you watched Pete Rose play baseball, you knew you were watching someone who truly enjoyed the game.  If Rose drew a walk at the plate, he didn’t saunter to first – he ran.  His aggressive baserunning style included distinctive headfirst slides.  He played in the major leagues for 23 years, amassing 4256 hits, still a record in MLB.  His lifetime batting average was .303.  All this earned Pete Rose the nickname, “Charlie Hustle.”

 

That’s interesting, you say, but what does that have to do with anything?  It is relevant because The Pete Rose Principle is one we can learn from and apply to our work life, regardless of what that work is.  Success does not always go to the smartest, the most highly pedigreed, or the most polished.  History is full of such examples.  People like Harry Truman, Ulysses S Grant, Steve Jobs, Vincent van Gogh, the list is virtually endless.  Like Pete Rose, these individuals had flaws.  However, they also had an overarching passion for achievement, rising to the top of their chosen field of endeavor.

 

What are some of the lessons we can take away from these individuals to benefit our own lives?  I believe the following five items are key elements of The Pete Rose Principle.

  1. Lifelong learning. So, you graduated from technical school, college etc., now what?  That’s not the end of your learning, that’s just the beginning.  Technology is revolutionizing the world we live in, and that is certainly true of the HVAC industry.  Embrace the concept of continuous learning, lifelong  This will keep you moving along in your career when others have stalled, because they did not embrace this concept.
  2. Passion for what you’re doing ~loving it. During a game in the 1970s, Pete Rose was running in to the dugout at the end of an inning.  Astroturf was a new phenomena in baseball, and Pete was practicing his skill at dribbling a baseball all the way in to the infield.  Passion is something you feel, and something others can see.
  3. Willingness to work hard. This is one of the major traits that tends to cull the herd over time.  People who are willing to work hard go further than people who are not.  You cannot force people to work harder, and you can only incentivize them to do so for a short period of time.  Ultimately, people either want to work hard or they don’t, and it can be a main differentiator for success.
  4. Flexibility and adaptability. We live in a global society, and the pace of change is accelerating at an increasing rate.  What worked yesterday won’t necessarily work today.  Hierarchical organizational structures are giving way to collaborative work teams.  If you are not flexible and willing to adapt to change, you will most certainly be left behind.
  5. Persistence – don’t quit. “Colonel” Sanders submitted his fried chicken recipe to 1009 restaurants before finding a buyer.  Henry Ford was bankrupted, and left penniless five times before founding the Ford Motor Company.  Thomas Edison discovered over 1000 ways he could not build a lightbulb, before he found success.  After high school, Steven Spielberg was rejected from the University of Southern California’s School of Theater, Film and Television – not once, but three times!  After attending another university, he dropped out and pursued directing without a degree.  Persistence is an attitude, one that is born out of the first four characteristics listed above.

 

Your career may never land you in the Hall of Fame, but the Pete Rose Principle embodies traits that bode well for individuals throughout a lifetime.


What Do You Do When Someone Doesn’t Do

A manager who fails to address sub-par performance becomes the problem, not the employee

What is a manager or business owner to do when someone on your payroll is not doing their job?  Of all the aspects of a managers job, this can be one of the most difficult to handle.

 

If the individual is in a performance base role such as a service technician or salesperson, the issue of underperformance will surface fairly quickly.  In the case of a salesperson for example, it could show up as revenue which doesn’t meet plan, a closing ratio that is lower than it should be, underperforming on accessory sales such as smart thermostat/humidifier/air cleaners etc.  For a service technician it could be running fewer service calls than the average for other techs, excessive callback rates, underperforming on ancillary sales such as smart thermostats, duct cleaning, high-efficiency filtration, etc.  For office staff, it may take a little longer to identify underperformance, because their jobs are not as quantifiable.  In either case, the underlying causes – as well as ultimate solutions – are essentially the same.  Regular performance reviews based on empirical measurements are key to properly correcting underperformance issues in the workplace.  Casual and intermittent observation coupled with managerial opinion is not an acceptable substitute for a properly designed and executed performance evaluation system.

 

The first step with an underperforming employee is to figure out why they are underperforming.  That involves sitting down with the employee, and having a conversation about the performance, letting them know it is sub-par.  The manager needs to ask the employee for their assessment of why performance is sub-par, and what they think is needed to improve it.  For many managers, this is the toughest thing to do.  They do not want to confront an employee, and they may even feel inadequate about having a performance related discussion with the employee.  If a manager shirks their duty in this regard, then they become the problem, not the employee.  For the basis of this column, assume that is not the problem.  If the manager determines that the employee need training, it should be scheduled as soon as is reasonably possible.  Following the training, post training measurements should improve.  If not, training may not have been the main problem all along.  The manager may determine through observation as well as conversation with their employee that the individual whose performance is not meeting the mark is in the wrong job, either because of skill, temperament or other form of suitability.  The manager should determine if there is another job which the employee is better suited for.  Before making the change in responsibilities however, the manager needs to make sure the employee is able and willing to do what it takes to be successful in the new job.  It is critical to understand causality for underperformance by an employee.  If an employee is not motivated in their present job, you won’t see an improvement in their performance until you get at the underlying reasons as to why.  The same is true if they are not happy in their job.  Remember the character Hermey the elf in the show, Rudolph the Red Nose Reindeer?  He was not happy in his work at Santa’s workshop, so he ran off to be a dentist.  As a manager, you may have to help the Hermey’s in your business become happy in their work, whether that is in your firm – or somewhere else.

 

You may have an employee who is underperforming, yet is an individual who has excellent formal education and can articulately explain reasons for their underperformance.  Red flags should go up if their reasoning is explained in terms of someone else’s or the system’s fault.  They may have let it be known that they do not like, or do not have confidence in their manager.  These type of employees may be the toughest of all to deal with when it comes to underperformance related discussions.  As their manager, you must not back away from your responsibility, even if you lack self-confidence in having that discussion or it makes you unpopular.  You may have an employee who just doesn’t want to do the job, even though they are clearly capable.  Irrespective of the reasons why, you ultimately have to terminate an underperforming employee, so they can go elsewhere and find a place where they will be happy in their work.


Bad Mouthing the Competition

Should you ever badmouth your competitor?  Of course, everyone says no, and this is backed by virtually all of the business research on the subject.  Okay then, done deal.  Wait, not so fast.  It’s not that easy.  Anyone who has been in sales for any length of time will tell you that there is always a particular competitor or two that just gets under their skin.  Perhaps that competitor is cheaper, perhaps they are larger and seem to have so many more advantages, and perhaps they even badmouth you.  So, how should you handle these situations and what disciplines do you need to bring to the task?

 

Bad Mouthing the Competition

 

First, the disciplines.  Bad mouthing the competition arises from frustration, an emotion that, while understandable, is under your control.  You have to decide who is going to be the adult in the room.  If you decide that you are only going to talk about your competition in a professional manner, you have to communicate that to everyone of your sales people, service people, office staff… in essence, everyone in your company who talks to the public.  Now for the hard part.  You have to demonstrate that in your behavior every single day.  As we said above, it’s not that easy, but you can establish a culture to this effect as long as you demonstrate leadership, fortitude and persistence – even in the face of potentially outrageous behavior by your competitor and their salespeople.  “That’s fine,” you say… perhaps a bit sarcastically.  So just how do you do this?

 

First, realize that this consumer has contacted you because they have a problem that is, as of yet, unresolved in their mind.  If they had full faith in the competitor that was bad mouthing you, they would have already made the purchase.  That sets the table for you to show the consumer how you have solved this/similar problems for other customers in the past.  Second, don’t merely be dismissive of your competitor.  If you are, you are being dismissive of this customer.…  which does not help to build trust in their mind with your organization.  In addition, you are losing a great opportunity to create an image of your competitor built in the likeness of your choosing.  Your company’s marketing people, with the involvement and approval of senior management, should put together and regularly update a narrative about each of your major competitors that helps potential customers better understand the differences in a way that clearly differentiates your company.  Anyone in your firm who touches the public in any way needs to be thoroughly familiar with these narratives.  What are the elements of this narrative?

  • When your customer tells you about your competition and/or about what they have said about you, first take a deep breath. Then, instead of responding directly, talk about your company on a philosophical level.  Tell the customer why your organization went into business and how you view customers in general.  For example, you could tell a customer that the owners of your firm were frustrated by what they saw as a lack of problem-solving/professionalism/whatever it might be in the geography served, and they went into business in order to understand every single customer’s needs so they could respond professionally and appropriately to those needs.  This is a critical step.  It is much more important for all your customers to understand what your organization stands for, rather than see how you will respond to a tit-for-tat bad mouthing game.  In a manner that is as honest as you understand it, explain how this contrasts with what you understand to be your competitors focus.  For example, your philosophy might be to first understand your customer’s situation in its entirety before you begin to apply solutions.  That would include understanding the health of their duct system, the integrity of the building envelope, the operating effectiveness and efficiency of all mechanical equipment, the health of the indoor environment etc.  Explain how your philosophy is to keep a customer for life, working with them over time to make their home as efficient and comfortable as possible.  Your competitors focus for example, might be to respond to demand service calls, fix the customer’s immediate problem and move on.  There is nothing inherently wrong with either approach, but it sets the table for you to differentiate your firm.
  • Next, provide general examples of why your approach is superior. For example, talk about customers whom you first came into contact with because of a problem they were having, and how your relationship over the years has benefited this customer by solving problems the customer never knew they had, which led to a big improvement in their overall satisfaction.
  • Finally, pivot to this customer situation. Demonstrate not only how you can solve the immediate problem, (which is likely the only one your competitor talked about) but also show the customer some things they can do to improve their environment/efficiency etc. now as well as some things you can work with them on over time to mitigate future problems/improve their indoor environment/reduce their operating costs etc. down the road.  Done correctly, your customer likely won’t even be thinking about your competitor at this point.

 

In the end, all the consumer really wants is to have their problem solved at a price they can afford, (notice I did not say the cheapest price) by a company they feel they can trust.