I have been trying for the past week to obtain contacts and proposals for an aquaintence of mine who has a facility in another state and would like a Maintenace program for his HVAC Equipment. I have gone to both the Air Conditioning Contractors of America site and The Mechanical Service Contractors of Americas site and selected a number of contractors with in a 25 mile radius of this building.
5 Service companies were contacted after I reviewed their websites(several were eliminated because they did not have a web site). So far 2 have responded they only due residential service in the area this building is located(within 15 miles of their offices)-although their websites indicate they due large commercial service. One has not responded as of now. It seems terribly confusing that service companies advertise things they do not do/or want to do and as well they take so long to return a phone call.
Prompt service means, at a minimum returning a call and acknowledging the request. Not doing anything sounds like someone that has more work than they can handle. In the current market place that is hardly the case.
There are many service companies out there that wait for the phone to ring. This type of response above may be an indication of this type of firm. Slow service/slow response. Confusing but maybe not someone you want in you facility.
Thursday, August 19, 2010
Monday, August 16, 2010
Beware of the Low Price Leader
I heard a television commercial in our area from a competitor #2-"We are not the ____ dollar blue light special"
I thought it was pretty clever to go in the opposite direction from the king of local television advertising/Blue light Pricing(competitor #1)-by a company that the last time I heard from someone who used them said"They were not worth the blue light special" Now in being fair to the company 2 I have not run across much of their work other than that comment listed above but for competitor #1 I have seen lots of work by them-$1600 dollar thermocouple replacement, $458 dollar capacitor replacement, $3500 dollar condensing unit replacement quote when all that was wrong was a broken electrical connection-and on and on.
There are a lot of companies out there that believe that PRICE is the only way to sell. I differ from that in I believe that integrity, Fair Value, and Exceptional service are more desirable.
Beware of these low price leaders-Spring clean and check of your a/c for 29.99(YOU CAN NOT GET A TRUCK TO THE SITE AND DO THE WORK FOR THAT MONEY EVEN IF THE TECHNICIAN LIVES NEXT DOOR) or the 39.99 fall start up inspection-again as above.
Realistically-79 to 89 dollars is what the reputable firms are asking for these above services. A company needs to make at least a 10% net profit to stay in business. That means that each of these calls is 8-9 dollars profit if there is nothing that needs done on your equipment, not alot of money to keep your doors open. However, firms that are charging in this range see every action an employee performs as a need to make money-not sucker them in with a really low offer then BANG!-You have a problem and it will be the cost of your entire months pay to fix it.
Remember what Grandpa used to say"IF it seems to good to be true there has to be a catch somewhere!" and this catch involves your wallet.
This type of approach to service lends itself to a company that may commission/incentivize their employees which can cause them to mislead/lie to the homeowner/business owner. Generally leading to work being performed that is unnecessary and Expensive.
Make sure to ask questions of the company coming to your home. Look in my two previous blogs for information on questioning.
I thought it was pretty clever to go in the opposite direction from the king of local television advertising/Blue light Pricing(competitor #1)-by a company that the last time I heard from someone who used them said"They were not worth the blue light special" Now in being fair to the company 2 I have not run across much of their work other than that comment listed above but for competitor #1 I have seen lots of work by them-$1600 dollar thermocouple replacement, $458 dollar capacitor replacement, $3500 dollar condensing unit replacement quote when all that was wrong was a broken electrical connection-and on and on.
There are a lot of companies out there that believe that PRICE is the only way to sell. I differ from that in I believe that integrity, Fair Value, and Exceptional service are more desirable.
Beware of these low price leaders-Spring clean and check of your a/c for 29.99(YOU CAN NOT GET A TRUCK TO THE SITE AND DO THE WORK FOR THAT MONEY EVEN IF THE TECHNICIAN LIVES NEXT DOOR) or the 39.99 fall start up inspection-again as above.
Realistically-79 to 89 dollars is what the reputable firms are asking for these above services. A company needs to make at least a 10% net profit to stay in business. That means that each of these calls is 8-9 dollars profit if there is nothing that needs done on your equipment, not alot of money to keep your doors open. However, firms that are charging in this range see every action an employee performs as a need to make money-not sucker them in with a really low offer then BANG!-You have a problem and it will be the cost of your entire months pay to fix it.
Remember what Grandpa used to say"IF it seems to good to be true there has to be a catch somewhere!" and this catch involves your wallet.
This type of approach to service lends itself to a company that may commission/incentivize their employees which can cause them to mislead/lie to the homeowner/business owner. Generally leading to work being performed that is unnecessary and Expensive.
Make sure to ask questions of the company coming to your home. Look in my two previous blogs for information on questioning.
Tuesday, August 10, 2010
Part 2-Choosing an HVACR Service Company
How do you compensate your technicians? This is an area that can lead to alot of discussion among Service companies. I believe you want to look for a company that pays their staff a livable hourly wage-this would be 20-35.00 dollars per hour plus benefits. I say this in that many companies incentivize their employees with bonuses and commissions to sell parts and equipment. This leads to often unscrupulous employees condeming equipment and parts that are not really bad.
There was one company in our area that as a condition of employment required their technicians to sell a set dollar volume of parts and equipment each month. If you did not meet your quota then the following month your benefits came from the hourly wage you were being paid.
As well, I came home one day to a frantic neighbor who had been quoted 3500 dollars for a new condensing unit. I offered to look at the equipment and found that all that was wrong was a broken wire on a capacitor-after stripping back the wire, installing a new terminal and reconnecting it to the capacitor the unit started and ran for an additional 2 years until they decided to upgrade. An approximately-15 minute repair which with the show up charge may have run 165 dollars vs. the obvously perpetuated attempt at meeting a quota or Baby needing new shoes.
Unfortunately, this is more often the case than company owners will admit. I do not believe in incentivizing your staff just for this reason. If you pay as you should, pursue all leads, and market there is no need to have your staff feel the need to lie to a valued client.
It is so bad at some companies that I have been in discussion with close friends who have relatives or friends who have left the industry-one because his boss told him over the phone to condemn a boiler by cracking a section on it-he even instructed him on how to do it.
How do you charge for your service call? This one that is tough to pin down. As a result of all the different options I will address this by itself in a later blog. Just be sure you understand completely how you will be invoiced!!
What brands do you represent? This is reasonably self explanitory. If they represent X brand they are more likely to have readily available parts on their service trucks for that brand. If you have y brand you may have to wait several hours or days for the repair to be accomplished. Now there are companies that carry alot of universal parts on their trucks so they can service many different brands. The choice is yours but I believe that the company that is independant of all manufacturers and installs multiple brands is your best call. They will generally be better equiped for anything they find.
There was one company in our area that as a condition of employment required their technicians to sell a set dollar volume of parts and equipment each month. If you did not meet your quota then the following month your benefits came from the hourly wage you were being paid.
As well, I came home one day to a frantic neighbor who had been quoted 3500 dollars for a new condensing unit. I offered to look at the equipment and found that all that was wrong was a broken wire on a capacitor-after stripping back the wire, installing a new terminal and reconnecting it to the capacitor the unit started and ran for an additional 2 years until they decided to upgrade. An approximately-15 minute repair which with the show up charge may have run 165 dollars vs. the obvously perpetuated attempt at meeting a quota or Baby needing new shoes.
Unfortunately, this is more often the case than company owners will admit. I do not believe in incentivizing your staff just for this reason. If you pay as you should, pursue all leads, and market there is no need to have your staff feel the need to lie to a valued client.
It is so bad at some companies that I have been in discussion with close friends who have relatives or friends who have left the industry-one because his boss told him over the phone to condemn a boiler by cracking a section on it-he even instructed him on how to do it.
How do you charge for your service call? This one that is tough to pin down. As a result of all the different options I will address this by itself in a later blog. Just be sure you understand completely how you will be invoiced!!
What brands do you represent? This is reasonably self explanitory. If they represent X brand they are more likely to have readily available parts on their service trucks for that brand. If you have y brand you may have to wait several hours or days for the repair to be accomplished. Now there are companies that carry alot of universal parts on their trucks so they can service many different brands. The choice is yours but I believe that the company that is independant of all manufacturers and installs multiple brands is your best call. They will generally be better equiped for anything they find.
Monday, August 9, 2010
Choosing an HVACR Service Company
What a tough subject. There have been alot of articles written on this and varying stands. I will look at this from the owners position with a Service Company insite.
At the beginning of any call to a service company you need to qualify their capability, so asking some background questions-How long has your company been in business? Can you provide me with 3 references that are not close friends or relatives?, Can I stop in and visit your office?, How many service technicians are on staff?, Part 2 will cover how are your technicians compensated? What brands do you represent? How do you charge for a typical service call?.
Each of these questions has a specific purpose. First by establishing the amount of time they have been in business allows you to gage the viability of them being around next year and the year after. I have seen many technicians, very accomplished technically, open a business with a sign on a truck and a couple of accounts from their previous employer come and go within several years of beginning. Many times these businesses do not understand overhead/Profit and will perform these jobs/services at less than true cost. Eventually this leads to someone getting stuck with used parts, an incomplete service call-having put 50% down at times, and no back up for warranty.(Some guys joke about this being a Tail Light Warranty-You have coverage only until you can no longer see their tail lights) While funny this is the case alot of times.
A newly established business in this industry generally begins with accounts taken from their previous employer, along with family and friends. When getting references make sure to call them. This will allow you to ask questions of these contacts-How do you know them?, How long have they been servicing your HVACR equipment?, Have you had previous work with "the business owner" at other companies?, How are they on warranty calls?, How do you feel about their technical competency?. It is very important that you follow up on references-I have provided many for our firm and in 20 plus years here only know of 3 that have followed up. I know many who have contacted us later and in speaking with them directly have regretted not getting more information before having chosen the company that performed their work.
Establishing if they have an office is important-that leads to the legitimacy of the business. If you can physically go to their place of business-even if it is small and out of the way it lets you know they take pride in themselves and their operation. There are many companies that go into business working out of their garage or a storage area and progress no further. They may tell you it is to keep their costs down but in reality it is because they do not understand overhead-If you have a home office you need to pay yourself rent, If you have a storage area you need to incorporate the costs into overhead. Many of these owners will invoice 55, 65 even 85 dollars an hour and yet when you ask them how much they are making they will tell you the same amount. There is no concept of overhead, taxes, etc. Which unfortunately leads them down the wrong path.
I had a conversation one night with a fellow who's business was in this same position. During our discussion he told me he was backlogged several years with installations-he was very proud of this. I asked him what he was charging per hour-$45.00. In pursueing this farther I asked him how many hours a week he worked-60 to 70 on average. I asked if he billed 45 an hour when he went to perform his bids-no he did not/this accounted for an additional 30 hours time a week. I asked who did his books and where was his office-His wife and at home, Do you pay your wife-no, how many hours is she working for you-About 40 a week-she answered the phone at home during the day along with watching their children, Do you pay yourself rent:-no.
By the end of our conversation it was established that he was actually earning about minimum wage for all his efforts. I do not know what became of him but I do know when we ended our conversation his final statement was that his rates were going up Monday morning. Now we also discussed taxes, vacation(he did not take any), materials mark ups etc., all things he was not aware of/or had not considered.
Last for this Blog is how many technicians do you have? This allows you to establish the level of service they will be able to provide on the 95 plus or below 0 days. Everyone can get to you quickly in April or September-but that first 95 degree day or that first 0 degree day is when you establish who is really geared to service and who is not. There are alot of companies that believe in service agreements-I am a strong believer in them. On most times that the weather turns hot or cold-I rarely get calls from agreement investors I normally get swamped by people who have chosen to not have predictive prescribed maintenance. I limit my service agreements to be sure that all of them can be properly covered when and if they need emergency service. I have found that you are better served by a company with 5-10 technicians vs those with more. This is because to the staff you are a person not an account number. When companies get too large you lose the personal touch of the owner and in many cases it becomes about money not service.
See you tomorrow with Part 2.
At the beginning of any call to a service company you need to qualify their capability, so asking some background questions-How long has your company been in business? Can you provide me with 3 references that are not close friends or relatives?, Can I stop in and visit your office?, How many service technicians are on staff?, Part 2 will cover how are your technicians compensated? What brands do you represent? How do you charge for a typical service call?.
Each of these questions has a specific purpose. First by establishing the amount of time they have been in business allows you to gage the viability of them being around next year and the year after. I have seen many technicians, very accomplished technically, open a business with a sign on a truck and a couple of accounts from their previous employer come and go within several years of beginning. Many times these businesses do not understand overhead/Profit and will perform these jobs/services at less than true cost. Eventually this leads to someone getting stuck with used parts, an incomplete service call-having put 50% down at times, and no back up for warranty.(Some guys joke about this being a Tail Light Warranty-You have coverage only until you can no longer see their tail lights) While funny this is the case alot of times.
A newly established business in this industry generally begins with accounts taken from their previous employer, along with family and friends. When getting references make sure to call them. This will allow you to ask questions of these contacts-How do you know them?, How long have they been servicing your HVACR equipment?, Have you had previous work with "the business owner" at other companies?, How are they on warranty calls?, How do you feel about their technical competency?. It is very important that you follow up on references-I have provided many for our firm and in 20 plus years here only know of 3 that have followed up. I know many who have contacted us later and in speaking with them directly have regretted not getting more information before having chosen the company that performed their work.
Establishing if they have an office is important-that leads to the legitimacy of the business. If you can physically go to their place of business-even if it is small and out of the way it lets you know they take pride in themselves and their operation. There are many companies that go into business working out of their garage or a storage area and progress no further. They may tell you it is to keep their costs down but in reality it is because they do not understand overhead-If you have a home office you need to pay yourself rent, If you have a storage area you need to incorporate the costs into overhead. Many of these owners will invoice 55, 65 even 85 dollars an hour and yet when you ask them how much they are making they will tell you the same amount. There is no concept of overhead, taxes, etc. Which unfortunately leads them down the wrong path.
I had a conversation one night with a fellow who's business was in this same position. During our discussion he told me he was backlogged several years with installations-he was very proud of this. I asked him what he was charging per hour-$45.00. In pursueing this farther I asked him how many hours a week he worked-60 to 70 on average. I asked if he billed 45 an hour when he went to perform his bids-no he did not/this accounted for an additional 30 hours time a week. I asked who did his books and where was his office-His wife and at home, Do you pay your wife-no, how many hours is she working for you-About 40 a week-she answered the phone at home during the day along with watching their children, Do you pay yourself rent:-no.
By the end of our conversation it was established that he was actually earning about minimum wage for all his efforts. I do not know what became of him but I do know when we ended our conversation his final statement was that his rates were going up Monday morning. Now we also discussed taxes, vacation(he did not take any), materials mark ups etc., all things he was not aware of/or had not considered.
Last for this Blog is how many technicians do you have? This allows you to establish the level of service they will be able to provide on the 95 plus or below 0 days. Everyone can get to you quickly in April or September-but that first 95 degree day or that first 0 degree day is when you establish who is really geared to service and who is not. There are alot of companies that believe in service agreements-I am a strong believer in them. On most times that the weather turns hot or cold-I rarely get calls from agreement investors I normally get swamped by people who have chosen to not have predictive prescribed maintenance. I limit my service agreements to be sure that all of them can be properly covered when and if they need emergency service. I have found that you are better served by a company with 5-10 technicians vs those with more. This is because to the staff you are a person not an account number. When companies get too large you lose the personal touch of the owner and in many cases it becomes about money not service.
See you tomorrow with Part 2.
Friday, August 6, 2010
Just A Beginning
Wow, first time blogger, long time in coming. I will use this blog to communicate some things that home owners, building owners and managers should be aware of when it comes to installing, servicing, and maintaining Heating, Cooling, Ventilation, Refrigeration and Control Systems.
I will attempt to point out industry wide practices that are harmful to the consumer and benefit the installer or servicer.
I will provide ideas, questions and additional information that I hope can help you in these, many times, costly decisions/repairs.
I will also provide you some insight into what it takes to have a company in this quickly changing, highly competitive industry. Hoping that you to can be fair to the company performing your work. As a Business person profit is not a dirty word but gouging should never be tolerated.
I have been far from ideal in my career in this industry but I hope to enlighten you so you can make better decisions by being better informed.
The HVACR industry has been good to me. I hope to be good for you.
I will attempt to point out industry wide practices that are harmful to the consumer and benefit the installer or servicer.
I will provide ideas, questions and additional information that I hope can help you in these, many times, costly decisions/repairs.
I will also provide you some insight into what it takes to have a company in this quickly changing, highly competitive industry. Hoping that you to can be fair to the company performing your work. As a Business person profit is not a dirty word but gouging should never be tolerated.
I have been far from ideal in my career in this industry but I hope to enlighten you so you can make better decisions by being better informed.
The HVACR industry has been good to me. I hope to be good for you.
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