All HVAC (Heating, Ventilating, and Air Conditioning) businesses have “profit ability”, that is the ability to make a profit. But the ones that make profits have solid profit strategies and practices, coupled with consistent focus on pricing performance.
Step # 1. Maximize Your Current Opportunity by Charging the Correct Price.
• Know all your HVAC costs.
• Have a profit plan.
• Know your break-even (bottom-line price).
• Build value in your offering (sales process).
Most HVAC companies leave money on the table by not having proper control or management of their pricing. Invest some time in the management of your pricing and your bottom-line will soar. Having set prices in place allows you to maximize revenue productivity and your “profit ability”, and even helps in deflecting pricing objections.
Step # 2. Maximize Revenue Productivity by Setting Benchmarks for Key Performance Indicators.
• Determine Key Benchmarks that drive business revenues (top & bottom-line).
• What gets measured gets accomplished.
• Expect 50% more from everyone (stretch plan).
• Provide necessary training and tools for profit success.
• Display benchmarks and performances.
• Reward for excellence.
Managing by benchmarks is a key component to your “profit ability”. Knowing your numbers, especially your profit targets, gives you a clear roadmap to follow and helps you to stay on course when your profit vision gets blurry.
Step # 3. Maximize Your Current Customer Relations.
• Follow-up after Sale.
• Send monthly offerings.
• Send a personal note to top 20% of customers.
• Provide referrals to your customers for other non-competing services (builds value in you as a resource).
• Send Thank-you notes.
• Remember special dates/events (B/day, Holiday, promotion, etc…).
The initial cost to attract and capture a customer takes a big chunk out of your profits, so keeping your customers is a huge step in your “profit ability” factor. Having a plan in place to keep your customers fresh and attracted to you allows you to re-coup your initial investment in that customer. Studies have shown that it costs up to six times more to capture a new customer than it is to keep a customer- make an investment into keeping your customers, your bottom-line will love it.
Step #4. Leverage Your Customer Base
• Harvest all of the possible opportunities from your existing customers.
• Build an opportunity database with that information and market from it.
• Extend your HVAC product / service line to up-sell and cross-sell.
• Customize your offerings so that you differentiate yourself from the competition.
• Get and use testimonials.
• Get customer feedback on everything.
Your “profit ability” skyrockets when you can create repeat sales to your existing customers. Several different studies have shown that the longer you extend the selling lifecycle of your customer base the greater the increase of your overall profits. Have a plan in place that creates irresistible offers to your customers so that you can sell to them over and over again.
Step #5. Make Your Whole HVAC Business a Salesforce.
• Provide incentives to everyone in your business to sell.
• Make your customers become part of your salesforce by providing Outrageous value and service that they “BUZZ” to everyone about you.
• Reward everyone for referrals.
• Make your suppliers a sales resource for you by referring their products and services to others.
• Make it fun to sell for you.
Imagine what would happen to your “profit ability” if you got everyone involved harvesting opportunities and then converting them into leads and sales. The burden of having a huge sales force can be lessened by turning non-revenue producers into revenue producers simply by creating a selling environment throughout your business. Making this happen will have a huge impact on your profits.
Step #6. Have a Plan to Attract the Correct and Best
• Employees (Rank Best to Worst).
• Customers (Best fit).
• Vendors (products).
• Partners (banker, lawyer, accountant, etc…).
• Opportunities (networking).
Don’t settle for second best, it costs you profits. Always look to improve the people and ideas you surround yourself with until you find the best possible fit for you and your “profit ability”. The people around you are the conduit to your success; they provide the power and energy that connects your success to profits.
Step #7. Make Your HVAC Business Agile
• Automate as much as possible
• Outsource what you can
• Keep overhead as low as possible without sacrificing quality and customer experience
• Don’t get it unless it is “YES” to this question; “Will it help me generate revenue and profits?”
• Cross-train employees
It is much easier to acquire costs than it is to shed costs. Make sure that you position your business to run lean and mean. Don’t overburden the “profit ability” of your business with unnecessary overhead. Picture a wagon-train; you want more horses in your business than wagons.
Step #8. Keep Changing and Growing
• Stay in touch with current HVAC market conditions and adapt to changing needs.
• Challenge assumptions from within your industry (Be a Leader).
• Experiment with new ideas, processes and products.
• Never stop asking questions.
• Never stop learning.
• Grow from mistakes.
Never assume when it comes to making a profit. Profit slippage easily occurs when you take your “profit ability” for granted, or you become lazy in learning, stubborn with change and happy with status quo. Profits are fleeting moments that will slip away if you loose focus and stop growing.
Step #9. Share Your Success
• Have a profit sharing plan.
• Say “Thank-you” and mean it.
• Give to your community.
• Have a balance in your life.
Don’t be greedy; give the people around you personal “profit ability” and watch your “profit ability” skyrocket.
Step #10. Always Deliver More Than You Promised
Keep all your promises.
• Always follow-up.
• Take care of problems.
Your words and actions can increase or decrease your “Profit Ability”!