20 Questions with Lee Rosenberg, Chairman, Rosenberg Indoor Comfort

Originally published: 09.01.13 by Terry Tanker

HVACR Business Publisher Terry Tanker sat down with Lee J. Rosenberg, P.E, chairman of Rosenberg Indoor Comfort, San Antonio, TX. they talked about travel, Lee's HVAC career and the challenges of owning a family business.

1. I understand you like to travel. Do you have a favorite destination?
Over the years, my wife Betsy and I have been fortunate to travel around the world. I guess it’s our hobby. There have been many explorations, but I’d probably say Italy has been our favorite.

2. Do you have an interesting travel story?
Once I was on a flight from London to Johannesburg with the heavy metal band, Metallica. I didn’t even know who they were at the time — but we had a nice conversation.

3. How did you get your start in the HVAC business?
I worked for a local heating and air conditioning company where I was responsible for sales and engineering. When I joined the company in 1974, its annual revenue was about $1.25 million. When I left in 1985, we were slightly north of $9.0 million.

4. You left to start Metro-Tech. Can you tell me more about that company?
We started Metro-Tech Service Company in June of 1986. We offered residential and commercial new construction, replacement and service. We also did a considerable amount of home warranty service. The economy was tough and we struggled. Betsy, my wife, joined me in the business in 1988. We crawled out of a pretty deep hole and became quite profitable by the early 1990s.

5. What is your business mix, commercial versus residential?
Our current business mix is 60 percent commercial and 40 percent residential. We’re no longer in new construction. We have a nice mix of refrigeration service, which includes some very sophisticated and critical systems.

6. Can you tell me more about your NATE certification program and why you believe it’s important?
We were one of the very first companies to havea NATE-certified tech. Today, the majority of our field employees are NATE-certified. When a service technician achieves this certification, it boosts his confidence. The training we do is more of a test preparation class. Unfortunately,
many technicians can diagnose problems and fix them, but are poor at test taking. This is a challenge.

7. Can you tell me about the major brands you carry and why you selected those over others?
On the commercial side, we sell mostly Carrier, York and Lennox. Our residential business is primarily Lennox with a following of Bryant and Day and Night. We select equipment based on the best fit. It’s all about quality, the effectiveness of the territory manager, service to back up the product, pricing, availability and the relationship. We are the brand and our customers make their buying decision based on our expertise and recommendation.

8. Your website is attractive. Do you maintain itinternally?
Our standard site is programmed in-house.However, we also format one for customers who want to use the site on their mobile devices. We spend about 30 percent of our annual advertising budget on Addword advertising. This directs many new potential customers to our website. We also utilize the websites for employee recruitment, as well as customer surveys.

9. What other types of marketing do you do and what works best?
We spend about 30 percent of our budget on network television. In addition, we use direct mail and internet marketing to our customer base. And, of course, we use social media. The Google Addwords and our referral program get us the most business.

10. Can you give me an overview of your fleet and how you manage the vehicles?
Currently, we have nineteen in our fleet, including vans, pickups and autos. Our field vehicles are exclusively GM at present. We purchase all vehicles — usually two to three per year. We normally expect our vehicles to last about ten years or 150K to 175K miles.

11. Let’s turn to management responsibilities. What do you enjoy most?
I enjoy strategic planning, budgeting and financial tracking.

12. What do you enjoy least?
Nothing. I’ve got the ideal job in our business. I love what I do. But I do get quite frustrated with contractors who lack the business skills to be profitable.

13. What gets you excited about going into the office each day?
Tracking performance and enjoying the satisfaction of having a financially successful business. In addition, I enjoy watching our son, Michael, lead the organization.

14. Have you started a succession plan?
Yes. Michael will take over the business at some point. He currently manages our sales team, spearheads our marketing and advertising plans, hires our field and inside personnel, deals with customer relations, leads our weekly staff meetings, our sales meetings and meetings with field personnel and works with our computer systems.

15. What are the challenges of working with family?
We do challenge each other and we do not always agree, but we talk it out and usually make some compromises.

16. How have you overcome those challenges?
Communication, communication, communication.

17. What responsibilities do you still hold onto, but should probably delegate?
I am responsible for the financial side of the business, including insurance negotiations and monthly financial reporting and tracking. I am slowly delegating more and more of my responsibilities, but it’s difficult since it’s what I enjoy. I tend to be a perfectionist in this area.

18. What is your business philosophy?
Be honest, have integrity and professionalism. Hire the best people you can find and train them to do exceptional work at a fair price.

19. To what do you attribute the success of your businesses?
A number of factors. We’ve built a family business with good communication and without overlapping duties. Attracting and keeping great team members. Our two ACCA MIX Groups. Being conservative and profitable and knowing the numbers cold because it’s not how much you sell, it’s how much you make. And collecting money in a timely manner.

20. Do you have a good customer service story that has paid dividends?
Many years ago, I met a customer who needed a simple bathroom supply outlet installed. He was impressed with our company and asked if we provided commercial services. Since that time, we’ve done about a half a million dollars of business at his firm.

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