Focus on Revenue All Year

As I write this column from my home near Atlanta, we continue to have record-high temperatures. We have seen triple-digit temperatures daily during this three-week-long "heat wave," and local weather forecasters (Those fortunate prognosticators who are well compensated for being wrong most of the time.) say no end is in sight.

Presently, local hvac contractors with any sort of reasonable market presence and/or customer base are "huntin' over a baited field," as we say down South. As I often have said, "100 degrees Fahrenheit makes marketing and sales geniuses of most hvac contractors."

Weather-driven sales certainly are a nice windfall when they happen. However, depending on temperature extremes to grow a viable hvac retail business simply doesn't work for the long haul. In order to grow and prosper, the business must generate sufficient valid sales leads on a year-round basis.

At Peachtree Heating and Air Conditioning, the retail business I operated in Atlanta from 1990 until 2002, we employed eight residential comfort consultants (salespeople). We carefully tracked and recorded the sources and results of each sales lead. Our service technicians generated about 80 percent of the leads while performing diagnostic and repair or maintenance calls on our service- agreement customer base of more than 18,500.

Here's a summary of the average annual sales leads and sales data we recorded for the six-year period of 1996 through 2001:

Notes

(1) Our 60 technicians averaged 1,150 (all category) service calls annually. We trained technicians to present information regarding the benefits of hvac equipment upgrades and accessories when appropriate for the customer. Consequently, around 15 percent of those service calls resulted in sales leads. We paid incentives to technicians when those leads became sales.

(2) About 10 percent of all sales leads and 20 percent of our service calls came from our phone-directory ads.

(3) About 5 percent of total sales leads.

(4) About 5 percent of total sales leads.

(5) 54 percent of all leads were for accessories and IAQ services (air cleaners, humidifiers, programmable thermostats, CO detectors, duct cleaning, etc.) We assigned these leads to inside sales personnel for follow-up. Forty-six percent of the leads were for replacement or add-on hvac equipment and were assigned to our comfort consultants.

From 1990 through 1995, we carefully experimented with various forms of marketing and advertising in order to determine the best use of our resources. Beginning in 1996 (as a result of the information we had gathered from 1990 through 1995), we spent about 50 percent of our advertising budget on direct-mail tune up postcards.

We targeted homes in our primary service area during the spring and early summer, and again in the fall and early winter. Our technicians converted about 75 percent of the tune-up calls to service-agreement customers. In addition to growing our important service-agreement customer base (the source of 80 percent of our sales leads), 15 percent of the tune-up calls we performed also resulted in technician- generated sales leads.

Growing a large and loyal service-agreement customer base while constantly training and rewarding your technicians for "informing and educating" customers regarding solutions for their hvac and IAQ concerns is the surest and most cost-effective way to grow your retail business. It is also by far the most efficient and effective method I have found for producing sales leads during mild weather and/or a poor economy. 

Jackie Rainwater is a 46-year veteran and former owner of Peachtree Heating and Air-Conditioning in Atlanta. He built his businesses on service agreements.