Would you like to triple your customer referrals? Increase your sales closure rate 10%? Cut your installation warranty cost 75%? Add 1% to your installation profits? Reduce the turnover rate of your installation technicians to less than 5%? Boost the pride and morale of your co-workers and your company’s reputation? We did it at Peachtree Heating and Air Conditioning.
In 1992 warranty costs at our company for replacement, IAQ, and accessories installation work were about 2.5% of installation revenue. Beginning in 1993, we implemented a comprehensive installation quality control process for our retrofit work and realized immediate and dramatic improvement in our retrofit installation warranty costs, as well as in all of the areas noted above. By the end of 1994, we had reduced our installation warranty cost to just over .5% of revenue and had added a full percentage point to the bottom-line profitability of our retrofit installation work.
How did we do it? With input from our most experienced senior installation technicians, we identified the problem areas and then formulated a comprehensive installation quality control process (“IQCP”). The IQCP included the following key elements:
Training and Testing: We conducted four two-hour installation-training classes with our installation technicians over a four-week period. We administered written tests at the end of each class. As we brought in new equipment or accessories, we conducted additional training to cover the new models.
Jobsite Quality Audits With Photographs: We designed a comprehensive Installation and Quality Control form (download this form at the end of this article) and purchased inexpensive Polaroid cameras for each installation team. As part of the training, we taught installation technicians to take pictures of the hvac equipment to be replaced prior to the start of the job and to take pictures of the newly installed equipment at the end of the job. After the job was completed and all work areas cleaned, the installation team then asked the customer to accompany them (customer’s option) while the installers went through the job and completed the 34-point Installation and Quality Control form. Upon satisfactory completion of the quality audit, the customer and the installation technicians signed and dated the completed form.
The technicians then gave the customer an Installation Satisfaction Survey form (download this form at the end of this article) to be completed and mailed at their convenience in the postage-paid envelope provided.
Recognition and Rewards: The installation team turned in the completed and signed Installation and Quality Control form as well as the before and after photographs following the completion of each installation job. An Installed Job Summary form (download this form at the end of this article), including the photos, was then completed and hung on a warehouse wall designated “Jobs Installed This Month” for everyone in the company to view. At the end of each month, all co-worker’s (excluding installation techs) were given a ballot and asked to view the jobs and vote for the job that most impressed them. The “Installed Job of the Month” award was presented to the winning installation team at our monthly communications meeting. The award was $200 cash per team, and the monthly winning jobs were entered into the “Installed Job of the Year” contest at yearend. The “Installed Job of the Year” was determined, again by popular vote, and the installation team was awarded $1,000.
Also, following the timely completion of installations, and completion of the Installation and Quality Control form and photos, and provided there were no customer complaints or “callbacks” to correct an installation problem for a 30-day period, the installation team would earn an installation quality bonus of 1% of the job price. These cash awards were presented at our monthly communications meeting as well. Our installation teams would average around $800,000 in replacement and accessory installations in a year (that’s in 2001 dollars by the way), so their bonuses for “zero defect” jobs would be in the neighborhood of $7,500 to $8,000 per team. The Senior Installation Technicians (“lead”) and the Installation Technician (“assistant”) on a given team split the quality bonuses 50/50.
Customer Referrals: We tracked the number of referrals we received from installation customers and found that referrals had tripled within two years after implementing IQCP. Our Comfort Specialists (salespeople) found that our IQCP, structured and utilized as a “sales closure tool,” enabled them to increase their sales closure rate by an average of 10%.
In summation, remember this winning formula:
WIN! (Customer) + WIN! (Co-Worker) = WIN! (Company)
• The customers get a great installation resulting in reliable and efficient comfort!
• The co-workers (installation Tech’s and comfort Specialists) get recognition and rewards!
• The company gets more customer referrals, sells more jobs, and adds a percentage point to their bottom-line profits!
Installation and Quality Control form
Installation Satisfaction Survey form
Installed Job Summary form
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.