The first step to growing your company is not spending more money to make more money. Instead, you should identify the lost revenue you’re already generating.
Here are four ways to uncover this revenue and make this your most profitable year ever.
One of the reasons companies fail is because they’re not staffed accordingly — meaning they’re understaffed. When you’re understaffed, this causes many problems. You could be burning the call — too many calls and not enough technicians.
You end up sending technicians on too many calls a day, which will not only burn out the technicians, but will also make your customers feel rushed on their visit. And that visit will have less value.
Having too many calls also makes you send underperforming technicians to more calls when, in reality, they should have been sent home for the day. Being understaffed makes the business run you, instead of you running the business. When you have too much work, you’re not going to look for that low-hanging fruit. That’s easy revenue you could uncover.
Think about it like this: You’re a family with two children. When you go to sit down for dinner, and you’ve got enough food, your kids are 100 percent full, and you’ve got leftover food to throw out. Are you going to look for more food? No.
But imagine you sit down to dinner and the plates are only half full. Everyone finishes eating and they’re still hungry. If this were the case, would you look for more food? Of course you would.
One of the first things you need to do to grow your business is to be staffed correctly. Without staff, you’re not going to look for the low hanging fruit that’s ready to be picked. When you’re staffed accordingly, you can hit capacity.
Most companies, when not managed correctly, will hit about 60 percent capacity (each install crew doing three jobs a week on average).
To hit capacity, you should do five jobs per week per crew. This may sound like you’re going to have to spend more money, but if you learn how to price your jobs so your overhead is covered in the first three days, then the margin percentage of the next two day’s installs will go straight to the bottom line.
One of fastest ways to grow your revenue without spending more money is to master the call center. What a lot of contractors don’t understand is that the call center is not just for booking calls. It’s for booking the correct amount of certain types of calls.
Imagine you have a day with 30 calls on the schedule and all of them are for brand new HVACR equipment on which you’re running tune-ups. You have another day with 30 calls on the schedule, and half of them have equipment that is broken down. Which day do you think your company will do more revenue? Obviously, the second one.
It’s not only about the correct amount of calls, but also about booking the right mix of calls. You need to book a certain amount of tune-ups, demand calls and aged system calls.
Companies that master their call center can do as much revenue in the spring as in the summer by making sure they have the correct mix of calls. Doing this will give you a weather-enhanced business, rather than a weather-dependent business.
Your call center needs to be armed with the right questions to ask customers and scripts to follow up with existing customers to help them book not only the right amount, but again, the right mix of calls.
It’s a good idea to never have more than 33 percent of the calls on your schedule be HVACR equipment less than five years old. The same holds true for aged equipment. If you can, make sure at least 33 percent of your calls have HVACR equipment that is older than 10 years.
By simply doing this, you’ll streamline your revenue and help take out the ups and downs due to weather.
Your call center should be involved in the professional follow-up (PROFU) process, but so should your technicians. PROFU will help you grow your internal revenue by at least 5-8 percent. This includes training your staff on what should happen if a customer decides not to buy.
For example, if a technician goes to a call and the customer decides not to do business, the technician should then call, as part of the PROFU process, to help the customer get engaged in doing business with your company.
The point here is that in these cases, you’ve already run the call and spent the money on marketing, fuel, labor, etc., but you didn’t get their business. By teaching the PROFU process, your staff will engage with the customer and pick up lost revenue. PROFU can vary business to business, but the point is having a process in place.
Once you have the staff in place and call center prepped, it’s time to implement cross-trade lead generation, or cherry picking. This is a type of cross-marketing for multiple trades, and it can grow businesses 25 percent without spending an additional penny.
In one instance, a company that decreased their marketing and implemented this process actually increased revenue for their HVACR departments from $20,000 a month to $36,000 a week. That is a truly amazing result, gained by implementing a process.
The basic premise behind cross-trade lead generation is that you’ll capture all the low hanging fruit of the other trades, and you’ll be able to do this on a consistent basis because it’s just a process. Other types of cross-marketing can work, but in those scenarios you’re relying on the technician’s ability to do the heavy lifting instead of a process.
Cross-trade lead generation works differently. Here’s an example: Say you’re an HVACR company that also does plumbing. You have six plumbers and six HVACR technicians. When you tried to get plumbers to book calls for HVACR, it wasn’t all that successful. That’s because you were relying on the success of one technician in the field.
If each of those plumbers are running three calls a day, that’s 18 calls that you’re likely not to do HVACR business with, unless they have a service agreement with you.
With cross-trade lead generation, you do this instead: When your plumber closes out on a call with dispatch, they will make a note about the age of the customer’s HVACR unit. If there’s opportunity there, the customer’s name is recorded as a cross-trade lead, and goes into a “cherry pick book.”
Now you have a book of customers who have a potential need of new HVACR systems. At a company that runs 18 plumbing calls a day, the HVACR cherry pick book will grow with about six insertions a day.
In the middle of summer — when your HVACR technicians have all they need to “eat” — this book from your plumbers will grow. At the end of summer, you’ll have a book of hundreds of names and your call center will follow up to book the calls.
When the weather isn’t cooperating, pick up the cherry pick book and you’ll be able to consistently control your business. By doing this correctly, the call center will now control the types of calls.
If you don’t have multiple trades to work off with for this process, cherry picking is the easiest way to start another trade service line.
If you implement all of the above things, you’ll be a weather-enhanced company, instead of a weather driven company.
You may be getting more calls than usual — that’s normal for a busy season. It happens every year. But that doesn’t mean you have to run them all.
Identify the lost revenue you’re already generating and you can grow your business without spending any more money.
