Author: CJ Todd

It can be frustrating when your salespeople don’t reach established goals, especially during slow seasons where capitalizing on every opportunity is critical. How can home services business owners help underperforming salespeople imrpove?

On this Tip of the Month video highlight, EGIA’s faculty member Gary Elekes (Founder of EPC Training and iMarket Solutions) gives his expert advice on setting expectations, establishing a performance review process, and evaluating your sales process to help your people succeed.

On average, it takes 100 quality calls to generate one new commercial maintenance customer in the HVAC industry. Do the EGIA experts have any recommendations on working with a company that will call comercial customers on behalf of my company?

On this week’s Ask the Experts Live video highlight, EGIA’s faculty members Drew Cameron (President of Flow Odyssey) and Gary Elekes (Founder of EPC Training and iMarket Solutions) give their expert advice on how to generate more quality commercial maintenance leads by working with a third-party lead generation company, including what you should be paying and how to manage the process.

Unfiltered Live: Ask the Experts video sessions are recorded to help contractors navigate COVID-19-related challenges and provide actionable strategies that can improve any business at any time. To access the full archive of recordings, CLICK HERE.

Recruiting competent home services employees can be very challenging, especially if you’re only posting jobs on Facebook, Indeed, or ZipRecruiter. Is there a digital strategy that can be more effective at attracting top talent?

On this week’s Ask the Experts live video highlight, EGIA’s faculty members Drew Cameron (President of Flow Odyssey) and Gary Elekes (Founder of EPC Training and iMarket Solutions) discuss the effectiveness of website retargeting to get your message in front of competitors, trade schools, high schools, and trade show attendees to optimize your recruitment efforts.

Question: How often do you recommend having sales and service tech meetings during the busy and shoulder season?

Drew Cameron; EGIA faculty member and President of Flow Odyssey:

I think you certainly want to do daily huddles. It’s critical to have daily communications with your people and daily huddles will give you the opportunity to have a short, punchy conversation.

I think departmental meetings should happen, at the very least, once per week.

Weldon, I’ll throw it to you…

Question: What should I do when my team doesn’t hit the goals we’ve set and agreed upon?

Gary Elekes; EGIA faculty member and CEO of iMarket Solutions:

The first thing that I always do when my team isn’t hitting goals is to look in the mirror and assessing the goals. Did I set the goals correctly? Were they reasonable? Were they S.M.A.R.T.?

If I feel like they were, the next question is figuring out the reasons why my team isn’t achieving the goals. Start looking at the metrics. The numbers tell the story.

Are lead counts where they need to be? Are closing rates where they need to be? Are tech lead turnovers where they need to be? There are a series of metrics that will give me the information I need before I attack the problem.

I like the idea of identifying the problem – what is actually the problem? What’s creating the gap for this particular team?

Sometimes, it could be something that’s going on personally. Maybe you have great leads. Maybe you have great opportunities. All that is happening as it should and it’s just something going on in their personal lives.

Think about it in terms of a situational analysis – define the problem. Find out what’s really creating the issue.

If it’s a skills problem, you bring in experts and lead trainings to improve their skillsets.

If it’s emotional, talk to your people and figure it out.

If it’s technical – lead generation, quality of leads, few opportunities, etc. – then you might have to fix your marketing plan.

It could be a little bit of all those things. In my 30 years of consulting experience, I tend to find it’s not just one big glaring issue. It’s not one big clear problem that you can fix before it gets to be a huge issue. Problems usually stem from a little bit of a lot of different things.

You have to look at the metrics to uncover the problems, prioritize what needs to be worked on, and attack them one at a time.

Question: How much discounting do you consider now during the Coronavirus environment and/or shoulder season to drive up revenue instead of having a revenue valley to fill up later?

Weldon Long; EGIA faculty member and New York Times Bestselling Author:

Well you know it’s kind of funny and Drew and I had a very similar philosophy on this. I’ve heard him say it and I’ve said it a thousand times. Ideally, in a perfect world, when we’re offering specials, we’re being special. But listen, price discounts are a part of the game. People have an expectation for some negotiation on different things.

So, there’s only two things I take into consideration when I start talking about discounts.

Number one, is the discount built into your retail pricing – what I called retail pricing strategy. If I’ve got my pricing where I’m at a 50% gross margin – or whatever your target is – then we typically will add about 10%-12% on top of that for what I call my retail price. That is basically negotiating room, which we can use to offer additional discounts or throw in a free “this or that.”

That’s going to help if you get that one person that just has to have a $5 discount so they feel like they won the game with you.

When I sell air conditioners, I sell air conditioners the same way I sell boats and cars. I always ask more for them than I’m willing to take. If I’ve got a boat I’m selling on eBay and I need $20 grand for it, I’m probably going to ask $25 grand. If I’ve got a car, I’m going to ask a little bit more for it. Or even real estate, I’m going to ask a little bit more for it.

To me, that’s just kind of a natural part of the culture. People expect some give-and-take and some negotiation. So, that’s the first consideration. Is it built in?

The other thing is, where are you in relation to your gross margin?

I know a guy for example a client who had a 25% markup above a 50% gross margin. So, they would have 50% gross margin and then they would divide by 0.75 to mark it up another 25%. Then that was all negotiating room. That seemed like quite a bit to me but it works for them. It was all negotiating room.

So, whatever that number is his fine but the bottom line is, what is the gross margin when it’s all said and done? As long as your gross margin hits your target – whether that’s 45% of 47% – then you’re fine with discounts.

Now, if you have your goods and services priced at one price, like this is what we need to get, this is our 47% gross margin, then obviously every dollar you discount from that is going to cause problems for you.

It’s all part of a global strategy. You can’t look at it in a vacuum, like how much should I discount. It all depends on your pricing strategy, your marketing strategy, and your sales philosophy. It depends on how you’re set up and what you’ve built into your pricing.

Question: Does a minimum of 75% of the loan have to be used toward payroll to be to be eligible for forgiveness on the loan?

Gary Elekes; EGIA faculty member and iMarket Solutions Founder:

That’s the requirement. In fact, we went through this this morning in our own company. Our costs end up being, on the operating expense side that we would even consider, only about 10%. So yeah, you need to be using it for payroll.

What they’re not interested in is giving you money so that you can pay down another note that’s a higher interest rate and get a loan at a lower interest rate. It’s a stimulus, it’s an injection, it’s designed to keep people working and keep payroll flowing.

They’re not ignoring the idea that you might have a rent payment due on a building, so it helps the person collecting the rent for the building. So, you can use some of that but you have to use most of it for payroll, that’s the idea.

Weldon Long; EGIA faculty member and New York Times Bestselling Author:

Another recommendation I would make is based on one of the questions that was asked earlier by a company with hundred people. We’re paying all our people because I want to be able to qualify for the loan, I want to be qualified for the forgiveness if we decide we’re going to exercise that option, and that means I have to employ my people. Well my people aren’t all that busy right now.

So, we had one of our managers go on and do an interview on one of the local television stations and simply extend an offer that hey, we have a lot of people that are sheltering in place, elderly people, people who are immunodeficient, people that are high-risk. We’re all of the city all day in our trucks, if you need deliveries of medication, if you need deliveries of groceries or supplies or anything, call us up! We have vans all over the city, we’ll drop stuff off and put it on your doorstep.

The response to that has been absolutely mind-boggling! People really appreciated that. It was funny watching the interview. I didn’t do it, one of our managers did it, and the anchor was like, “What? You’re doing what?”

And people have been calling asking us to pick up groceries and medicine and all sorts of things. These are vulnerable people, and you may have people take advantage of you but I don’t give a rip about that! I’m more concerned about the people who just need to help.

There are lots of things that we can do to improve our presence, our brand, and the quality of our brand. If you’re going to employ your people anyway to be compensated or forgiven on these loans, let them get out there and do some community service.

Imagine 5 or 10 of your trucks parked up on the side of a highway cleaning up a one-mile section of the highway. You’re going to pay them anyway and the government is going to pay you back for that. Get them out there doing some public service. Do whatever you can. Get your trucks on the road. The media will cover that stuff, they’ll eat that stuff up. Do what you have to do to make an impression.

Question: In a price comparison to another company with no guarantees, how do you put a price value on all the guarantees we provide? We are at $20k they are at $16k, we guarantee everything, they only verbally promise.

Gary Elekes; EGIA faculty member and iMarket Solutions Founder:

We use what we call a “Consumer Specification.” We force the customer into a conversation about how much they actually value those types of things, like peace of mind. That’s in writing. Specification is actually a document we use as part of our presentation system.

A lot of comfort advisors will do this verbally. The $16k company you mentioned in the question probably isn’t as orderly in their presentation system.

We would generally have a printed specification and a comparison, so we have the ability to compare and contrast when that question comes up. We want that conversation to happen. That’s how we would classify that discussion.

In terms of value, it’s going to be highly dependent on the past experiences of the individual customer. If you’ve never had a flat tire and you’ve never had to call AAA, then AAA doesn’t have a whole lot of value to you because you haven’t had that experience. But if you have had a flat tire and AAA has taken care of you, then you probably have a better idea of what that experience is worth.

Some of that is going to be interdependent on the individual client and their customer experience. Again, we’re back to the fact that not every client is going to be right for a high-quality, high-end company.

One of the things we’ve done and taught in the past that creates a warm process – warm meaning that the clients have experienced some education – is a pre-call process. With permission from the client, we send out an email highlighting some information on the process so our clients can make the most informed decision possible.

We’ll include a document that is the specification for how we’re going to do business, which outlines the differences between our company and all the other companies in the marketplace. It shows what we do from a quality control perspective, as well as our guarantees and warranties.

We give them the questions to ask. We literally give them the 23 questions they should ask anyone they’re doing business with. They are very penetrating questions. Obviously, if I’m a $20k company and I’m a high-quality company, I can answer yes to all of those questions.

We already know that most of the companies won’t be able to answer all of those questions, so we’re not risking anything by doing that.

Question: What can we do to solve the labor shortage?

Drew Cameron; EGIA faculty member and HVAC Sellutions Founder:

This question comes up quite a bit. I can seem to pick up a trade publication without someone mentioning it. I did a really detailed presentation about this at the last EPIC Conference and I’m happy to share my slides with our listeners if they want to shoot me an email at dcameron@egia.org. I’ll give you an overview of some of the things we’ve talked about in that session.

Action item number one is to stop looking for unicorns. A unicorn is a person who already has the right skills and mindset, they came from another company and are already very successful. They probably have a high bill-by-hour efficiency, high customer service scores, and knows everything they need to know about the job. You’re just not going to find these people.

I think you have to bring people into this industry that have a mechanical aptitude and good communication skills and want something better for themselves. You will then build this individual through technical schools and the resources we have here at EGIA. There are technical classes around the country that you can leverage to find these people.

Look outside your geographical area, pay relocation expenses for the right people. Look to people retiring out of the military because you can get paid to hire and train them. Look to schools for troubled teens. Maybe they just need someone to take them under their wing. Look to people coming out of prison or parole.

You certainly need to start working with high school guidance counselors. You want to partner with the technical education programs in the high schools, provide a scholarship, and pay for a training or starter toolkit.

When they come out of high school, the ones that aren’t going on to college you can say hey, we’re going to pay for you to get training, we’ll pay your tuition, we’re going to pay you while you’re getting the training, and we’ll give you the tools you’ll need to start the job, and if you stay, you keep the tools. You have to look beyond acquiring talent from your competition.

You can also make sure local schools have the information that we just released for the EGIA Foundation scholarship program and have that on their website.

I’d say you should make a presentation at back-to-school night for juniors and seniors. If they have a career night, you should participate in that as well. Someone at the EPIC Conference talked about going to the school and doing a career night where they had a speed dating format. Kids could have a quick conversation with various people and this particular person showed up and represented the trades.

Action item number two is, you have to have a remarkable opportunity within your company. You have to have an amazing culture. You don’t want to just be the best contractor in town, you want to be the most desirable place of employment in town. A place that not only offers a great coworker experience but a great customer experience as well because you want your people to feel empowered to do an awesome job.

If they can be proud of the place that they work and the work that they do, that’s very rewarding and makes your company a little bit stickier than somebody else’s company. You want to have a great environment, a great facility, nice vehicles, world-class resources and benefit, and offer more value than anybody else.

Question: The objection of “Getting 3 Bids” is our biggest challenge to overcome. Customers still seem to be persistent about speaking with additional contractors no matter what we say. How can we overcome this challenge?

Weldon Long; EGIA Contractor University Faculty Member and NY Times Bestselling Author:

This is a question we deal with a lot, especially on marketed leads. In my experience, it’s a little bit less of an issue on tech turnover leads. I have a client that virtually has no marketed leads. They run thousands of tech turnover leads all year and rarely ever have to deal with the three bid objection.

For those of us that depend on marketed leads, it’s one of the biggest challenges we face. But you handle it the way you handle any objection – you have to deal with it proactively. you know that your homeowner is probably thinking about three bids if you’re there on a marketed lead, especially if it’s from one of these electronic digital lead sources – like Angie’s List – where you know it went to at least two other contractors.

So, overcoming the three bid objection is the same strategy we use for any objection, whether it be price, “I want to think about it,” or whatever it is, we have to deal with it proactively. I’d encourage everyone to take a look at the sales training as part of EGIA’s 10 Core Curriculum.

Specifically, there is a video training on the kitchen table sales process where we talk in detail about how to overcome the three bid objection because it’s obviously a common problem in the industry. And the key is, you have to have the conversation ahead of time.

If you go through the training, you’ll see that there’s a basic conversation to bring up the issue and illustrate the fact that getting three bids does not protect them. One of the central questions that we ask in that conversation is, “Have you ever known anybody who got three bids for a project on their home and still had a problem with the contractor?”

Most people have had that experience or know of somebody that has had that experience. Three bids doesn’t protect people. What protects people is a company that they can rely on – a company who will stand behind their services and their installations.

The key thing is not to wait until the homeowner brings it up. If it comes up at the very end of your sales presentation, then you’re in a situation where you can sound a little bit defensive, like you’re just thinking about it.

I like to deal with it head on, very early on in the sales presentation. I like to have an honest conversation about three bids. I call it the three bid myth because I think it’s a myth that permeates our industry both from the homeowner side and from the contractor side. Because if you think you’d probably want to get three bids, you’re probably not going to be very successful at dissuading them from getting three bids.

In most cases, they’ll say they’d choose your company, which gives you a little bit more ammunition to address the three bids objection if you run into it at the end of your sales presentation.