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5 Essentials of a Highly Profitable Commercial Service Department

Originally published: 07.01.11 by James Graening


You must build a solid foundation before gaining more sales.

Are you having difficulty growing your commercial/industrial or light commercial service business? Would performing more light commercial or commercial/industrial service work improve your profitability? If so, where do you start?

Perhaps you are missing a few crucial pieces of the puzzle. In this and future articles, I will present proven strategies and tactics that could help you to immediately gain more commercial/light commercial HVACR service revenue. The opportunity is there for you to differentiate your business even during difficult economic times when facility-management teams and business owners are scrutinizing their budgets.

Building a Solid Infrastructure
A few things need to be in place before you can expect to sell and deliver commercial service successfully. In short, these “things” or actions include:

1. A culture that understands the importance of planning, marketing, sales, and systems. Many contractors I encounter desperately need to develop systems that support commercial service, most importantly, service agreements — and lack a willingness to invest the time and resources to them (maintenance contracts). 

Incorporating suggestions and ideas from the entire service team is critical. The Meridian Group and www.CompanyCulture.com state, “Because the company culture influences everything and

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everyone in it, a well-developed company, culture creates positive changes across the board. Managers who have developed their company culture report improvements in many areas, including: morale, productivity, profits, customer service, retention of employees and clients, recruiting and even costs.” 

A great culture is developed through involving or empowering employees to contribute to the plan, the marketing, the delivery mechanism, and — most importantly — the sale. Yes, this means more than just company meetings and a suggestion box; it’s daily management of the people resources for servant attitudes and customer-focused relationships. It means scheduling regular staff and management planning meetings.  

2. Systems and support for sales, delivery, and tracking. As improvement champion William Edwards Deming says, “I should estimate that in my experience, most troubles and most possibilities for improvement add up to proportions something like this: 94% belongs to the system (responsibility of management); 6% of special circumstance or the people (human error).” 

In order to set expectations and to reach sales objectives for selling commercial service agreements and then deliver on the correct maintenance tasking, we need proven systems and “checklists” or standard operating procedures, policies, and systems. Systems can survive and work correctly only through an organization and operations area that have job descriptions and understanding of the needed “hats” to be worn or functions that need to be performed. We begin by understanding and defining specific job functions and who is accountable for what. 

3. Organizational structure and operational model that embrace and encourage selling and delivery excellence. This will differentiate your contracting company. Yes, we’re talking about the correct organizational chart that defines roles and responsibilities, communications protocols, or as I’ve heard, “where the buck stops.” 

Who will make critical decisions? How will you delegate that authority? Will that person take on the responsibilities willingly?

The daily interactions of the business (the details of daily operations) are defined by the operational model, or the teams that work on critical processes, issues, and problem solving, as well as conflict resolution. Management becomes the “tie breaker” in the event a problem can’t be solved or a conflict can’t be resolved through the teams.

4. Recruiting, hiring, and training the right people: This is especially crucial for marketing and sales (revenue generation), combined with the best of compensation packages, rewards for performance, and comprehensive management. 

5. Integration and implementation of a proven B2B sales process and marketing approach: You need to supply the tools and collateral that speak directly to the pain, needs, and business objectives of the customer. 

Less than 20% of contracting businesses engage in this type of planning, forecasting, and execution. Even less, about 5%, will “take action” on the plans they develop and maintain a company culture that empowers employees. Is it any wonder that so many contracting businesses, as all businesses, fail or are not profitable and dissolve within five years?

Maybe it’s just a matter of growth or stability for you if you are in the top 20% of commercial/light commercial contracting companies. Or maybe you recognize the opportunities and desire to grow but just don’t know where to start.  Either way, you will want to consider the five foundational steps to growing commercial service.

James Graening is a sales trainer, coach, and consultant serving the HVACR industry. Educated at the University of Akron for business, Graening also has attended various HVACR industry schools and has a background in business management and sales, as well as being a published author. He was a top performer for Honeywell's Building and Controls division, and performed sales and management duties for a LINC mechanical contractor and two family-owned mechanical contractors in Ohio. He also was VP Service Sales and a corporate sales trainer for Comfort Systems USA; has served as Vice President of Commercial for Excellence Alliance; and was an educator and coach for Business Development Resources, working as a consultant to many contracting organizations.  He currently operates a training and education business, www.GrowHVAC.com, serving contractors in the U.S. and Canada. He can be reached at jgraening@knology.net or 850-867-2593.


Articles by James Graening

5 Essentials of a Highly Profitable Commercial Service Department

Before you can sell and deliver commercial service successfully, you must develop systems and “checklists” or standard operating procedures, policies, and systems.
View article.