Selling HVAC Equipment in A Post -Millennium
Originally published: 03.01.14 by Jaime DiDomenico
Throughout the last decade, as the HVAC residential service and replacement business has grown, contractors have tried to find their way in the highly competitive world of marketing and branding. Some joined great organizations, such as ACCA, Nexstar, or Service Roundtable. Many did not. Those that did not, and “winged it,” might still be scratching their heads after 5 years of tweaking their business to adapt to the changing HVAC replacement market. It’s important to remember that sales and marketing go hand-in-hand. Many contractors focus on getting their phones to ring, only to lose the leads later. For this reason, this article first focuses on the keys to successfully converting leads into contracts, and then to making the phone ring.
4 KEYS TO GROWING SALES IN THE HVAC REPLACEMENT MARKET
1. Create a selling culture
Be proactive and foster an environment in which goal setting, rewarding, and celebrating is a daily, weekly, and monthly activity. One way to create a selling culture is by posting goal boards in the sales and installation area of your company. These boards do not have to be in dollars; they could be in number of budgeted leads, number of sales, and growth vs. plan and/or prior year. Use the power of communication to get your entire team involved in the success of your replacement department. Alternatively, you
2. Hire the right people –
Screen your salespeople carefully! We use the D.I.S.C. test (www.discprofile.com) to measure personality traits, such as dominance (D), influence (I), steadiness (S), and conscientiousness (C). If a salesperson doesn’t test in the high “D” or “I” trait, we pass on them. It doesn’t matter if they are the most knowledgeable about your product. Or that they worked in system sales for 10 years. What matters is whether or not they are sales material. Are they motivated by success and closing sales? If you can get one of these folks on board and motivated, then you will see the ability to put $2 million on the sales board annually. Systems, service, and branding are important, but it still comes down to person-to-person sales closing. You need to invest in getting the right people in front of your customers.
3. Focus on it –
HVAC sales needs defined roles that help drive effectiveness and efficiency. Depending on the size of your operation, these roles include: a) a sales coordinator who takes all replacement and sales leads, call-ins, service department transfers, sales tracking, financing paperwork, and contest communication; and b) an install coordinator who puts job folders together, tracks job costing, assists the install manager, and files rebates. If you don’t have the resources to support both coordinator positions, consider combining them into one. Make sales part of service department KPI tracking. Service technicians should be turning 7-10% of their total call counts into replacement opportunities. If you run 2,000 service calls per year, you should get 140-200 replacement leads annually. If you are below 4% you either have a technical training issue, a motivational issue or a morale issue.
4. Plan for it –
No matter what size your company is, you must create (or hire help with) a marketing plan. A sound marketing plan is based on market research, and clearly defines what media sources you’ll use and when you’ll use them; any co-op plans your equipment supplier offers; how much you’re willing to spend; and how long you want the campaign to last. Generally, I find that if I spend 10 percent of my replacement revenue from the prior year on marketing, I get revenue growth of about 10-20 percent. I recommend spending at least 5-7 percent of total sales on marketing.
SUCCESSFUL MARKETING: GETTING THAT PHONE TO RING
With a lead conversion and sales growth plan in place, it’s time to consider how best to market your company in the digital age. An integrated approach is best, but it’s important to fully understand each channel.
Online marketing starts with your website. An informative, easy-touse, dynamic website is like an online brochure for your company. Be sure to perform due diligence before hiring a website design firm – ideally, you’ll find a designer who is familiar with the HVAC business. A website address that is simple and incorporates your company name will make it easy for consumers to remember. It’s also important to ensure that your web address is visible on every piece of communication that leaves your office.
To improve your search ranking, ask your vendors, advertising partners, and other relevant sites to back link to your website. Perhaps even more important than back linking is to regularly update the site with fresh content, including videos introducing pages, homeowner tips, etc.
Use a tracking system in all Pay-Per-Click and SEO campaigns. Hire a marketing company that understands your business and market. Set up specific landing pages with tracking URLs and tracking phone numbers to help quantify your campaign’s success. For example, over the past 6 months I have spent $60,000 for all PPC campaigns; however, I have received 1,714 calls and online schedules. Overall, I paid $35 per contact, which is a bargain in today’s cost per lead world. You want to be sure that the ends (sales revenue) justify the means (marketing costs).
You can’t afford to ignore the growing power of social media. When I began to use social media for marketing in 2009, I promised myself that I was not going to ask for ROI until social media was more evolved. If you think back 10 years, contractors were asking the same about their ROI on their website. Those that did up to recently are now playing “catch up” in the online world. I didn’t want to get put in this situation. Again, I recommend hiring an outside firm that specializes in social media. If the stats prove true, women make 74 percent of household repair decisions and women are the major users of social media, then social media referrals will be significant in the future.
Perhaps one of the most significant changes in marketing in the last decade is that customers have a voice. You’ll gain credibility with customers if you give them an official space to post reviews on your website. If you do a good job, ask for a review, and reap the benefits. If your customers aren’t pleased, future customers will base their decisions more on how you resolved the issue than the negative review.
Utilize media based on where your company has developed its service culture. If you are well established in a community and can afford it, use cable and radio advertising to make folks aware of your company. An easy to remember phone number, or a vanity cell number like **cool, can help people remember how to reach you. Again, your website will be frequented as you market, so make sure it is the best around.
Jaime DiDomenico began in the HVAC business in 1981, and has worked many positions for regional and national home service firms. He purchased N&M CoolToday in March 2004 and, as of 2013, has grown replacement sales by $7 million.
Articles by Jaime DiDomenico
Selling HVAC Equipment in A Post -Millennium
How to Optimize Your Company Culture for Sales Growth