Tom Piscitelli's T.R.U.S.T.

Sales Byte®

What Matters Today to Post-Recession Consumers

Consumers continue to have many reasons to be cautious: unemployment has remained high, financial market problems continue, the federal government is in flux and more. These factors have driven post-recession consumers into evaluating their purchases more carefully than ever before. The latest reports on consumer buying behavior say that two factors come out at the very top of their decision-making process: quality and price.

Wait a minute…”quality and price”? What’s new about that? The balance of quality and price equates to “value” and value is the bottom line in any purchase, recession or not. I buy premium gas for my car because it runs better and I believe will help the car last longer so it’s worth the extra money to me. I buy regular gas for my lawnmower because it works just fine on the cheap stuff.  So, if quality and price are the most important factors in making a buying decision, why are consumers acting so differently than they had just a few years ago, getting many bids, repairing instead of replacing, taking weeks to make decisions instead of days…?

It would seem that consumers are now giving much more weight on the quality of their purchase. This just doesn’t include just the product but includes everything that goes along with it such as, in our industry, the sales person, the company, the installers, the availability of service, the guarantees and warranties and so on.  For example, one study reported 26 percent of respondents in the U.S. intending to increase their purchase of private label brands because the private label implies more care is taken in producing and supporting the product.

Is “price” important? Absolutely, price is always important. But what’s most important is value. Please don’t assume when the customer challenges your price, or compares your price, that they are telling you they want the lowest price. Most don’t. They want the best value…the best value that meets their needs. And today is would seem that demonstrating the quality of a product or service is the best way to create that value.

Will one person pay a significant premium for something that the next person doesn’t care about? Absolutely.  How can you tell who will want and pay for something? The only way to know for sure is to ask.

There are many ways to add value, explain value and also take-away value. Stay tuned for more.

Good Selling.


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Focus on the Bottom Line

No question that all of us are feeling the pain of the week economic conditions. Our industry has been suffering for a couple of years longer than the general economy with the decline of the housing marketing leading the way into the recession.  Good news is that most of North America has benefited from a much warmer than normal summer! But we can no more count on weather as our savior as we can rely on new construction rebounding in the near future.

So growing out of our problems collectively or individually is not a realistic strategy, as the size of the pie has systemically gotten smaller.  Trying to slice out a larger piece of a declining opportunity can create some major battles and typically ends up resulting in lower prices for all.

So what are we to do?  Clearly to me the focus needs to be on maximizing your profit.  From my experience in working with contractors across North America there is ample room for improvement.  So for the next several newsletters I will be focusing on the many ways that can easily quickly be employed in a contracting business that will result in an improved bottom line.  So if I don’t hit a hot spot today, stay tuned!

Let’s start with the fundamentals and the most misunderstood part of the price equation.  Everyone’s price is ultimately made up of four main components. 

  • Material Cost
  • Labor Cost
  • Overhead Cost
  • Desire Net Profit

To improve your Net Profit without raising your price and risk losing market, one or all of the other three elements must go down.  Our suppliers have had just about as much squeezed out of them in recent years as possible and typically buying at a lower price than competition is temporary as the market tends to adjust towards the lowest price. 

While an abundant labor pool in the past few years had allowed wage rates to be attacked, I am hearing more and more that labor shortages (at least of qualified techs) are starting to reappear as many of the chronic unemployed have left the industry and we have fallen further behind on recruiting new talent.  So I am betting we will see upward pressure on wages.

This leaves Overhead Costs as the major component that can be attacked.  There are many organizational strategies that can reduce your overhead rate.  New technology offers significant options to reduce redundancy and improve productivity in administrative functions, plus provide you with improved management information and tools to run your company better. 

Our next article will focus on Overhead – what is it and how to calculate it.  Even if you are a small company working out of your home, you have overhead expenses and room for improvement. As you grow, how you handle increasing administrative responsibilities without adding overhead is critical to successfully making that hurdle. 

Mark Sims is the founder and chief architect of TRUST PRO® online, a HVAC operational management system that can significantly reduce overhead and improve productivity in all areas of a contracting business.  For more information and a free demo of how to use TRUST PRO® online to reduce your overhead and improve your profit, log onto

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A smile can make such a difference. A smile announces to everyone how you are feeling at that moment, whether it’s allowing a fellow driver to enter your lane during rush hour or when you are arriving at your client’s front door to perform their annual HVAC servicing.

Many service technicians forget about the power in the simple act of smiling. Sure, you have some rough days, but just put that aside, or any situation in your life that may be bothering you, at that moment.

If we all lived our lives as though there were a camera filming our every move, we would all smile a little more. As you prepare to head off to work, turn on an imaginary video camera that is going to record your every move. Throughout the day look directly at the camera, smile into it, and remind yourself you are being filmed.

I will bet at the end of the day you will find yourself smiling just a little bit more. You’ll create an immediate difference in how you relate with everyone. Drop me an email and let me know how you made out. Oh yeah, and don’t forget to brush.

Tye Leishman has serviced, installed and sold HVAC systems for more than 20 years. He is the founder and President of Tempco Refrigeration & Air Conditioning Ltd., a full service HVACR/Electrical contractor located in Powell River, B.C. Canada. He is also a certified sales trainer with TRUST® Training and Consulting. Tye can be reached at 1-604-485-5352.

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Hiring a New Sales Person: No Experience Necessary By Mike Rogers

Hiring the right sales person is the most important job a sales manager or owner has.  Have you hired an “experienced” HVAC sales person and found he brought along a lot of bad habits? Contrary to what you might think, your best sales person can be the one who starts with no HVAC experience at all.

Unlike other companies in other industries, there is not a natural progression within most HVAC organizations into a sales position.  Technicians and installers often went into their respective professions since that complemented their skill set and interests. 
A top technician who ‘sells’ and does a good job generating leads is not necessarily going to make a great in-home sales professional.  Many cannot make the transition from being highly technical and learn the ways of the engaging, persuasive sales person.

The simple recipe that served my sales force of 20 sales professionals for over fifteen years was to hire good salespeople without any former HVAC experience. Why no experience necessary?  Again, because a good sales person can sell anything.  Train the right habits without short cuts and you will have a highly productive force.

Without HVAC experience you have the power to shape the sales process.  Teach the right habits from the beginning:  how to tee up the appointment, measuring with the customer, performing the load calculation, asking the comfort questions that lead to a powerful system recommendation and close.   Teach your sales people how to do each in-home appointment properly and thoroughly regardless of circumstance. 

How many times has a ‘seasoned’ HVAC rep made a judgment on sizing equipment based on experience without a load calc?  How often is a judgment made that based on the appearance of the home and customer they should be bid only certain equipment?  How often is a sales rep surprised when the customer who ‘appears’ like they can only afford the bare minimum writes a check for $15K and the customer in the mansion needs long term financing?

Hire good sales people, get rid of bad habits and watch your revenue grow by double digits – no experience necessary.

Mike is an innovative leader with over 20 years’ HVAC experience in generating sales and increasing earnings.  Mike has led one of the most successful HVAC sales teams in the nation, generating over $40 million in annual residential replacement/add-on sales.  Currently, Mike co-hosts a CBS radio talk show – the “Centsible Sustainability Hour” discussing various energy topics including residential and commercial HVAC.

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