How to Determine Your Service and Marketing Area

When I started my first HVAC contracting company I did what many companies do. I tried to service too large of an area and as a result did not dominate the market anywhere. After some time I developed a plan and gradually installed it in all of the contracting companies I owned and managed. I also encourage and coach my consulting clients to do the same. The plan begins with determining three areas based on geographic and demographic considerations.

They are:

1) Our proactive/dominant area.

2) Our reactive area.

3) Our no service area.

Both the proactive/dominant and reactive areas can be described in different ways including zip codes, streets and avenues, neighborhoods and mail carrier routes.

First, the proactive/dominant area: My intent is to build and maintain a lot of presence in this area. Your marketing can be intense in this smaller select area and is focused on building the before mentioned important presence by making many impressions. Demographically the area should have a large percentage of households with middle income and higher middle income. Hopefully, portions of the area will have air conditioners and furnaces ten years old and older.

Our marketing efforts will include a lot of direct mail which is an excellent method of making rather inexpensive impressions in targeted mail carrier routes and neighborhoods, some outbound telemarketing, and a focus on the various guerrilla marketing tactics such as job site lawn signs, door hangers, equipment stickers, the appearance of your techs and installers, wide use of business cards and concentration on the most cost efficient marketing your company has which is the condition and appearance of your vehicles. If there are any civic clubs such as Rotary or Kiwanis in the proactive/dominant area be sure you a member.

It is good if your facilities are located in the proactive/dominant area as it helps control “vehicle windshield time”. If your facilities are not in the proactive/dominant area you should consider moving.

Second, the reactive area: The reactive area is where you will respond to those customers who contact you even though you’ve done little or no marketing in that area. Of course, some of your marketing effort in the proactive/dominant area will bleed into the reactive area.

Hopefully, the reactive area is contiguous with the proactive/dominant area so in your growth plan, when it is appropriate you can slowly incorporate certain portions of the reactive area over into the proactive/dominant area. You can think of your reactive area as providing your future growth.

Third, the no service area. The no service area is easy to describe. It is the area where you will not market or respond to. It is an area that requires too much “windshield time” and where you simply cannot be efficient. It would be only marginally profitable, if at all, in serving it. It’s not only difficult geographically but maybe also is not a good demographic area. It does require discipline not to service this area.

As with most policies there are exceptions – but they should truly be exceptions. An example could be a good proactive/dominant customer who also has a home out in the no service area that needs service.