Light Commercial Service and Service Agreement Part 2 of 2

In the March issue, I wrote about the growth and diversification opportunities in building an hvacr light commercial service and service agreement business. I discussed how this segment of the business can be a natural, synergistic, and fairly easy method of significantly expanding revenue growth and profits for retail companies.

This article focuses on how to develop commercial service agreement sales leads that will establish and grow your service agreement customer base. Sales lead sources are:

• Vendors. In my companies and later when working with consulting clients who were interested in developing a commercial service agreement customer base, I learned that this is the first place to start offering the agreements. This sales lead source always works well in producing sales. The companies that your organization supports should be inclined to support your company. It’s logical to pursue them. Spend some time developing a list of all of the companies you do business with on an ongoing basis. The list should include, among others, office supply businesses, any media outlets, fuel vendors, banks, tire stores, hardware stores, building supply centers, and vehicle repair centers.

• Service technicians. For many hvacr companies, this is the greatest saleslead source. Service techs have an opportunity for a sales lead — or for some techs, a sale — every time they perform a demand or emergency service call for a non-service agreement customer. As we well know, customers put a lot of confidence in what our techs tell them. Maximizing this important source involves training and a reward program through spiffs. For more on spiffs, incentives and motivation see HVACR Business, Vol.1 / No. 7 “Rewards That Work,” Ron Smith, December 2006.

• Your company’s newly completed installations. If it is a design/build job, your service agreement should be presented early in the discussions and should be an element of your total proposal. No other hvacr company is as knowledgeable about the installation as yours — including any unique characteristics about the job. This clearly makes you the logical service provider. If it’s a plan and spec job and you can’t present your service agreement early in the installation discussions, it should be presented before the job is completed or most certainly very shortly after it is completed.

• Your company’s past installations, regardless of when the job was completed. Obviously, the more recent installations are the better candidates. Once again, you are the logical service provider.

• Completed installations by other hvacr contractors. Many contractors are interested only in performing installations and have no interest in providing service. In your local travels, be aware of new buildings and businesses. Also, research local building permits and certificates of occupancy. They are public records, and it’s easy to get the information. With some hvacr contractors, you can negotiate providing their warranty service obligation, which places you in a very favorable position to present a service agreement to the building owner or property manager.

• Demand service customers. You are probably already providing demand and emergency service to some businesses. Obviously, they have confidence in your company’s ability to perform, and you have familiarity with their heating and air conditioning system(s). Present them with a service agreement. Show them how the ownership of one of your service agreements can save them money and provide them peace of mind.

• Professional relationships. It’s logical to assume the professionals (accountants, attorneys, insurance agents, advertising agencies, and others) that you support with business should reciprocate. Perform an equipment survey, prepare your agreement, and hand it to them for their signature. Also, these professionals are capable of referring your company to other clients.

• Companies owned or managed by your residential service agreement customers. You probably already know many that fit this business ownership or management profile. However, they probably are not aware of your ability to take care of their commercial needs. Try to determine which residential service agreement customers fit the business owner or manager profile. Get an appointment and show them how you can save their business money just as you do in their homes.

• Property managers. Many developers, owners, and landlords turn the management of their commercial properties over to property managers. This includes condominium projects, apartment projects, office buildings of all types, and shopping centers. Take the time to learn the names of all of the property managers in your market area. Then, work on forming a relationship with them. Normally, property managers handle a multitude of responsibilities including attracting tenants, negotiating leases, collecting payments, and — most importantly for us — arranging for on-going reliable sources of service. Most often they make the decision on which hvacr company or companies will be awarded service agreements. In developing your relationship and in your presentation, focus on how you can make their lives easier. Explain the quality of your service agreement precision tune-ups and the benefits of the program including energy savings, greater comfort, and priority responsive service when required; and how those benefits and others result in tenant retention.

Check out Business Owners and Managers Association (BOMA), (www.BOMA.org) and find your local group. It is an excellent international group. In the United States, about 16,500 members represent 92 local associations. The membership includes property managers and allied or associate members. Investigate how you can become an associate member and then get involved in the organization as a method of networking and forming relationships. Associate membership is limited, and individual chapters make the decisions.

• Cold calling. This is simply the practice of stopping at a business, introducing yourself and your company, giving them a couple of business cards, and trying to get a follow-up appointment for a presentation. This simple common practice has resulted in a lot of service agreements. Don’t be disappointed in not being able to schedule a follow-up appointment. But, make certain that you drop by again in a couple of months. Persistence often pays off. Leave your business cards each time you revisit them. Many times I’ve seen situations where the business’s usual service provider could not respond to a demand or emergency service call, they remembered the business card, and it resulted in finally getting the account. The message is: Eventually, by out-performing a customer’s usual provider, you can secure the business. Always remember, in this business, it is O.K. to be No. 2. Many times, it’s the second mouse that got the cheese.

• Other sources. Make certain that your company’s Web site includes information on your commercial service capability and your service agreement program; be a member or associate member of various local business organizations, such as restaurant associations and hotel/ lodging associations; reviewing the technicians’ commentary and recommendations on completed service work orders is a good idea; direct mail (both letters and customized cards); an inexpensive small brochure featuring your commercial service agreements that your service technicians can hand out and can be used as envelope stuffers; networking with other types of contractors, such as roofers — which does not produce a lot of sales leads, but is still an excellent source; and membership in community civic clubs, which always results in business as well as providing a method for your company to give back to your community.

If you are not in the commercial service and service agreement business, I hope you’ll strongly consider it as a method of making your company even more successful. If you are already in the commercial service agreement business, maybe it is time to take that segment of the business to a new level.

Ron Smith is a well known leading authority in the HVACR industry. He has over 45 years of experience as a contractor, franchisor, consolidator and consultant. Ron is also the author of HVACR Spells Wealth and HVAC Light Commercial Service Agreements both can be ordered at www.ronsmithhvac.com or by calling 615-791-8474.