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A March 2011 study by Colloquy showed that 75% of people will let people know they are unhappy with a product or service, compared to 42% who share products and service that they are happy with.

The study goes on to say that even those who are happy consumers who recommend companies to others, will share bad news. 31% claimed they are more likely to share an unhappy experience than a positive one.

The study goes on to share that there are three distinct groups we need to be aware of:

 Advocates: will recommend favorites, but not a lot of followers.

 Connectors: they have lots of followers, but are not vocal about their experiences.

Champions: they are vocal and well-connected, have followers they frequently contact, both family and friends.

So about 1/3 of the population falls into the Champion category, which is good to know. What is not good is to realize that we have a sub-set of the Champion group who are far more likely to spread a bad experience than a good one, a group that can wreak havoc on your brand very quickly.

Here are some statistics to be aware of.

• It is 6-7 times more expensive to acquire a new customer than it is to keep one you already have.

• Increasing customer retention rates by 5%, increases profits by up to 95%.

• 83% of customers say that a loyalty program makes it more likely to continue doing business with a company.

• A company has a 60-70% probability of converting an existing customer to a sale, on a new prospect, only 5-20%.

• Existing customers spend 67% more than new customers.

They already know you, your products, your services, and you have a relationship in place. So it is easier for them to open their wallets for your products rather than a new customer.

Here are some lessons from this information to apply to your plumbing business. First, make sure you recognize the Champions, they have a voice in the marketplace, and will use it to share experiences.   Second, it is the bad experiences that impact our lives and maybe even survival as a human being. We are mesmerized by accidents, floods, earthquakes, sometimes thinking we are glad it is not us, but we just can’t look away. In fact, the brain detects negative information faster than positive.

In a business relationship, it typically takes 5 positive events to match up to 1 negative. The old “Atta-boy” rule. We want to share the bad and wait to share the good. That is why websites like Yelp have such power; even we go to them to see how a painter, roofer, and landscaper does in the real world. Not just how good “they” say they are but what the “customers” say.

The harsh reality is that the customer has a lot of power today. Thus, the phrase “The customer is always right!” This phrase is not always true of course. What is true, however, is that they always “believe” they are right, even when they may be wrong!   In some cases, it may even be best to fire a customer, one who is taking up too much time and causing strife in your team. But it must be done politely and gently today to avoid poor publicity and reviews on social media sites and review sites like Yelp and on Google. But you should always have a plan on how to deal with mean or threatening customers.

So if a bad experience occurs, and they will from time to time, handle it fast. Make sure your team has the tools and authority to make decisions necessary to make the customer happy. You want to keep the customer in the family, customers who had a problem that was solved fast bought more and became more loyal than ones who had a problem that was not addressed. Even more important, only 1 in 26 complain, the other 25 take their business somewhere else.

Finally, realize why customers leave:

• 1% die
• 3% move
• 5% buy from a friend in biz
• 9% buy at lower price
• 14% lost to unadjusted complaints…
• 68% leave because of an attitude of indifference an apparent lack of interest by any one employee!

Lesson here: everyone is in sales! Let each employee know how important they are to keeping customers and growing the business. Employees tend to follow the lead of their leaders, which starts at the top.

By Marjorie Adams

One of the biggest worries for plumbing contractors, franchise owners and office supervisors is managing their field staff, the technicians who are always remote and on the go. Keeping tabs on your staff’s productivity and customer service skills, as well as their technical abilities, can spell the difference between having a thriving plumbing practice with lots of referrals versus bad online reviews and less business.

Managing a service staff is easier said than done, but there are a number of recommendations you can put to use right away:

1. Improve Your Work Order System. Probably the most powerful way to keep tabs on remote employees is to automate your workflow. Using field service software will allow you to more easily schedule your plumbers, track how long they take to complete a job and get to the next one, and manage your accounting. With field service management software, your main office is always in touch with the your team. This kind of system also manages employees, inventory and invoicing, and integrates with your accounting system. We prefer Intuit Field Service Management, but there are many great options out there like Jobber, Service Titan, FieldAware, Electronic Service Control, Service Pro, Service Max, etc.
2. Go Green with Timesheets. Use an online timesheet that employees access from their mobile device or tablet. This streamlines your payroll process because time tracking uploads directly to your accounting software; it also saves time deciphering handwritten timesheets that get lost or crumpled during a plumber’s busy day. Some systems even notify you if an employee doesn’t clock in as scheduled.
3. Customer Survey. Nothing replaces direct feedback from your customers. If you haven’t already, implement a customer survey process. As soon as a job is complete, email or text the customer a link to a survey. You can use SurveyMonkey, Google Forms, Typeform or another online tool. While this is a great overall business strategy, also be prepared to contact the customer if you get negative feedback. Either way, it’s better hearing directly from an unhappy client so that you can take steps before they post a negative review online. See more advice on this below.
4. Create Processes. Document your processes and train your employees on them. Ensure you share what you expect them to do. Think beyond human resources. Here are a few examples:

• Create Great First Impressions. Just like how you answer the phone is important in establishing long-lasting customer relationships, the way the plumber initiates the house call can make a big impression on a client. Have a consistent approach to introducing yourselves.
• Provide Accurate Estimates. Whether you submit a proposal before a big job or estimate the cost on the spot, providing accurate and detailed estimates can go a long way. Your employee needs to understand the proposal process and how to handle pushback.
• Stay in touch. Staying in touch with clients will encourage repeat business. The app, GetCru, allows customers to request service via text. It also helps you stay connected with customers, and allows all communication between the staff and customer to be located in a central system.
• Manage Complaints. Having a standard response and process for customer complaints can help a plumber get out of a sticky situation more easily.

Managing an on-the-go staff has its challenges, but doing it well can cut down on employee turnover and improve customer satisfaction. These ideas can help you get there.

About Marjorie Adams

Marjorie Adams is president/CEO of Fourlane, a firm that improves the efficiency of client accounting departments through bookkeeping, tax, software consulting and business process training. Marjorie has set up back office processes for plumbing contractors, HVAC service companies, and pool and spa maintenance companies that, among other things, improve their ability to monitor staff. The firm specializes in showing customers that they can continue in higher level QuickBooks products as they grow.

Leading water heater manufacturers like Bradford White, Rheem and A.O. Smith spent many years designing and developing new technology to meet the energy-efficiency standards in the National Appliance Energy Conservation Act (NAECA). Since those standards went into effect last April 16, Contractors, wholesalers and distributors – as well as their residential and light commercial customers – have adjusted to the changes. Now, the manufacturers are catching their breath, and looking forward to the future.

“We will continue to it refine water heater technology,” said Carl A. Pinto, Jr., director of marketing for Bradford White Water Heaters in an interview with Plumbing Perspective. “In the years to come, water heaters may be considered a key component of a whole-house energy solution, rather than a stand-alone piece of equipment. In other words, contractors and homeowners will be focused on the overall plumbing and heating systems and how they interact with each other.”

A smooth transition

In addition to developing the new technology, the major manufacturers also invested significant resources in education and training programs. “Along with launching a new product line, we have also been educating customers and consumers in order to make this transition as smooth as possible,” said Stacey Gearhart, director of product and channel marketing for Rheem’s Water Heating Division, in a 2015 interview.

That focus on keeping contractors aware of the NAECA standards and what they mean to their plumbing and heating businesses has minimized market disruptions, according to Chad Sanborn, product marketing manager, Bradford White. “While the new standards affect manufacturers, contractors and distributors are still able to sell their existing inventory and are continuing to do so,” Sanborn said. “We did see an increase in orders prior to the deadline for the new standard.”

Noting that there has been little feedback from homeowners regarding the new standards, Sanborn said contractors can assure their residential customers of the high quality of water heaters manufactured under the prior standards.

Pinto said the biggest change under NAECA is that the new energy-saving water heaters take up more space in the home. “There has been an issue in many regional markets around the country, including older homes in California and Florida homes without basements,” he said. “That has been less of a problem in the Midwest where homes generally have more space to accommodate larger heaters.”

Sanborn added that contractors have come up with some creative solutions to address this challenge, such as installing two 40-gallon water heaters side-by-side to replace an outdated 80-gallon heater. “However, labor can be another issue because some of the new heaters require two installers rather than one,” he added.

A broad impact

The 2015 NAECA rules, set forth by the U.S. Department of Energy, mandate higher energy factor (EF) ratings on virtually all residential water heating products, including gas-fired, oil-fired, electric, tabletop, instantaneous gas-fired and instantaneous electric. However, the most dramatic changes are in larger capacity models, because the only technologies that meet the EF requirements over 55 gallons are electric heat pump water heaters and high-efficiency condensing gas water heaters.

The DOE estimates that the 2015 standards will result in approximately $63 billion in energy bill savings for products shipped from 2015-2044. The standard will avoid about 172.5 million metric tons of carbon dioxide emissions, equivalent to the annual greenhouse gas emissions of about 33.8 million automobiles.

As Sanborn said, “Homeowners will have a lot to gain from the NAECA guidelines with some saving hundreds of dollars per year in energy bills.” In addition, some technology, such as electric heat pump water heaters, may provide supplemental cooling and dehumidification benefits to owners.

So here we are in another new year. I hope you have your seat belt on, figuratively speaking, because we are in for a wild ride. Maybe 2016 will be similar to other new years, but there is a chance it will be turbulent. Maybe tougher to do business. We have a lot of distractions, starting with the political circus, the roller coaster economy (the stock market is moving faster than a Tesla), and ending with the available labor pool. I found a few lessons about these in my travels.

The labor issue

Janah Morehart has a company in Phoenix called Morehart Air Conditioning and Heating. Her and Josh have been in business for a while and have seen how hard it is to get and keep great employees. A few years ago, she was in an office supply house getting some printing done when she met a young man who provided exceptional customer service. She asked him a few questions and ended up hiring him to come to work in her office on various marketing packages. A year later, he was helping in the field, and then moved into service. This year her distributor rolled out a new high efficiency inverter driven compressor system with all the bells and whistles. This same young tech she hired from the office supply store sold 6 of these systems in the first month of introduction with an average sales price of around $16k. WOW!

So if you ask Janah how to find good employees, her response will be quick. They are all around us. They are at your local Starbucks, Kinko’s, Applebee’s and alike, doing what they have been trained to do and performing it to near perfection. They always provide excellent customer service and you can easily notice them. Janah’s general manager used to run the office for a chiropractor. Janah became highly impressed with her management skills and made an offer to work in HR. So keep your eyes open always in the most unexpected places. Be ready to ask an employee that has outstanding customer skills if they are happy with their current job? Josh Morehart says he can get a new guy productive in 6 months, even coming from another industry. The new rule for finding employees is, hire for attitude, train for skill. Find the one in the crowd who serves others and has a great attitude. They can always be taught your business and trade.

Profit in Maintenance

I am still surprised at how many companies still do not do much with Maintenance Agreements. Grow the customer relationship today; it has value for your company. I mentioned this in another article recently, but it bears repeating. Figure out what you want to accomplish on a maintenance program that offers value to your custoemrs, establish the minutes needed for each task, total up the minutes, add in some travel, a spiff, and there you have your one or two year maintenance agreement. Another option is to set it up to debit the customer’s checking account or credit card monthly, and offer it as a continual maintenance program with no end until they cancel. Pay your technicians a better spiff when they sell a program on a monthly basis, maybe with a set amount per month, that they receive commission on until the customer cancels. And don’t cap it because this can be the glue that holds that employee to you. While in that neighborhood, add in additional services to your maintenance agreement for additional revenue. Include changing smoke detector batteries and other plumbing, HVAC, and electrical services that are easy for your plumbers and technicians to do but hard for the customer to do.

It turns out; this year will probably be tougher than last with more on the consumer’s plate. So we have to get creative on how we get new customers. Team up with a local company who is in homes on a regular basis with pest control, pool maintenance, or alarm services, etc. Get them to include your service with each new customer they add. Maybe you can offer a tune-up, an inspection, or something the customer does not pay for. So it adds value to the pest control company as an example. You end up with a name of a customer who trusts you since you came in with a company they are already doing business with. Now offer them a reduced price maintenance agreement or something to show that they are now within the inner circle like a friends and family that receive special pricing.

Also, I recently sat in on a webinar and saw an info chart that showed direct mail is the second best form of advertising (except in 18-34 year olds) to reach new customers. Direct mail followed up with a phone call, still gets effective results. Yes, calling your customers is the best way to make that phone ring, just pick it up and dial. You already have a relationship; you are not selling land in Puerto Rico but a valuable service they need.

Outside the box revenue generation

I just read an article about an Uber car driver named Gavin Escolar, who made $250,000 + last year. A little above the average for that industry. But he also sells jewelry for both men and women. He has a couple of flyers and catalogues in the back seat pockets of his car which is immaculate. He made about $3000 per month from Uber, and the rest of his income came from custom jewelry he made for many of his customers, customers he has in the car for 10-15 minutes at a time. What a great concept. He has new people coming into his show room each day with an income level perfect for his target market. He says that even going door-to-door would not come close to the response he gets from my passengers. He has great reviews from his passengers with an averaging 4.85 out of 5 on Uber Black, the high end Uber service. Uber is fine with him selling his jewelry in this manner and says they want to improve the local economy and his Uber ratings are at the high end of the scale. But he has not forgotten his roots. He used his money last year to buy 3 new cars and hire 6 drivers. He recruits unemployed Filipino immigrants, his homeland, and gives them a helping hand.

He is a great example of doing something different by creating a niche market. This is the example we need to do today, something different. The old ways will not be as effective this year and beyond to generate additional business revenue and profit.