Biz Tips

By Jim Hinshaw

Just heard of a hamburger joint that is known for developing the skills of the employees to unheard of levels. In fact, their training is so good they have won the Malcolm Baldrige National Quality Award, putting them in the same group as Ritz Carlton, Cadillac and Federal Express. The CEO, Thomas Crosby, who has been with the chain since 1981 tells us that they are in the education business, and they want their employees to be the equivalent of valedictorians. That is the goal they set to beat the competition.

Their training program starts with how to iron the uniform (really?), and moves on to each process they work with in the restaurant. Each employee is certified and recertified on each machine. When they are re-tested, if they don’t score 100%, they are off that machine. Each person in a leadership role spends 10% of their time helping another employee master a skill, it is a well-defined system.

They took the dedication to a new level a few years ago, when they were awarded the Malcolm Baldrige National Quality Award, given by the President Bush in 2001. Part of the tradition that goes with that award is that the recipient agrees to share their business practices with others to help them improve quality. So out of that the Pals Business Excellence Institute (BEI) was born. It is a school where the participants pay from $350 for a half day to $900 for 2 days. In the 2 days they visit a real operating Pals restaurant, go behind the counter to watch the crews work, see how a team can make a difference in speed and delivery. The school is run on a break-even basis, many attendees return year after year to refresh. One of those returnees is Ken Shiller from K & N Management (Rudy’s “Country Store” & Bar-B-Q and Mighty Fine Burgers, Fries, and Shakes, located in Texas), who has brought his management team to BEI many times. They attribute over $10 million dollars in annual sales growth to the techniques learned from BEI, and won the Malcolm Baldrige award themselves.

Pals was started in 1956 by Pal Barger, they now employ over 900 people, have only gone through 7 general managers in the last 33 years, has a turnover rate that is half their nearest competitor, and average a customer complaint once in every 3500 transactions. Crosby says he wants the experience that each employee has at Pal’s to last them a lifetime, and no matter if they are a doctor or chemical engineer, the things they learned at Pal’s still apply today.

My question (and you knew it was coming) is this: does your company have a training program for each employee? Are they tested and re-tested on their specific job? Do they help the other employees as part of their duties? Do they know how to iron their uniforms? What are you doing different than the competition to train and keep employees, and help them succeed in a competitive environment. Hamburgers are somewhat of a commodity: some meat, a bun, mustard and relish. Commodities are bought and sold at the lowest price. What makes the difference at Pal’s is the service and quality control they bring to a commodity.

Our business is, and should be, completely customized. We have to buy plumbing fixtures, water and sewer lines, water heaters and install them with all manufacturer, state and local codes complied with, then and only then will they get the health, safety and performance they paid for in the system. No two systems are exactly alike, even if the homes are the same. A different family lives in the home, so things like hot water needs, fixture details, decorating tastes and utility bills pay different roles in what the customer wants and needs. In fact, we offer some of the best looking fixtures in the home, no one ever shows off their new furnace, it may be in the attic.

One of the topics that come up all across the nation is how do we find and attract good employees to join our team. The answer, make the team better than the competition, train them better, let them know more is expected, pay them better, they will come. So set up a training program for your company, follow the example of Pal’s. and if you get into Tennessee or Kentucky, stop by a store, get a meal, watch them perform.

By Patricia Bonacorda

Regardless of where your plumbing company is located, it’s probably not the only game in town. Just because a customer hires you to perform repairs once is no guarantee that he or she will hire you again in the future. That’s true even if you deliver service of the utmost quality. When the need for a plumber arises again, it’s all too easy for customers to forget the name of your business and to choose a different company at random.

Some plumbing business owners worry more about attracting new customers than about retaining existing ones, but that’s a big mistake. The fact is that it costs a lot less to keep current customers than it does to earn new ones. By ensuring that customers remember your company in the future, you’ll continue to earn their business. What’s even better is that when customers are able to easily recall the name of your company and are happy with the service you provide, they are more likely to refer people to you as well.

With so much competition out there, how can you make customers remember your plumbing company in the future? A few prime examples include the following:

Make Customers Feel Important

Building and nurturing relationships with existing customers increases the odds that they’ll hire your company again in the future. A great way to do this is by making customers feel special and important. A simple thank-you card can go a long way. Another option is to occasionally send special offers via regular mail or email. When customers know they’ll get a special discount by hiring you again, they’re a lot likelier to do so.
Use Promotional Items

People love getting stuff for free, so why not hand out promotional pens, notepads, magnets or other items after completing service calls? Promotional items can be ordered in bulk, which usually makes them affordable. With your company’s name, number and other contact information emblazoned on each item, people will be reminded of your plumbing business and know precisely who to call the next time they need help with a clog or other plumbing problem.
Follow Up after Completing a Job

Very few plumbing companies take the time to follow up with their customers to ensure that the work was done to their satisfaction, so this is a great way to stand apart from the crowd. By contacting your customers within a day or two of completing the work, you’ll show them that you really care. Most people are pleasantly surprised by such efforts, so the name of your business is much more likely to stay in their minds in the future.
Develop Strong Relationships

Rather than treating customers as a once-off proposition, make a point to get to know them to establish long-term relationships. Customer management software can really come in handy by allowing you to keep notes about each customer’s previous jobs and details about their homes. Simply making a point of referring to your customers by name as often as possible can have an enormous beneficial impact.
Send Helpful Newsletters

As the owner of a plumbing company, you undoubtedly know all kinds of tricks and tips that your existing customers will find useful. Why not share them by sending out newsletters on occasion? Whether you send the newsletters on a monthly or quarterly basis, they will help to keep your business in customers’ minds. They can be sent via direct mail or email. In the case of the email, be sure your customers opt in first.
Send Holiday Greetings

Very few plumbing companies bother to send greetings around the holidays. Other times, they only send cards to their biggest customers. Stand out among the competition by sending holiday greetings to as many existing customers as possible. Just remember that not everyone celebrates the same holidays, so keep the greetings somewhat generic in nature.
Make Effective Use of Social Media

You may have written off using social media because you don’t think anyone would follow a plumbing company on a site like Facebook. But if you give people a reason to do so, many of them will. Offer incentives to customers who follow your business on Facebook, and periodically post friendly updates to remind people that you’re available to help. The return on the minimal amount of time and effort needed to be active on social media can be considerable.
Conclusion

Don’t fall into the trap of exclusively focusing your marketing efforts on new customers. Your current customers are very valuable to you, so take steps to remind them of your plumbing business. You’re sure to be pleasantly surprised by the payoff.

Author Bio:
Patricia Bonacorda is the President of Spartan Plumbing a plumbing and HVAC Company that has been in business since 1964. Spartan Plumbing assists both residential and commercial customers all throughout the Washington DC Region.

Success – by Jim Hinshaw

Just had a conversation with a client: what are the top three things that are standing in our way to improving profits this year?  I said, my view from 30,000 feet, here are three that I see.  Not enough leads, close rate too low on the few leads we have, and profits are lower on the few we do sell.  Sort of connected, one leads to the next in some ways.  Take the not enough leads opportunity: when the number of leads drops off, we look at our numbers, realize the bank wants the mortgage money even if the weather was beautiful, sale or no sale.  So we lower our prices, but turns out the competition is doing the same thing.  And even if we do sell one, it is at lower efficiency and/or price point than we hoped for, so the profits are not there.  How do we fix that?

First of all, don’t depend on the weather, the economy, or some government tax credit  to drive your business.  It will disappoint you.   How do we make the phone ring?  Simple, by picking it up and dialing it.  Yes, calling your customers.  Go ahead, tell me you can’t, against the law, all that sort of stuff.  Not if they are already clients.  So call your customers who have done business with you in the past, offer them a discounted tune-up, a safety inspection, or free analysis of their water in the home.  People are not doing maintenance as much as they used to in this economy, but they will spend money on three things: health, safety, economy.   They will not call in, you have to initiate the call, make the offer a decent one that gives them some assurance they will get a positive result (maybe a money back guarantee?), make it a positive thing.

Two other positive outcomes from calling out to your customer base.  The replacement job is not on the street.  You created the opportunity.  The customer who has used you in the past trusts you; you have become the trusted advisor.

Now, how do you build your customer base.  One way is to join a networking group.  Like BNI.  Business Network International.  Go to bni.com.  You can find a chapter near you, and search for chapter that is looking for your trade.  They only allow one company from each trade, if you are the plumbing company, there is not another one.  Cost is about $400 per year; a couple of service calls will repay that investment.  Typically you can sit in a couple of meetings without joining, see if the magic is there.  If not, try another group.  Find one that meets in the morning, with over 20 members.  Less than that, they are not an a fully functioning group, may be a while before they get traction.  Usually the real estate, insurance, and lawyer groups meet at noon for lunch.  Our best bet is in the morning meetings with the painter, roofer, floor covering company, ones that are getting engaged with remodeling projects.  So if you cannot make that happen, form your own networking group.  Meet for coffee once a month with a roofer, pest control company, alarm company, companies you trust and would like to refer people to.  See how their business is going, and something neat will happen.  They will actually help grow your business.  Have a formal program in place where your company knows who to refer a roofing job to.  Don’t ask or expect a referral fee, instead let them know you want reciprocity.

One creative idea that I heard recently, a heating/air conditioning contractor worked with a pest control company to build his business.  When someone signed up for a monthly pest control service, they also got a heating/air conditioning maintenance at no cost.  What does it cost to add a new customer?  Adams Hudson will tell you it can be as much as $400 to bring them into the boat.  So spend less than $100 in labor, pick up a new customer, which is also a positive thing for the pest control company.   That is the sort of thing you can test on a small scale, grow it if it works.

So when you begin to look at projects that are referral based, or your own customer base, the last two items are taken care of.  You close more, at higher prices.  You are a trusted advisor, and the customer will open up with their real concerns, and you will sell more of the cutting edge products, higher efficiency, higher priced.  Instead of having to beat the other guys price.  When you tell the customer the price is built on what they said they wanted, they realize it is not your fault, they actually asked for that investment number.

Another item that will glue the customer to your company is your maintenance agreement program.  I talk to contractors all over the nation, just spent some time with a company that has been in business since the 50s.  Over 60 years.  I asked them if they had a maintenance agreement program, they said yes they did.  When I asked how many agreements they had, it got real quiet.  Finally went to the service dispatcher, she said they had almost 300 in effect.  The owner challenged her, said it had to be more, but it wasn’t.  So they had about 5 per year in business.  Not good.  No matter if you have been in business 5 months or 5 years, start today to sell maintenance agreements.  Set up a goal to add 100 or 500 this year, break it down to so many a month, per tech, per day, make it easy to track.  Then track it.  Share the results weekly on a chart, get the entire company involved.  Have a weekly award for most sold, greatest improved, largest dollars, that sort of thing.  Your maintenance agreement can be on HVAC, or Plumbing, or both.  Why not combine them into one great maintenance program, where you drain the water heater each year, check all the hose bibs, that sort of thing.

If you need help putting that program together, let me know, have done that many times.  And thanks for listening, next month have a great testimony from a client who used some sales techniques to land a couple of interesting jobs totaling over $500,000.  Yep, half a million, two jobs.  From a company that does a lot of residential, and one of these was a public bid that had to get three prices.  All by listening and taking action, not doing what the other guys were doing.

Oh, thanks also from those who bought my book, had some great sales last month, just got a check from PayPal, that is a good thing!