Every HVAC or (Heating, Ventilation, and AC) company has “profitability” or the ability to generate a profit from their business. However, the companies that make real profits are the ones that have strong practices and strategies for profit, as well as consistent attention to their pricing performance for competitiveness.
Charge the Correct Price
- Develop a profit plan.
- Know your HVAC costs.
- Include value in what you offer (sales process).
- Know your bottom-line, break-even price.
Many HVAC businesses fail to maximize the money they bring in by simply not having the proper management or control of their pricing. You can dramatically improve your bottom line by investing some time in managing your service pricing. When you have set prices, you’ll be able to maximize your “profitability” and revenue productivity; it can even help in deflecting objections to your pricing.
Set Benchmarks for Important Performance Indicators
- What you measure gets accomplished.
- For-profit success, provide the necessary tools and training.
- Identify Key Benchmarks that increase top and bottom-line business revenues.
- Add a stretch plan, expect everyone to give 50% more.
- Reward Excellence.
- Display performances and benchmarks.
A key part of your business “profitability” is managing using benchmarks. Know your numbers, especially target profits; this will provide a clear path to follow and will help ensure you stay on course even when you find your profit vision getting a bit blurry.
Maximize Customer Relations with Current Customers
- After a sale, follow-up.
- Send special offerings every month.
- Send your top 20 percent of customers a personalized note.
- Send thank-you notes.
- Provide your customers referrals for non-competing services; this adds value to what your company has to offer.
- Remember special events or dates, such as holidays, birthdays, promotions, etc.
Many of your profits will typically be used to attract and retain a customer, so keeping those customers can be a big step towards protecting your “profitability” margin. You can more quickly return your initial investment in acquiring a new customer by having a set plan that keeps your customers attracted to your business. Studies show that it can cost upwards of six times to acquire a new customer as it would keep that customer; investing in retaining customers is something your bottom line will like.
Leverage Customer Base
- Customize your offerings, make them something that sets your business apart from the competition.
- Harvest all possible opportunities from your current customer base.
- Build a database of opportunities using that information and utilize it for marketing.
- Get testimonials and use them.
- Extend the HVAC product and service lines you offer to cross-sell and up-sell customers.
- Always get customer feedback for everything.
The “profitability” of your business can skyrocket when you can generate repeat sales with your existing customer base. Several studies show that your overall profits will increase the longer you’re able to extend the lifecycle of selling to your customers. Have a plan that creates enticing offers for your customers, allowing you to continue selling to them again and again.
Use Your Entire HVAC Business as a Salesforce.
- Provide your entire staff with sales incentives.
- Make it fun for them to sell for your business.
- Give rewards for referrals.
- Make supplies a resource for your business by referring their services and products to others.
Your customers with amazing service and value will get them talking about your business to everyone, essentially making them part of your current salesforce.
Imagine the “profitability” your company could see if everyone in the business was involved in harvesting opportunities, then turning those opportunities into leads and eventually sales. When you turn your non-revenue producers into individuals who produce revenue, you won’t have to have a huge sales team; just create a selling environment throughout your business. If you do this, it can have a big impact on overall profits for your company.
Create a Plan Designed to Attract the Best
- Customers (Best fit).
- Employees (Ranked from the best to the worst).
- Vendors (products).
- Opportunities (networking).
- Partners (lawyer, banker, accountant, etc…).
It will cost you profits if you’re willing to accept second best. Always be on the lookout to improve the ideas and people around you until you find the best fit for your “profitability” and yourself. The people you surround yourself with will be the conduit to your overall success in business; they should provide the energy and power that enables your business success and profits.
Keep Your HVAC Company Agile
- Outsource the things you can.
- Automate when possible.
- Cross-train employees.
- As for yourself, this question; “will it enable me to generate profits and revenue?” if the answer isn’t YES, don’t get it.
- Keep overhead low without sacrificing customer experience or quality.
It’s easier to acquire more costs than it will be to shed those costs. Always strive to position your company to run lean but strong. Don’t allow unnecessary overhead to overburden your business’s “profitability.” For instance, take a wagon train; you’ll want more horses than wagons in your wagon train.
Keep Growing and Changing
- Keep in touch with what’s new in the HVAC market and adapt as needed to changes.
- Never stop learning.
- Don’t stop asking questions.
- Learn and grow from mistakes.
- Be an industry leader by challenging assumptions.
- Experiment with new products, processes, and ideas.
When it comes to profit-making, never assume. When you get lazy in learning, content with the status quo, stubborn about changes, or you take “profitability” for granted, profits can easily begin to slip. If you stop growing and lose focus, profits can be fleeting moments that quickly slip away.
Share Your Success
- Make sure your life has balance.
- Say “thank you” often and mean it.
- Offer profit sharing for your employees.
- Give back to your community.
Don’t be greedy; watch your “profitability” skyrocket when you give to those around you.
Always give more than Promised
- Handle problems quickly.
- Always follow-up.
- Keep your promises.
Your actions and words can either increase or decrease your business’s “Profit Ability”!