< Previous20 APRIL 2019HIGH-PERFORMANCE HVAC TODAYabout the number of leads, or their cost, or the job selling price. Among other things, your immedi-ate focus is on ordering materials, staging the job, getting it installed, and collecting the money.Wait! Your purpose is to make a profit, right? Doesn’t the cost of the lead, the sales close rate, average job selling price, number of estimated la-bor hours, material costs, and other factors con-tribute to the amount of profit you produce? And won’t improving all of these have a positive im-pact on your bottom line? Absolutely. So, measuring these sales-related variables will help you determine where you are doing well and where you are not, so you can take the necessary steps to maximize profitability.WHAT TO MEASURE?Here are seven key measurements that are es-sential: each is compared to its goal or target. Also, each measurement delivers a management message worth listening to.1. Annual sales: $1.5 million for a full-time comfort advisor. Annual sales should be broken down to monthly and weekly targets, based on historical data2. First call close rate: 15-25% is what you should expect, depending on selling skills, lead sources, and customer urgencyHave you ever thought about “measure-ment?” I can’t think of anything that isn’t measured. How often do we ask ourselves questions that begin with, “how many,” “how much,” “how long,” or “how far?” Measuring is natural and it’s done for some very good reasons. Let’s look at measuring as it applies to sales performance and what the bene-fits could be to you and your company.WHY MEASURE SALES PERFORMANCE?Every thing and every person in your compa-ny has a purpose that ultimately should produce a profit. There are optimal ways to perform ev-ery task and your day is consumed with correct-ing things that aren’t going in the right direction. As long as sales are coming in you don’t worry The Art of Measuring Sales PerformanceBy Tom PiscitelliSALESNCI’S WELL-KNOWN TAGLINE, IF YOU DON’T MEASURE, YOU’RE JUST GUESSING!™ HAS RECEIVED THE ATTENTION IT DESERVES, SERVING TO BOTH INSTRUCT AND DEMAND A HIGHER LEVEL OF PROFESSIONALISM ON THE TECHNICAL SIDE OF THE HVAC INDUSTRY. THE ART AND SCIENCE OF MEASURING ALSO APPLIES TO YOUR COMFORT ADVISORS’ SALES PERFORMANCE. HERE’S HOW.APRIL 2019 21HVACTODAY.COMquired to pay a sales commission, cov-er marketing, other overhead expens-es, and produce a 10-15% net profit7. Gross profit per man day: $2,000 or more. Determine the monthly overhead cost plus desired monthly net profit. Then divide that by the total net man-days of labor available to create the target. The se-cret to success is in selling the value of higher-end solutions, not just tight la-bor and materials cost management.COMPARE RESULTS … TAKE ACTIONIt’s easy to set these targets. It’s an-other thing to set up a tracking sys-tem to record and analyze the data. Many of today’s business manage-ment software providers, such as ServiceTitan, FieldEdge, or TRUST PRO, come ready-built to record leads and track sales results. If such software is not available, you can create a spreadsheet and your sales coordinator can manually enter the data and create the reports. Re-gardless, reviewing the data as often as daily will give you the information you need to immediately recognize when things are going well, and when you need to take corrective action. 3. Follow-up close rate: Should be between 20-30%. This depends on how well the agreement was be-tween the sales person and custom-er for follow up, how effectively your salesperson adapted to the customer’s buying style, and how appropriately persistent the salesperson was4. Average job selling price: This depends on your market area, but on average you should expect between $12-15,000 for a complete system re-placement, including ductwork up-grades. Replacing the entire duct sys-tem can add even more -- between $6-8,0005. Revenue per lead: $5-6,000 depending on the average job selling price and close rate6. Gross profit margin: 55% is re-SALESall caught up, this is the perfect time to send out a direct-mail post card offer-ing a Precision Tune-Up Special. Or my favorite, if you have been fol-lowing NCI guidelines, this is the per-fect time to send a letter to your ser-vice and maintenance customers with equipment more than 10 years old and high static pressure readings.MEASURING FINDS IMPROVEMENT OPPORTUNITIESOften your measurements are on track, but you know you can do better. Let’s say your sales results are right on plan and you’re headed toward a suc-cessful year. If you have several comfort advi-sors, you can compare their individu-al results. If their revenue-per-sale re-sults are similar, but one has a higher close-rate accompanied with a lower average job price, then there could be an opportunity with that comfort ad-visor to change her proposal strategy and produce higher sales. It’s not uncommon for comfort advi-sors to fall into mindset patterns, be-lieving they have figured out the sweet spot where a certain product mix at a certain price will sell more effectively. This cannot be true as all customers and all homes are unique, but the comfort advisor has convinced herself it’s true, nonetheless. You can discuss this with her and encourage (require) her to get back to offering a “best” full-system ap-proach, using the discov-ery and measurement techniques she has been trained to do. She can then show the custom-er the benefits of solving The first problem to solve is the comfort advisors’ attitudes. They have bought in to all of these “excus-es” for not closing sales. They need some timely resources and encour-agement to help make sales. This will turn their attitudes around. The lower close rate indicates a lack of urgency among customers. At this time of year, it’s common for home-owners to choose to repair vs. replace. The lower average job selling price indicates your comfort advisors drop-ping prices or selling the low-er end, a reactionary decision when they believe homeowners are looking for lower prices.When sales are slow, retail business-es promote Zero Percent, 60-Months financing to overcome objections about waiting. When tech leads slow down, you can review Repair Vs. Re-place strategies with your technicians, and maybe double their spiff for 30 days on all sales leads that sell. With your service department being For example, it’s January and your revenue-per-lead is plummeting. Your sales report shows that your close rate dropped 10 points and your average job declined by more than $1,500. This is alarming and is worthy of im-mediate attention. So you call a sales meeting and your comfort advisors point their fingers at the lead sources, all coming from online bid services. Or they blame price-shopper customers, the relatively mild weather, the econo-my, and lead-setters who schedule all ‘single-leggers.’ Sound familiar? TYPES OF ACTIONIt’s true that your technician leads have all but dried up by now, and it’s true that internet bid sourc-es tend to attract price-shoppers, and the weather is mild, the econo-my is sketchy, and getting both “de-cision-makers” to commit to a two-hour sales call is tough at any time. It’s January, and this has happened before. It will happen again. HIGH-PERFORMANCE HVAC TODAY22 APRIL 2019APRIL 2019 23HVACTODAY.COMit can also provide recognition and be the basis for reward.People appreciate and value being sincerely recognized. Money as a re-ward mechanism is a distant second to recognition. Measure and post your sales results and you will find your top performers will work hard to stay there, and others will work even hard-er to measure up with the best. SIX-STEP PERFORMANCE MEASURING ACTION PLAN z Establish appropriate performance measurements and goals z Assign someone to keep the results up to date zPost publicly zReward outstanding performance z Privately coach for improved per-fundamental design and installation problems uncovered. Getting your comfort advisor back on track will prove to her that she’s making an as-sumption that’s not valid and produc-ing less as a result.MEASURE FOR FUN AND REWARDWhat I do for a living isn’t work…it’s fun. It’s fun because I enjoy help-ing motivated people create im-proved results. I love it that my train-ing graduates routinely sell jobs for $12-$15,000 or more, that over 20% of my newsletter articles are opened and read, and that over 90% of those attending my speaking events find the content highly-valuable. Measuring provides feedback that can stimulate the need for change, and formance when needed z Commit to leading and managing your business intentionally, es-tablishing goals, defining expecta-tions, and create a culture where your team members are expected to create outstanding results.Create a fabulous 2019, no matter what the weather and economy have in store for you! Tom Piscitelli has over 40 years’ experience in HVAC sales, sales management, marketing and consulting. His articles have been pub-lished in trade magazines, he often speaks at industry events, he has produced three HVAC sales training DVD’s. He particularly enjoys bringing cutting edge training approaches to our industry. Visit www.sellingtrust.com.24 APRIL 2019HIGH-PERFORMANCE HVAC TODAYGROWING PAINSWhen looking back at the first time I added system temperature measurement to my perfor-mance testing, I experienced some major grow-ing pains. I only had two psychrometers. Try-ing to accomplish a system temperature test with just those instruments was hard, to say the least. It added 45 minutes to the testing I was already performing.In those days, my temperature testing started at the grills where I measured dry bulb and wet bulb temperatures. Then I had to run over to the three supply registers. Next, I’d go back over to the return grilles, one more time, to make sure the temperature didn’t change. Keep in mind, I was trying to perform this test in a timely manner. In quite a few cases, it led to inaccurate calculations because of the tempera-ture changing every couple of minutes.So why did I only have two psychrometers? I think we can all agree that during perfor-mance testing, some measurements are easier to do than others. When it comes to testing, we have to figure out if the juice is worth the squeeze. System temperature measurement can eat up a lot of time on the job and cause you to question its value. System temperatures help you calculate duct system heat gain and loss, and help pinpoint is-sues like lack of insulation and duct leakage. When you add system airflow to them, you can calculate delivered Btus into the occupied space.The number of tests needed for reliable average return grille and supply register temperatures re-quire a minimum of five accurate measurements. As Performance-Based contractors, we need to select test instruments that are accurate. Before purchasing an instrument, always consider the following three different factors … Quality, Accu-racy, and Warranty. System Temperature Testing: Use the Right InstrumentsBy Casey ContrerasTECHNICALAPRIL 2019 25HVACTODAY.COMGETTING SMARTERWhen I finally had enough, I trashed those old psychrometers and upgrad-ed to five Fieldpiece single-wand psy-chrometers with an HG3 data logger. All five psychrometers could commu-nicate to one handheld device (which was great). No more running around customers’ houses like a mad man try-ing to quickly collect temperatures. However, I still felt the time sav-ings could improve because of how much time it took to set up the instru-ments. I had to sync all five probes to the data logger, then figure out how to secure the probes to the registers and grilles. When it came to docu-menting the measurements, I had to physically go over to each instrument and switch them from dry bulb to wet bulb temperature. Still, this was much better than how I used to do it. The price for the above set was still expensive for me -- I can still remem-ber the chewing out I got from my wife! However, I gained the quality, accura-cy, and better warranty I needed and wanted from these instruments. Bottom line, I could gather all my Because I had to work with what I had at that time and what fit my budget as a technician. Furthermore, in those days the quality of instruments was not great. I felt that if I sneezed, they would break! Seriously, the instruments were not built for technicians in the field and the warranties on them weren’t the best. Every time I sent my instru-ments back for issues, it always came at a cost.Eventually, some instrument manu-facturers developed better quality op-tions, based on technician feedback. The best news: these newer, better instruments were less expensive and were rugged (meaning they wouldn’t self-destruct when dropped). DO YOURSELF A FAVOR AND RESEARCH THE LATEST DEVICES ON THE MARKET. YOU WILL BE GLAD YOU DID!26 APRIL 2019HIGH-PERFORMANCE HVAC TODAYsecond device to display all the measurements at once). These instruments are perfect for both residential and commer-cial work. The price can be spot on for anyone in any stage of their ca-reer. The Fieldpiece product costs around $500 for a set of five – al-most a 70% savings from the origi-nal set I used. Each probe will dis-play dry bulb temperature, wet bulb temperature, relative humidity, dewpoint, and enthalpy. The time to gather system tempera-tures is now about 15 minutes – you can’t beat that!So, if you questioned adding sys-tem temperatures to your testing or just want to find the right instru-ments to save more time while testing, do yourself a favor and research the latest devices in the mar-ket. You will be glad you did and skip the headaches I encountered along the way! temperature measurements at one time and if dropped, the instrument kept working. Best of all, if I had any issues with it, the manufacturer took care of it.IT KEEPS GETTING BETTERThe good news is that instrument manufacturers keep getting better and their options keep improving. In my case, Fieldpiece recently released up-graded psychrometer probes with a flexible wand and magnet. Now I don’t have to be creative securing the probe to registers and grilles. Other manu-facturers products do similar things.Some of the best features of modern instruments are they sync with smart-phones, and some have a 360-degree range (you no longer need to buy a TECHNICALCasey Contreras is a field coach for NCI. He is based in Southern California, where he works alongside southern California Edison’s Quality installation contractors. He has 10 years of residential, light commercial installation, and service experience. He can be reached at CaseyC@ncihvac.com.APRIL 2019 27HVACTODAY.COMHenry Ford allegedly once said, “The only thing worse than training your employees and having them leave is not training them and having them stay.” This statement, which I always attributed to HVAC Consultant Vicki LaPlant, will never lose its relevance. In his October 29, 2018 Harvard Business Review article, Ron Carucci cites a 2017 Train-ing Industry Report (ncilink.com/Trainin-gRpt) that says U.S. companies increased their training and employee development by a whop-ping 32.5% in 2017!He also said that many experts emphasize the importance of employee development, citing the following benefits: zA more competitive workforce zIncreased employee loyalty and retention zHigher employee engagement zFlexibility in the marketplace. In the High-Performance HVAC Industry, many owners and managers are downright fo-cused on training and they invest heavily in both their field service and installation crews as well as their office and warehouse teams.All the contractors we spoke to say that in an effort to stay abreast of changes in technology, tools, and instruments, they are driven to train their teammates continuously.Here are some thoughts on why four con-tractors put their money where their mouth is when it comes to training and how that im-pacts the success of their Performance-Based Contracting™ firms.THE ‘WHY’ OF TRAININGBobby Bevill is the service manager for Davis Services, Inc. in Spartanburg, SC. This 46-year-old, $15 million HVAC and plumbing company operates in an area that really only has one season – cooling. When the weather is hot, area contractors get burn-out busy, make lots of money, and have to hope that tides them over when outdoor temperatures cool off and become more comfortable.At least, according to Bevill, that is how it used to be for Davis Services before they changed their focus to becoming a Performance-Based Con-tracting™ firm.“With 29 HVAC service technicians and 12 in-stallers, it’s just not smart to send them out to work in peoples’ homes if they don’t know what they are doing,” he says. “With the investment we make in technical training, we do airflow tests all the time, even during our busiest months. We can’t always do the additional work right then, but we can go back when things slow down, to do further test-ing that often results in duct renovations as well as replacement and accessory sales,” he says. “We sell lots of renovations and replacements when our competition is begging for work.”For Troy Jansen, general manager of Jan-sen’s Heating and Air in Effingham, IL, his par-ents (Tom and Cindy Jansen) have always promot-ed training to set them apart from competitors.Troy, who has worked in the business since 2006 says, “Training enables our technicians and our company to out-perform most of our compet-itors. They just aren’t training at the level we are, and very rarely do we hire techs away from them. We prefer to grow ours from the ground up. We haven’t hired anyone with experience in the past five years.”This $4.2 million gross sales company sets aside between two and five percent of their revenues for training – including a large investment in their own training center combined with outside train-ing organization affiliations. The ‘why’ for Wighton’s Heating and Air The Training Investment: Why Keep Employees Sharp?By Mike WeilTRAINING“TRAINING ENABLES OUR TECHNICIANS AND OUR COMPANY TO OUT-PERFORM MOST OF OUR COMPETITORS.”– TROY JANSEN28 APRIL 2019HIGH-PERFORMANCE HVAC TODAYTRAININGwouldn’t have been able to keep their people busy and would have had to lay them off or worse.WHAT TYPE OF TRAINING IS BEST?To really provide meaningful train-ing in this area requires more than just a classroom setting – it requires a lot of hands-on experience as well. This is what Ric Schorer says is key to success.For Wighton’s Heating and Air Con-ditioning, it also means the tech needs to be open to learning new things and relearning things they think they know.He says the key to his company’s program is to ensure their field team is proficient in the use of tools to mea-sure, read wiring diagrams, then in-terpret this information on function-ing equipment (in the presence of their peers). They conduct this type of training weekly.Masterworks also conducts weekly, in-house training to go over all aspects of the products and services they offer. “But we also invest in professional training such as that provided by the National Comfort Institute (NCI),” Vic Updike says. Both Bobby Bevill and Troy Jansen are big believers in bringing outside ex-perts into their companies as well. MANAGEMENT IS KEY IN A COMPANY THAT TRAINSJansen says their company manage-ment team is very closely involved in Conditioning revolves around what President Ric Schorer calls his three foundational pillars for suc-cess: Recruitment, Marketing, and Training.“Assuming your written process-es are in place and you have hired the right person,” Schorer says, “I believe that without consistent training, you will fail your employee and they will either quit or execute their responsi-bilities very poorly.”Schorer, whose San Luis Obispo, CA-based company invests a mini-mum of 150 hours of training per em-ployee, puts together a 12-month cal-endar and posts it in their training lab. He says their technicians know exact-ly what is expected of them and they are engaged in enhancing their careers and serving their customers best.TRAINING PAYOFFSAt Masterworks Mechanical, owner and president Vic Up-dike agrees. He says “Our team has an untrainable dedication to Mas-terworks’ image and our customers’ well-being. It comes from the culture, the family approach to management, and empowerment. And others see this and find it attractive as a place for them to work too.”The Craig, Colorado-based residen-tial and commercial contracting firm employs 27 co-workers and dedicates up to two percent of their annual gross budget on training. “We measure everything,” he ex-plains, “Before and after every job. Our technicians do airflow and com-bustion tests which provide us the numbers we need to prove our solu-tion worked. No one else in our area does that. We can offer products and services nobody can compete with and we can name our price.”The winners here really are every-one: the customers get comfort, en-ergy efficiency, health, and safety is-sues resolved; distributors see fewer callbacks and warranty issues, and the contractor grows profits and markets as a result.“Training is immediately translat-ed into the field, enhancing our tech-nicians’ skills and performance as well as benefitting our customers,” says Bobby Bevill of Davis Services. “It helps our people feel confident in what they’re doing.”In fact, he says that Air Upgrades are now a large part of everything they do. “We quote them on every single job,” Bevill says.The direct result: growth. And that means they need to always look for more people.Another direct benefit is that by training, especially in High-Perfor-mance Contracting, contractors can and do smooth out the hills and val-leys of weather and season that can impact an HVAC company. In fact, Bevill mentions that in the past, during “slow years,” if it weren’t for their training regimen, they APRIL 2019 29HVACTODAY.COMveloped skill or a knowledge deficit. For those situations, a well-designed program with customized content, rel-evant material, skill-building practice, and a final measurement of skill ac-quisition works great.”He adds that “Learning is a conse-quence of thinking, not teaching. It happens when people reflect on and choose a new behavior. Bobby Bevill concludes that training must be part of a company’s culture. He says “Our guys know they will al-ways be learning new things. And they expect that. They see the training we provide helps them to solve issues most of the competition can’t. They get lots of positive feedback from customers. “Which is why it’s our mission to send them into the field well trained.” continuous training. We just don’t train once and hope it sticks. We train and retrain until the tech knows their stuff better than anyone else in our area.”Ric Schorer says that Wighton’s training is “driven by our ability to measure the performance of the en-tire system, to be able to describe why the system doesn’t function to custom-er expectations, then provide options and choices so customers can buy what they need immediately, and schedule what they want down the road.”TRAIN FOR THE RIGHT REASONSGoing back to that Harvard Busi-ness Review article, author Carucci says, “Training can be a powerful me-dium when there is proof that the root cause of the learning need is an unde-their training strategy. They always make sure that at least one member of the management team is involved.“We do this so we can not only keep up with what the team is learning, but equally as important, we can make sure what they learn is properly im-plemented in our daily culture. We do this through rigorous and contin-uous in-house sessions to keep what they learned at the forefront of their minds. It’s our job to come up with the training plan, implement it, and keep it rolling forward,” he adds.Bobby Bevill says that the manage-ment team at Davis Services works hard to make training a key part of their culture. He says the results speak for themselves. “The key is for your culture to include Next >