Thanks For The Tip
Best of all, people in the audience embellished many of the tips with similar or alternative ideas. In this way, people got to discuss what works and what doesn’t with colleagues from all over the country. We had fun doing it, and everyone went away with their heads churning.
This is the fourth year in a row we have presented “Thanks for the Tip” at the PHCC convention. We wish to acknowledge the vendor company sponsors who not only contributed most of the money we gave away, but who also took part in the idea exchanges. They were: Titeflex; Copper Development Association; Gerber Plumbing Fixtures; Halsey Taylor; and Burnham Corp.
Here are some of the top business tips that came out of this year’s session.
CO detection sells. “We have found that the use of a digital read-out carbon monoxide detector can make sales and save lives,” said Paul Nebrasky (Paul Nebrasky Plumbing & Heating, Monroe, NY). Paul claims that his is the only company in his market to equip each service truck with this device.
Service technicians are instructed to do a complete CO evaluation with every invoice—at the stack level, jacket level and room levels. Often CO is detected within acceptable limits, a sign that the system is not running effectively. Sometimes the customer will opt for an equipment replacement at this point.
When higher, dangerous levels are detected, they shut the equipment down and usually replace it. “It’s almost a guaranteed sale,” said Nebrasky. On rare occasions a customer may want a second opinion, in which case they are invited to call the gas company to check it out. When high CO is verified—as it almost always is—Nebrasky usually gets called back to do the equipment replacement.
According to Nebrasky, he also picks up many leads from the gas company. Though they are obligated not to recommend any particular company, anyone suspicious of elevated CO often gets told that Nebrasky’s is the only firm in town with a CO detector on every truck. The devices pay for themselves, he says.
PHC Profit Report comments — It is time for a great consumer awakening about the problem of carbon monoxide poisoning. Official statistics about CO-related deaths and illnesses show only the tip of the iceberg, because symptoms are often mis-diagnosed as flu or other ailments. Health professionals are just beginning to understand the true dimensions of this problem, and our industry is in the forefront of any possible solutions.
“Plumbing by ...” Many of you know the value of doing business under a pseudonym such as “AAA-Aardvark Plumbing Co.,” which allows you to leapfrog to the front of the Yellow Pages listings. Randy Hilton of Roto Rooter Plumbers, Fort Worth, TX, gets similar mileage out of a corporate name beginning with “Plumbing by ...”. According to Hilton, people moving into a new home often discover plumbing problems. Not knowing anyone, they often will call directory assistance for a plumbing company, and the operator tends to look up “Plumbing” in the White Pages. Tracking this with a separate phone line, Hilton says he gets 5-6 calls a week using this gambit in a market of about 1 million population.
Incentives for dispatchers. Connie Buckingham of Southwest Plumbing & Water Heaters in Seattle, WA, told of an incentive program developed for company dispatchers. They receive bonus pay tied to sales for the month. “This seems to provide the incentive for them to route the techs more efficiently, so they can get more calls dispatched and done,” she explained. “Sales have skyrocketed.”
Hiring bonuses. Connie’s husband Bill Buckingham talked of another bonus plan implemented with great success by their company. They offer $1,000 extra for plumbers and $2,000 for those with both plumbing and heating experience. Half gets paid after three months, with the final installment due after the person stays six months with the company. Bill said that the program has generated many more inquiries from quality people than normal classified ads. The bonus helps pay for itself by reducing the amount of advertising they need to run to attract qualified help.
Squeezing for dollars. Tim McGuire of McGuire & Sons Plumbing-Heating-Cooling in Minneapolis, MN, shared two superb ideas for generating extra profit dollars.
First, is to lower worker compensation rates by more accurately tracking technician time. The rate for plumbers being substantially higher than for drivers, McGuire instructs his service technicians to closely record their dispatch and arrival times throughout the day. During those hours, they are categorized for worker comp purposes as truck drivers rather than plumbers. (This needs to be approved by your insurance company, of course, but if they decline to differentiate, it may be time to go insurance shopping.) McGuire has saved thousands of dollars per man with this system.
Another keen idea from McGuire is that of paying service techs an incentive bonus for reaching billable hour efficiency. For example, the breakeven rate in their company for labor billing is based on technicians being 75% efficient—billing three hours out of every four spent on the job. They pay a $3 bonus for every billable hour brought in over 75% and $5 for billable hours if technicians maintain 85% efficiency. Hustling service techs can earn an additional $272 a week, while McGuire realizes 4 extra hours of labor a week sold at retail. All of this “without adding a truck or technician,” he reminded us.
PHC Profit Report comments — McGuire’s tips are great ways to squeeze extra profits out of thin air. However, they presuppose that a company has a handle on its business the way McGuire does in tracking billable and non-billable hours, such as drive time. This points to the importance of numbers crunching in running any kind of business. Unfortunately, we doubt that one PHC company out of 10 keeps such close tabs on its business.
Sticking to business. Any good service contractor knows that the surest and least expensive way to generate repeat business is to leave company stickers on newly installed or serviced equipment. But service techs grow lax in doing this and you have to constantly remind them of their responsibility. Steve Carder of Carder Plumbing Co. in Tulsa, OK, came up with a neat incentive plan to boost compliance. He has service techs write their name, appliance or location and service ticket number on the paper backing of the sticker. The backings then get collected in a box for a quarterly drawing, the prize usually being something substantive such as a cordless power tool. “Our percentage of stickers placed has gone up 300%!” said Carder. “This can be verified by a simple phone call to the customer if necessary. It works for everybody!”
Kiddie marketing. TV’s Saturday morning cartoon shows are notorious for advertising toys and breakfast cereals not to the actual buyers, but to youngsters who then pester Mom and Dad for the objects of their desire. Joe Rasher (Rasher Plumbing & Heating, St. Paul, MN) came up with a twist on this concept. He buys “sipper cups” for toddlers with his company’s name, number and logo on them, which he distributes to child care facilities and residences. The cups end up going home to busy two-income households and the name is always in front of them.
Cleanout labels. Kathy Thaut, with K&M Plumbing Service in University Place, WA, reported: “We had customers who would remove the plug on the cleanout that was usually behind the washer and dryer, sometimes breaking it off. So we created and had printed these labels” (which looked something like this ...) The stickers were in bright iridescent orange, making them stand out in a dark basement. PHC Profit Report comments — Not a bad idea, but we would suggest putting the company name and phone number on the sticker as well.
Cable TV ads. Scott Ziegler (Ray A. Shaffer, Inc., Schwenksville, PA) is one of those progressive contractors who has discovered cable TV advertising as an effective and affordable marketing tool. His company produced a series of TV commercials—one of which was shown at “Thanks for the Tip”—that begin with consumer tips, such as how to shut off the main water valve or change air filters. The overriding theme is that these are simple things you can do yourself, but if you run into trouble with more complicated tasks, give us a call. PHC Profit Report comments — One of the things that captivated us in viewing their commercial is that it has the “feel” at the beginning of a public service announcement. It draws one’s attention in a way that so many hokey TV spots do not. TV is the most powerful advertising medium, but the quality of a TV commercial still has a lot to do with how well it works.
Follow-up calls. Patricia Damon (Damon’s Plumbing-Heating-Cooling, Dover, PA) drew attention to a business practice that isn’t exactly original, but also is hardly universal in the PHC service industry. She talked of the importance of making follow-up phone calls after a service call to make sure customers are happy. “If there’s a problem, you’re not going to hear it from the service tech,” Patricia noted. Not only is it a way to check up on them, but also conveys a psychologically uplifting message to customers that yours is a company that really cares.
PHC Profit Report comments — Many service contractors get complacent by distributing customer comment cards, thinking this provides adequate feedback. Almost everyone who does this finds that more than 90% of those returned contain favorable reviews of service performance. This is misleading. Market research professionals know that satisfied customers respond at a much greater rate to voluntary surveys than do disgruntled ones. People will be more forthright in a phone call than on a comment card, and you will hear from a much higher percentage of them. Yes, it takes more time and effort, but this is a terrific customer service tool.
Phone cards. Dan Bergstrom (Bergstrom’s, Inc., Livonia, MI) gives away free phone cards for an in-house estimate on new and replacement furnaces. The multi-color cards are custom-made with Bergstrom’s logo and and mission statement. On the back are lead-ins to the Bergstrom Internet page. The cards give recipients 10 minutes of free phone service. Even though they cost Bergstrom less than $2 apiece, the perceived value is much higher than that in the minds of the people who receive them.
Please release me! Ida Buffat of Buffat Plumbing, Louisville, KY, tries to take no chances in today’s litigious society. New hires to her 4th generation family business sign release forms that give the company permission to look up their driver’s license record, to inspect their worker’s compensation claim history, and to take a Hepatitis B vaccination required by law in Buffat’s area, in case there is some subsequent adverse reaction to the vaccine. (“I am taking this injection at my own risk and request, and will not hold Buffat Plumbing responsible during my lifetime or my heirs’ lifetime.”) These forms were drawn up with help from the firm’s insurance company and attorney. Ida admitted that there’s no guarantee they’d stand up to a court challenge, but at least they create a bit of a disincentive against frivolous lawsuits. She also showed a company policy book produced through Kinko’s at a miserly $6.13 apiece. Ida’s point here was that even if you have a small company like theirs (5 service trucks), it is still a good idea to have a company policy manual.
Tracking commodity vendors. Arnold Rodio (Pace Setter Plumbing, Lancaster, CA) noted that many products are ordered generically, such as pipe. If that product turns out to be defective, it is difficult to prove who shipped it, especially when you use multiple suppliers. So Arnold recommended putting the manufacturer’s name on your invoice when you check in the shipment.
Stocking up. It doesn’t make much sense to stand at a supermarket checkout line only for a carton of milk. Same principle applies to a tip submitted by Brad Piesco of Roto-Rooter Services in Stoughton, MA. He offered that if a service tech needs to stop by a supply house for any part, have him pick up all the stock for the job. “Don’t use part of the stock from the truck and part from the supply house for the job.” This will conserve inventory and delay replenishment.
Mirror power. Robert Moy of R.L. Moy Plumbing & Heating in Philadelphia carries a compact mirror among his tools. He uses it to create a strong light beam—preferably using sunlight rather than artificial—when peering down vents and into ceiling areas.
Join the Chamber. Dan Hennessey (Hennessey Plumbing Services, Milford, CT) noted that when a business moves into an area, they often will call the local Chamber of Commerce to recommend building contractors. So join your local Chamber.
Reprinted from the December 1997 issue of the PHCProfit Report. For subscription information call 800/837-8337.