Last month, Plumbing & Mechanical interviewed Greg Niemi, president and CEO of Nexstar Network, on the issues facing his organization’s members and other service contractors. Niemi has led the business development group for more than 10 years and has announced he will step down in November. Under his leadership, Nexstar has achieved the highest level of membership, member retention and satisfaction in its history. He worked at Trane Co. for 21 years before coming to Nexstar.
PM: What are the hot-button issues facing Nexstar members in 2011?
GN: The biggest hot button is perspective. The glass is half full. There’s no denying the recession of 2007 to 2009, and current events continue to drag. But 2011 is a breakthrough year to see the possibilities. If you’re a contractor, set your sights on new opportunities. What are you doing to expand?
After perspective, then the whole focus is on the consumer and how we position ourselves to be the preferred provider in the home. People are staying in their existing homes longer. They’re loosening their wallets now. That’s why today’s offerings have to be timely and relevant. Energy efficiency and comfort are as important as always.
The labor shortage will be another hot-button topic as the economy recovers. So, we have to be the best contractors to attract the best people.
PM: How does Nexstar help its members address these issues?
GN: It’s the power of the Nexstar Network and people willing to share. We have 400-plus members networking together peer to peer. For example, our members and business coaches exchange best practices every day on our online bulletin board.
As an organization, we’re always redeveloping our systems and training for marketing, Internet capabilities and line extensions into areas such as tankless water heaters and solar heating. We do a lot of online learning to help reduce the training cost. We have mobile apps in development. Our Owner Spotlight Series meetings and Super Meetings give us the opportunity to bring in speakers who give us outside perspectives.
In a nutshell, it’s the power of the Network first, and then it goes to systems and training.
PM: Is membership in a best practices group such as Nexstar more important during a recession or a recovery?
GN: Yes. We learn from each other regardless of the business cycle we’re in - expansion or contraction. I can’t think of one being better than the other as far as the value of being a member. A recession heightens need; a recovery is dependent on your mindset.
PM: What leadership qualities will Nexstar members need going forward?
GN: My answer lies within your question. It’s all about leadership. Everything starts with the owner or person at the top. You need to be tenacious to succeed. Good candidates for Nexstar are being driven despite the challenges in today’s economy.
There are plenty of reasons not to succeed. All leaders are about improving business results. True managers are engaged and excited.
I believe in people and what I call the inside-out approach. Bringing on new talent always brings new opportunities. They have new skills and values. You never know how many opportunities will open up when you bring on new talent.
PM: If you had only one message to give to plumbing contractors who are not Nexstar members, what would it be?
GN: Stay plugged in. Do not go it alone. There are so many organizations around willing to help you. Those who stay involved in business groups experience greater success whether it’s a local business group, Nexstar or a trade association. You just can’t be on an island. Our business is to improve the business of our member companies. We do this through peer connections, great business coaches and all the Nexstar systems.
But it really starts by getting involved. Whether it’s industry-connected or not, don’t go it alone.
I have to add that I’m so proud of contractors. They are the salt of the earth. They are good-intentioned people because they like to take care of people. Their purpose is to take care of the health and welfare of the nation. Everyone deserves a great plumber, HVAC contractor and electrician.
PM: Can you identify the top two or three changes Nexstar members have experienced during your decade at the helm?
GN: The first thing I think about for Nexstar members and our industry is that it’s been a marvelous journey. Nexstar has grown as our members have grown. We’ve added offerings and added new members. It’s outstanding to see the profound impact we’ve made on people’s lives and my own. I’m thankful to our founders for their vision and dedication, our members, partners and talented staff.
The top changes are these:
First, we’re much more sophisticated today in business acumen. Nextar members and the industry, too, measure and track their numbers. They know their numbers operationally and financially. Nexstar members outpace the marketplace because we track our numbers and we’re running our businesses better.
Marketing goes in this bucket, too, and so does technology. This includes shoe covers, red carpets and our much-improved service processes, such as graphics on trucks and being there for customers. Our members’ websites today are real with useful information for consumers. Other changes in technology are Internet marketing, social media and all the in-the-field technologies - from the wide use of cell phones to GPS to PDAs. Mobile apps are the hottest thing going today, and Nexstar members are on the leading edge.
Another change is that upfront pricing is now commonplace. Upfront pricing used to be a small minority of the industry, less than 10 percent. Today, 10 years later, the majority of service, repair and replacement companies use it. Nexstar has been the leader to set that trend.
PM: What will Nexstar members have to do to remain in the forefront of the service industry during the next 10 years?
GN: Our members and our organization are inextricably tied together because we’re membership-owned. It’s our stated mission to be the No. 1 provider of business solutions for plumbing, heating/cooling and electrical contractors. That’s what we always strive for.
With that, No. 1 doesn’t mean the largest. It means quality vs. quantity; the best contractors belonging to the best business development group. The repositioning of products and services for our members is Nexstar’s history. We’re always re-inventing things. The more we can simplify things, the more successful we are.
We want to make it simple for our members to expand their business. Today, we’re in the very early stages of developing a knowledge-based program to access best practices in a very virtual sense for expanding members' businesses. In the past, this type of learning was text-based. Now we can use YouTube so you can see everything. We’ll use all the technologies that exist today such as the Internet and PDAs.
PM: How important is it for Nexstar members to position themselves as “green” experts for their customers?
GN: Very important. Nexstar members and our industry as a whole are in the forefront on this. Green buildings, sustainability, conservation and energy efficiency have always been important to this industry - and always will be - because we live in a world of precious natural resources. I like to think our industry was green before green was cool.
We saw more emerging interest in green products leading up to the recession; in the recession, this took a second seat. People became more cost-conscious. That can be a plus or minus with green products, which sometimes are perceived as having a higher cost. But green products also will have a payback with higher efficiency and lower utility bills.
If you’re a service contractor, green needs to be part of your business positioning for you to be timely and relevant.
PM: Are contractor best practices groups such as Nexstar competitive or complementary to trade associations such as PHCC?
GN: Absolutely complementary. We encourage our Nexstar members to belong to the Plumbing-Heating-Cooling Contractors and Air Conditioning Contractors of America. It’s very common for Nexstar members to be very active in state and local chapters, even in leadership positions. We encourage new members to join PHCC and ACCA. It’s crazy not to belong to an association that represents your industry. We do have common offerings, that’s for sure. But we play in different niches.
PM: What are the ideal characteristics of a service company that would benefit from being a Nexstar member?
GN: Progressive; hungry; an insatiable thirst to learn; committed to being the best, if not the biggest; clear background, ethical, good values; a desire to remain independent; and a desire to build its brand rather than another’s.
The ideal company would be predominantly residential service, or desires to be, with a capacity to implement. If you’re still behind the steering wheel, it’s difficult to implement. Ideally, a company with seven to 10 trucks is our sweet spot where we could help. Nexstar members range from $1 million to $30 million-plus.
(For more information on Nexstar Network, go to www.nexstarnetwork.com or call 888/240-STAR.)