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How to Become a Master at Sales, KPIS, and COVID Strategies With HVAC Owner, Louis Bruno | Coronavirus Update May 21st

How to Become a Master at Sales, KPIS, and COVID Strategies With HVAC Owner, Louis Bruno | Coronavirus Update May 21st

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Posted by Ian H., CEO

May 22, 2020

May 21, 2020 update quick update

The

is reporting 5,075,181 global cases with 331,103 lives lost and 1,936,331 recovered.  

In the US we are at over 1.57 million US cases and 94,566 deaths with 298,418 recovered as of 2:32pm on May 21. 

In the US, more than 35,000 deaths linked to Covid-19 have occurred at long-term care facilities, according to new data published from the Kaiser Family Foundation. New York and New Jersey alone make up nearly one-third of the 35,118 total Covid-19 deaths reported in long-term care facilities, according to the new data.

NO MORE RELIEF

In Washington DC, Senate Majority Leader Mitch McConnell adjourned the Senate today without passing changes to the Paycheck Protection Program. There had been proposals that would have given businesses more time to use the PPP money amid the coronavirus pandemic. 

COVID-19 ALERT LEVELS

 

An organization called Resolve to Save Lives released a

. As many of us are confused as to the level of risk in our communities, a color-coded system could provide guidance and recommended levels of precautions when used by cities and counties. 

Dr. Tom Frieden, former director of the US CDC, said this system would be similar to those that are used for things like wildfire risk levels or ocean hazard flags on beaches. This system includes four levels ranging from “new normal” (green) to “high alert,” (red). 

A color-coded alert system is something that many believe will make it easier for us as individuals to make decisions about what sort of activities to participate in based upon where we live. 

May 21 Topic: How to become a master at sales, KPIs, and COVID strategies with Louis Bruno
Special Guest: Louis Bruno

 

Interview

Tell us your story

  • He started at 17 after graduating from high school as a shy kid working for an HVAC company carrying tools. 

  • He learned HVAC and how to grow a company from $400K in 2006 to $2.5M in 2012 but he wanted more and put in his notice end of 2012.

  • January 2013 started his own HVAC company with $9K out of his garage with the goal of $400K in sales. He hit that by April that year and ended up doing $3.1M in sales that first year.

  • He was able to avoid many early mistakes because he had sought out an informal board of advisors of the most successful business people he could find. The flaw here though was that none of the advisors were in HVAC. 

  • Some of the best early advice he got from his board of advisors was to work from home as long as possible and not spend money on a fancy fleet and not take a paycheck until the end of year one. 

  • Although the company was growing, they weren’t making money because they lacked the infrastructure to support customer service and accounts receivable kept growing.

  • By late 2015 they had grown themselves out of money

How did you dig yourself out of this hole?
  • He reached out to one of his mentors and flew out to meet with him. His mentor told him, first thing he needed to do was get the accounts receivable collected. To negotiate and to get his money.

  • They then went over his numbers. His average sale was $6,700 but it needed to be $14,000 and he needed to reduce employees from 200 to 120.

  • The big question was how they were going to increase their average ticket size, and it’s easy to dwell on how difficult it would be but the key is to think about how you can climb an obstacle.

    • Never let a technician sell, they aren’t salespeople

    • Instead have them evaluate whether a new unit might be needed and then frame a second opinion as more experienced and trusted than their own and then you send the second opinion so that the customer doesn’t have to go find a second opinion from another company. 

  • There are 3 reasons behind purchases

    • The customer recognizes that they actually need it

    • The customer trusts you and your business to deliver what they need

    • Price, it’s not always that they want a better deal but can also be that they just need to figure out how to pay it

When you lost sales, what did you do?
  • He would pick up the phone and call every time a customer went with someone else and he would ask the to explain why they chose to go with another company or how they failed them

  • He learned from this and then iterated on their services and products to improve on this feedback

  • He has found that constantly following up with customers on quality assurance provides the best feedback 

Why are KPI’s important for a business?
  • You’ll hear that you need to work on the business and not in the business, but what does this mean? How do you do it? Are you doing it right?

  • Number 1 relationship you must master to work on your business is your gross profit dollars and overhead dollars

    • Where you lose without understanding this relationship is you will be priced wrong. If something is a cost of sales expense but it falls into your overhead costs you won’t be able to build this cost into your price.

    • Once you understand these numbers and the difference you can then look for ways to adjust by controlling the cost of sale

      • They split labor apart to realize service and maintenance wages took too big of a share of labor costs and started shifting the balance of labor and compensation to ensure they weren’t losing money in this department. 

  • Invented call by call management

    • Half of the service team had KPIs they had to hit on every service call

    • They began generating profit and were no longer eating the profit

    • What gets measured gets done

How do you run KPIS and how often do you go over them?
  • Service Industries have a fatal flaw, all we know is how it was done before

  • If you take 100 contractors as a whole and ask what KPIs are important, you’ll get a million different answers

    • Most of these answers are vanity metrics that don’t move the needle for the business they just feed the ego

    • Only 1 KPI that truly moves the needle is Turnover Rate

      • How many qualified opportunities are you getting from the customers you are seeing

      • You can’t run a mature sales operation without looking at this

    • What Louis Tracks on his Dashboard

      • # Turnover

      • % turnover by region

      • % turnover by tech

        • If they fall under the metric, this is a coaching opportunity to train these individuals 

How do you see the future of software playing into tracking KPIs?
  • As contractors we easily get distracted by the features or the whistles and bells but in reality our businesses are not in a state to actually need these features because we aren’t immersed in the broken parts of our business and we focus on the vanity.

  • Workflow automation is important but if you don’t have the systems in place what are you automating?

What is something you would tell your 18 year old self?
What Would Bruno Do? How would he coach these scenarios?
  • Average ticket is going down, been going down for the last two weeks, what is the first thing you look at?

    • For any undesired result, there are only 3 reasons this is happening

      • Tools - What are they using for a service call needs analysis? If you’re not using it you're not going to be successful. If the KPI is going down chances are the employee isn’t using it so make sure they are accountable for the tools you give them

      • Training - Your employees need to understand how to use the tools and you have role played with them and you certify that they are trained

      • Behavior - Have systems in place so that you can hold people accountable to the system of behavior that they have been trained

    • If you don’t have these systems you have to take extreme ownership of this and work on getting these systems in place 

Owner Operator just getting started, what does the 101 course look like?
  • First thing you have to do is be priced right

    • Pricing is a polarizing topic and we feel we have to charge what other people charge. You're never going to be the cheapest, there will always be someone else. You have to know your overhead coast, your cost of labor by transaction and cost of materials by transaction. 

  • To do this, set a goal. For example, I’m going to make $5K this month. You know that overhead is $5K. This means you must generate $10K in gross profit dollars to hit your margin. Then you determine how many jobs you are going to do that month. Say that's 20 jobs. You then have to generate $10K gross profit so that's $500 gross profit dollars per job. Materials and labor are each $100. So if you are doing it for less than &700 you are not making money.

  • The second thing you need to do is to set the standard for your employees and put the systems in place and the tools in place that employees need to meet that standard. 

What is the one thing our pros should do tomorrow so that they can take the next step to thriving?
  • It becomes harder to change systems later on as companies grow, so the sooner you put systems in place the better

  • Number one is to make sure you are priced right

  • Number two is to make sure you have standards in palace and you are coaching your team

  • Number three, you have to be paid by your customers. Accounts receivable can’t keep creeping up. If you have a problem collecting you actually have a customer service problem. This is a value problem because they don’t feel the value to actually pay you. 

Don’t Forget to Join Us Online

Don’t forget to join your regional meetup and learn more about how to navigate this crazy time, with marketing, sales and operations tips. 

Network with other professionals in your area and receive a $15 Grub Hub gift card, just for participating. Register today! 

Keep Your Industry an Essential Service

We’re making it easy to write to your government representatives and send them a letter urging them to classify your industry as an essential service during this time of uncertainty.

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Legal disclaimer

Housecall Pro is offering the Coronavirus Evening Update for Home Service Businesses for informational purposes only and to foster thoughtful communication and discussion regarding the COVID-19 pandemic; Housecall Pro is not offering advisory services or otherwise advising or representing any members of the group invited to participate.  Housecall Pro is not offering legal, medical or other professional advice in the Coronavirus Evening Update and makes no representations or warranties regarding the content of the Coronavirus Evening Update.  Participants should obtain independent advice relating to their businesses and their particular circumstances.

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