News

September 30, 2008  

Our own Mike Kroese spoke to us about what people expect when you are selling them a product using heating and air conditioning products as an example. Out of 500 billion business dealings for HVAC that 20% is for replacement parts/filters, 49% is for residential replacement, 16% is for residential new construction, and 15% is for commercial new construction. The average replacement for your HVAC units about every 12.5 years.

Ask yourself this question – What do customers want? They want cleaner air, better humidity control, better temperature control, energy efficiency, and a dealer and brand they can trust. How does one get customers? Customers will come to you through advertising, but most of them are referrals (word of mouth). Did you know that every job that is done provides that company with a referral either bad or good. The national closing rate for non-referrals is 20%, whereas the national closing rate for good referrals is 85%.

Whenever you do a job for someone, you will find that 50% of those people you worked for will be disappointed in that job; 4% of those people will report their disappointment to the company; and 96% of those disappointed will not report it to the company. Those people who are disappointed with your company will probably tell at least 10 people and those who are very satisfied with your company will tell only three people.

Today if you replaced your HVAC system it would cost the customer $5,000.00. Below is an example of what it would cost on referrals:

• Ten bad referrals is equal to ($5000 x 10) – Loss of $50,000.00.
• Three good referrals is equal to ($500 x 3) = Gain of $15,000.00.
• This is a $65,000 swing from bad go good referrals.

The bad referral keeps on giving for years and years. Did you know that the company is not judged by all other HVAC companies, but they are judged by all service companies and purchases!

Today a lot of consumers will research and educate themselves with friends, family, co-workers and internet. Some consumers will tell the company exactly what model they want because they have researched the internet and have all the information they need.

Today 45% of all households have someone who has a respiratory ailment. Mike told us about the different kinds of filters we could use that would keep the different allergy problems down. You need implement effective skills training in any business today. Referrals start the moment you call a company and they never end.