Aligning HVAC Sales Responsibilities with Results

Heating, ventilation and air conditioning business owners and managers look to their technicians and salespeople to increase sales and profits from the opportunities created by marketing, advertising, and operations. When the results don’t match the desired company objectives, owners and managers wonder why and ask their people to work harder. When results still don’t manifest into reality, they want to hold their people responsible.

The challenge in business is that everyone has shared responsibility for results; the reality is that undesirable results come from a lack of proper task description, assignment, ownership, and accountability.

Advice from LEAD2021 Presenters
Electric and Gas Industries Association (EGIA) addressed this topic during its recent “LEAD2021“, a two-day virtual leadership conference for HVAC and plumbing contractors.

The presentation — “Sales Accountability: Aligning Responsibility with Results” — featured advice from three EGIA consultants who are also business owners:
Drew Cameron, President, Flow Odyssey and Energy Design Systems, LLC.
Weldon Long, New York Times Bestselling Author & Contracting Business Expert.
Gary Elekes, President of EPC Training & Co-founder of iMarket Solutions.

During the session, they shared real-world stories and solutions for company leadership to disseminate shared responsibility for results.

Drew Cameron: What aspect of sales management does your company struggle with most: training, recruiting, sales consistency or accountability? 

Gary Elekes: “All of the above! But If I were to rank them, I’d say, sales force accountability, administration, compliance, and behavior.

“Coming from the supplier and contracting background, I know that sales performance overcomes a lot of sins. If people are producing well, we forgive [a decline in] some of the others. But when we’re not selling well, such as during slow seasons, those kinds of behaviors exacerbate themselves.”

Weldon Long: “Sales performance consistency. Even with emotional peaks and valleys of this industry, we try to manage the changes in weather, and different things, but let’s face it, weather does have an impact on our business in terms of customer sense of urgency.

From left: Drew Cameron, Weldon Long, Gary Elekes.From left: Drew Cameron, Weldon Long, Gary Elekes.“We have to maintain a consistent level of performance, but it’s so easy to get distracted. We have a new lead generation source, and the leads are coming in, but they’re not being as qualified as they should be. The sales team was frustrated with it. We met in the morning, and I told them I knew about the problem, and that I’d fix the problem, but in the meantime, we have to keep driving sales, we have to focus on the fundamentals: build relationships, investigate the problem and solve the problem.

“We have to focus on what we’re for, not on what we’re against. They’re all important but getting a consistent level of performance is one of the biggest challenges.”

Drew Cameron: How do you help salespeople stay focused on the things they can control? 

Weldon Long: “One thing I talk about with my salespeople is, that there are two parts to a sale: the process and the outcome. The process is everything you do. The outcome is whatever the customer does, which you have zero control over. You can influence it, because the better you manage the process, the more likely you will have a good result. But ultimately, the homeowner makes the decision, and controls the outcome.

“The challenge with most salespeople is that they spend a disproportionate amount of time worrying about the outcome: ‘Am I going to sell it? Or, ‘What’s my average ticket going to be for this week?’  Those things are important, but if you focus on the outcome some bad things can happen.

‘When we decide the result will not be good, we start cutting corners, and don’t execute the process the way we should.’ — Weldon Long

“If early into a sales call, a homeowner says ‘We’re not buying today,’ or ‘I’ve got another contractor coming in with a bid after you,’ we start getting these signals and we start judging what we perceive the results to be. When we decide the result will not be good, we start cutting corners, and don’t execute the process the way we should. You must let everything the homeowner says that might sound negative slide off your back.

“If they say, ‘We’re not doing anything until next spring,’ you go through a half-baked presentation. The bottom line is, you must ignore what you perceive to be the result, and focus on the process.

‘Circle of Influence’
“Dr. Steven Covey used to talk about the ‘circle of influence’ versus ‘circle of concern.’ The circle of concern is everything you’re concerned about. The circle of influence is everything inside that circle that you actually have control over, which is yourself. In my world, winners focus on their circle of influence, those things they can control. Whiners focus on their circle of concern. Stay focused on your Circle of Influence, follow the process, and let the results take care of themselves. Don’t anticipate bad results.” 

Gary Elekes: “I want to go back to how we stay focused. You need a defined level of training around the sales process. The more successful that salespeople become, the easier it is to become complacent and drift away from the process. Very successful people will reinforce what is important. We want to reinforce that through sales management, coaching, role playing, and ride-alongs. It’s boring but it’s consistent and successful.” 

‘You need a defined level of training around the sales process. The more successful that alespeople become, the easier it is to become complacent and drift away from the process.’ — Gary Elekes

Drew Cameron: How do you handle poor sales performance?

Gary Elekes“Training is important. I would suggest it should be a meritocracy. I was in sales management for almost 20 years, and always looked at my people and made sure they understood the standards. So, invest in your peak performers. While I support the idea of training, you can’t train me to be an NBA center, at 5 ft. 6 in.

“You have to look at the skills and standards. And we also have to understand how the training will impact them. So while I support training and coaching, I think you also have to have an understanding of what we’re trying to get from the training. What is the desired outcome of the training?

“The most important thing I would suggest is, at some point you must have standards in place. If people can’t make the standards because they don’t possess those skill sets or are not willing to put in the effort to improve, a change has to be made.

“Rarely would I hire another sales professional to come onboard before I train [the struggling salesperson]. But I do think there’s a sequence of events a sales manager needs to look at:
1. Define the standards.
2. Design a process.
3. Train around their skills.
4. Coach and develop them.
5. Hold them accountable.” 

Weldon Long: “Two things are related to sales results: the personnel, and the system we put the person in.  As owners and manager, it’s easy to blame the salesperson. We have to look at what’s going on with them, including their skill set, ability and training, but also, what is the system that put them there? What’s your lead qualification process? What’s your training process? What does your entire sales process look like? There are systems we put people in that affects their performance.

“Edward Deming, the Total Quality Management author, had an idea for manufacturing excellence. He took it to the Big 3 automakers, Chrysler, Ford and GM in the 1960s. They weren’t interested. So Deming went to Japan, and the Japanese automakers jumped into TQM. And look what happened to the Japanese auto market in the 70s-90s. Japan dominated.

‘What’s your lead qualification process? What’s your training process? What does your entire sales process look like? There are systems we put people in that affects their performance.’ — Weldon Long

“Deming’s system includes, ‘Statistical Process Control’. You have the system, which provides a maximum performance benchmark, and you have the person inside that system. See the article : Massive Growth of HVAC Controls Market by 2027. You have to look at improving your system as well as the person. It’s easy to blame the person. Blaming the system requires us to look at management and ownership. Look ALSO at management and ownership.

“When I have someone who is struggling, I look at the system, and try to coach the person. And the first thing I tell the person, especially if the person has a record of being a good performer, is ‘you didn’t forget how to be successful, right? Last month you had a great month.’ Almost always there is some distraction, where the focus goes and the energy flows. And maybe that person got into a rut, had a few bad leads, and now they’re focusing on the bad leads. Why weren’t they qualified better, or look at the weather, nobody will buy now.

“You have to make sure you don’t get distracted by those things and stay focused on the things you can control, ways you can become better. Consider the individual, but you have to also look at the system, your lead qualification, lead management, the sales process itself, and expectations.”

Gary Elekes: “Adding to that, owners have to understand who they are bringing in to the system, and into the company culture, and their aptitude. If we are  bringing in people who don’t match up with the system, we will see lots of fluctuation.”

Drew Cameron: Let’s focus on the comfort advisor aspect of things. When you have multiple salespeople on your team, how do you go about allocating leads? Because you have different scopes of work, marketed leads, technician leads, big box leads, etc., and performance issues from month to month.

Weldon Long: “As Gary said earlier, you get what you earn. I know of many companies that have been very successful with a ‘batting order’ for lead sharing, based on benchmarks. You have to feed the hot hand, the people who are selling the best from one week to the next.

“There’s also the question of what types of leads you have. We had a situation a couple of years ago, where a salesperson had a very high closing rate on their tech turnover leads and a very low closing rate on their marketed leads. So we redesigned the sales department to have people who specialized in marketed leads, and others who specialized in tech turnover leads. 

“With the marketed leads, you have to stick to the fundamentals. I was with a client in southern California, with 20,000 maintenance agreements, exclusively tech turnover leads. They didn’t have to do much outside marketing. I was speaking with their sales guys about three bids. They said we don’t ever get three bids.

“If you’re running marketed leads you’d better be battle tested on the  ‘I’m getting three bids’ objection and battle tested on ‘cheap price’. You can get away with some of those things on tech turnover leads.

“We found people who were better at marketed leads, and stronger in the fundamentals. It worked out great for everybody. The people running the marketed leads got better, they got battle tested. Close rates went up. And that was their own little kingdom. They had plenty of marketed leads.

“It worked out better for all. It’s all about feeding the hot hand in the batting order and making sure the right person is on the right call. I know that can be done, and  your dispatchers must be certain to get the right person on the right call.”

Gary Elekes: “I would start with application knowledge and experience. I won’t send a new technician on a call to troubleshoot a VRV system who doesn’t understand that technology. Once the skills chart is clarified, that’s the first part of that process.

“The second part of that process is simple: I promised equal opportunity, but I did not promise equal results. So meritocracy is defined as ‘we’ll give you the opportunities, and your performance begins to help you establish your place in the sales lead ‘batting order.’  Peak performers get the best opportunities. 

“If somebody is struggling, that’s a private conversation. Praise publicly, coach privately.” — Gary Elekes

“Equal opportunity turns into results, and results create meritocracy. There will be owners who don’t like that, and I understand, but my overall philosophy has to be that the entire company has to be taken care of, not just one individual. If you’re hitting at .250 and you should be hitting at .350, there has to be a consequence to that.” 

Drew Cameron: When results don’t meet company objectives, how do you communicate to the team or to the individual?

Weldon Long: “I talk to the team initially. If I recognize an issue exists with somebody, that is private, I have a private discussion.”

Gary Elekes: “If it’s a macro issue, like the entire company not performing, we have sales meetings. We’re always going to have a team meeting on performance. When I was doing sales management I was sharing results. I focused on the positive. I don’t have to call out the negative, the negative stands out on its own. If you have a scoreboard in the office, they see it. I don’t really call out people’s negatives, I call out the positives.

“If somebody is struggling, that’s a private conversation. Praise publicly, coach privately.”

Drew Cameron: “For your comfort advisors, do you recommend focusing on their revenue per lead or closing ratio? A great comfort advisor can have a great closing ratio, but there might be a comfort advisor with a lower closing ratio but higher revenue per lead, and I’d rather give them the lead.”

Gary Elekes: “I would pick gross profit dollars per day. You can have great revenue per lead and still lose money. I’ve proven that mathematically in just about every seminar I do. But the revenue/gross profit dollars per lead is important. Somebody who’s selling a $30,000 job that’s closing at 25% might be more interesting than someone who is selling two jobs at $10,000 each. 

‘It comes down to gross profit dollars. Revenue is nice, but it’s showpiece stuff. Gross profit dollars is how we pay the bills.’ — Gary Elekes

“It does come down to gross profit dollars. Revenue is nice, but it’s showpiece stuff. Gross profit dollars is how we pay the bills. I look at a group of metrics together. Those tell the story. One individual metric or KPI rarely tells you the whole story.”

Weldon Long: “If you’re looking at closing ratio, you better also be looking at average ticket amount. Somebody with a very low average ticket because they’re dropping prices, could have a high closing rate. I like revenue per lead as well, but Gary’s talking about a level of sophistication and nuance in terms of gross margin dollars. We measure revenue per lead. It’s an easy benchmark you can measure quickly and gauge how people are doing.

“You have to peel the onion. Somebody can have great revenue per lead and a great closing rate, but bad margins if they’re giving away the farm. You can have a high average ticket of $15,000, but if that includes a new tankless water heater, high efficiency heating and air conditioning, indoor air quality products, new ductwork. It might sound good at $15,000, but you have to look beneath the surface and that’s the subtlety of expertise that Gary gets into by looking at gross profit dollars per day.”

 

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