Top HVAC Contractors REACT to Tariffs and Refrigerant Changes!

Welcome to The Successful Contractor powered by CertainPath, a show for residential contractors about residential contractors. We chronicle business journeys, share insights, and celebrate successes in this wonderful industry. I'm your host, Bob Houchin. For more information on how CertainPath can put your contracting company on a certain path to success, visit our website, www.mycertainpath.com. I hope you enjoy today's show and take away a nugget or two.

One of the quickest profit killers What happens is actually the slow creep. It's a little bit here, it's a little bit here, it's a little bit here, and all of a sudden those profitability numbers are dropping. And they're dropping because we're allowing the slow creep in overhead. We're allowing the slow creep in field labor. And that may be overtime, that may be other things that are happening, maybe, you know, multiple return trips because we're having to wait for these parts to come in. So as far as how they're protecting profitability, number one, absolutely making sure they're priced right and they're raising prices to cover the costs. But also number 2, constantly assessing that P&L and watching those percentages and holding firm, holding the line for where they need to be.

Our scripts are going to give you a generalized idea of what should be said. And then we wanna make sure that we give the technician, the salesperson, or the call center person an opportunity to make it their own because no one wants to be fed a script. No one wants to feel like it's forced or canned. And the only way that we can overcome that is practice. So if our companies are giving the scripting to the technicians, salespeople, call center people and Hey, I want you to go through and make a few changes to make it feel like you, make it sound like you put your voice to this, and then allow them to practice it with the team. And hey, how does this sound? Is, could we say it a different way? What sounds better? You know, say it to other members of the team, have them bring them in so that way they could play the customer and hear it for the first time. How did that sound to you? That's the kind of thing I need these companies to be doing is taking the scripting and making it their own.

Yeah.

Practicing it until it is natural for them to bring up in a conversation and then giving them feedback. On maybe something that didn't quite land in that script or how they said it, and then practicing it, perfecting it, and doing it over and over again. That will give the people in home and on the phones the confidence to have a conversation, not just read from a script, be informed on what's happening, digest the information, and then regurgitate it in a way that makes sense to the customer.

Hey everyone, welcome back to the Successful Contractor Podcast. I'm Bob Houchin. If you're If you're a residential HVAC, you already know it's been kind of a tough season. Call volume's soft, homeowners are a little more hesitant to invest in new equipment, and a big part of it's costs keep rising thanks to refrigerant mandates, tariffs, supply chain issues, all those fun things. And these challenges are impacting every level of your company, from your techs and salespeople in the field to the teams managing the budgets and inventory. And that's why Today's conversation's critical. It's a bit of an emergency podcast, if you will. We're talking about what to do about all this. And joining me today are 2 incredible people that will be able to provide some insight. First, Ms. Esti Jacobi. She's been a longtime business coach with us at CertainPath and trainer. Before she came to us, she was a multi-time crown champion. So top-notch sales, HVAC salesperson. Today, she's instrumental in helping techs and comfort advisors talk to homeowners about these issues and giving techs and salespeople clarity and confidence so they can provide the right kind of care. So, Esti, thank you for joining us.

Well, good morning. Thanks for having me.

Yeah. Also joining us is Ms. Mickey Stone, who works also a business coach with CertainPath, who works with some of our largest members. So a lot of companies, we're talking $20 to $100 million. Uh, an absolute powerhouse when it comes to operational strategy, leadership, helping these big teams pivot because she did it for a long time before coming to us. So, Mickey, thank you as well for joining us.

Thank you.

I'm super excited to be on here and, uh, yeah, talk about this very timely, uh, situation that we're dealing with in the trades.

Absolutely. So let's, let's dig in. Uh, we'll open it up to both of you starting kind of at a high level. How are these refrigerant changes and tariffs showing up when you're talking to, to our clients right now? So, Esti, you're, you're at the top of my screen. So let's start with you. What, what have you noticed in your conversations?

A lot of the conversations that I'm starting to have with members are really revolving around price increases and the refrigerant shortage itself, not being able to get their hands on the supplies they need to ensure that they can get the installs done in a timely manner. We're having to pivot a lot now, find different resources for the refrigerant if we can get our hands on 454B. If not, we're, we're looking at potentially changing over to an R32 platform. So that's been going on a lot. And then just uncertainty on when do I increase my prices? How often should I be doing this? How much should I be going up? You know, am I gonna price myself out of this market?

Yeah.

So, That uncertainty makes people a little wary about making changes, even though we know at this point we've got to change rapidly to be able to stay on top of what's happening.

Yep, for sure. Micki, you're dealing with some significant companies, large companies, market leaders across the country. You're coaching them. How are they handling these cost hikes operationally, or what are they doing differently?

The best summary is They're not doing anything differently from the point of they're just continuing to operate in an excellent fashion. So in the example of, yes, you know, these cost hikes are coming fast and furious, they are pivoting as the cost hikes come in and they're adjusting their pricing appropriately is the biggest part of it. The other thing that they're doing differently is they're talking to their technicians, their frontline staff, their CCRs on the phone. About what these increase in prices mean, about the shortage of the 454B, what it means, and really educating them so that they can educate their homeowners.

Yeah. Yeah. That's interesting. I'll open this up to both of you as kind of a follow-up, but Mickey, we'll start with you because you brought it up. What, you know, when you increase pricing, a lot of your frontline folks go, oh, what are we doing? But they don't understand what's happening, right? Unless you talk to them about it. So how are our companies, especially at that size, you're talking multiple levels of management, how do they kind of, you know, educate them about what's happening? I guess maybe they're seeing it, right, with the changeover, but what's that communication look like?

The big part of the communication is the team needs to be made aware. So they're presenting it to their team members and saying, hey, here's what's happening. There are various articles, news articles that go into depth about where the bottleneck in the refrigerant shortage and availability is coming from. And so, they're making them aware. They're showing them. They're not just telling them. They're showing them the proof so that they can have that internal belief as well. So, first of all, they're making them aware that it's happening. They're creating in them The desire to talk to homeowners about it, to really help their clients to understand this is the times that we're in and this is what we're facing. And then making sure that they really have that in-depth knowledge programmed into their brain, if you will. And, you know, we have different resources that certain have tools at their fingertips that they can utilize, not just to talk to their technicians, but then for the technicians to talk to the homeowner about.

Right, right. For sure. Now, Esti, um, you, you work with a lot of companies, maybe not necessarily as large as the ones Mickey's dealing with. So, and I think that's a lot of people that watch this stuff because that's the majority of the market, right, is smaller contractors. What, what, what are, are you seeing with them? I mean, right now, you know, a lot of people come to us and, and we're working with them to put systems in place, get things in place to run more operationally efficient and run more profitably. And then boom, you have something like this show up. And it can throw a wrench into things. So, um, how are they smaller, smaller guys, say it that way, but smaller operators, how are they supposed to communicate this to a team that's already like, what's all these changes going on? You know, you guys are, are doing so much and, and pivoting so much, and now I've got this to deal with. So how, how are, what's that communication look like for them?

What's, what's really cool about it is whether you're a $100 million company or a $1 million company, the same kind of rules apply, right?

Right.

They need to be communicating with their technicians. They need to be talking with their salespeople. They need to be vigilant about training their call center because people are a little bit more wary of making big purchases right now. And our goal and our job as contractors is to find solutions. So I think the conversation is really pivoting to include what else can we do now? What are some of the things that maybe we're not doing or we haven't focused on because it, It hasn't been like this in quite some time. We haven't had these kind of struggles. Have we had struggles?

Of course.

I mean, from finding good people to work for us to finding the right amount of customers that we need to stay busy, and it always kind of teeter-totters, right? So right now we're in the kind of new era of we've got customers, we've got employees, but we've got customers that are hesitant. So our job is to help the customer see the benefits of doing business with us and not shortchanging themselves. And, and skipping out on what they need to do to be safe and efficient and comfortable in their own homes. And that's the kind of conversations that even the smaller companies are, are having with their techs. It's not so much a, how do we fix this? It's how do we find solutions that make sense now?

Mm-hmm. Very good. Very good. I wanna give you, uh, SCA, well, I think it's both of you. You really both were like, hey, we need to, we need to do something. You, you kind of raised the alarm and we obviously, and I knew what was going on in the industry. from being in it. But you're like, it's really our people are feeling the squeeze in the group, outside of the group. We need to try and provide additional tools and insight for our CertainPath members to try and balance this out. And I know we went to work on creating some scripting and some pieces that technicians and salespeople can use to educate homeowners, right? To let them know what's happening. But let's, before we get into those In particular, Esti, when you're, you know, when you're training, because you're training technicians and salespeople all the time, what, what do you tell them about mindset when they're going to a home and they know all this is going on and prices have gone up and they're like, they're feeling that anxiety because a lot of them are on performance pay, right? So how do you kind of get them to, what kind of mindset do you coach them to have as they go towards the home? Hey everyone, just wanted to break in real quick to talk to you about my organization, CertainPath. If you're watching this, you're a forward-thinking contractor. You're trying to build the best business possible. There's lots to learn from podcasts. I know I listen to plenty. But to elevate your company even faster, it's worthwhile partnering with an organization like CertainPath. For over 25 years, we've been transforming plumbing, HVAC, electrical, and roofing companies. At CertainPath, we have numerous coaches like Mickey and Nesty on today's show. We have proven systems and procedures We have over 1,200 fellow contractors, people that you can learn from, interact with, network with. We have group buying. Those members represent over $5 billion in purchasing power. And we have training for you and your employees and so much more. Everything to maximize your top-line revenue while keeping more on your bottom line. You know, we have a saying at CertainPath that smart contractors learn from their mistakes, but wise and wealthy contractors Learn from the mistakes of others. So if you're tired of going it alone, tired of figuring things out by yourself, go to mycertainpath.com or call 214-453-1591. Book a discovery call. See how we can help your business no matter what your size or situation. I know we can help. I've been here 22 years. I've seen every kind of success story imaginable. I'd love to see you realize your full potential by putting your business on a certain path to success with CertPath.

I have to remind them, if we panic, the customer is gonna panic, right? If, if we look stressed, the customer is going to be stressed. So we have to keep it as, as, as normal business as we've always operated. But, you know, add more empathy to what we're doing. You know, feel for what the customers are feeling, understand better what they're feeling by asking better questions, digging a little deeper, figuring out where that fear is coming from. And then working through it with, with better solutions. And, you know, one of the big things we're really talking about right now is financing. How do we help people afford what they really need as opposed to putting it off and creating bigger problems for them down the, down the road?

Right. That's a great nugget. Do you, um, when you, when, just to follow that up a little bit on the financing side of things, what, what's, what are some best practices on when, when you know it's a, a situation where it's, it's a large potential, large purchase, how often and, and how, Early in a call, should financing be mentioned? Any insights on that to kind of plant that seed, if you will?

Yeah, I think it should be both on the service and maintenance side and on the replacement sales side. We should be utilizing financing every opportunity that we have. So whatever your minimum threshold is for financing, $500, $1,000, $3,000, anything over that amount should have a financing option attached to it. Even for the people that say, I don't need financing. Maybe they don't realize what's gonna go into their project and perhaps they'd prefer to borrow our money instead of using theirs. You know, it doesn't hurt to allow a customer to keep a savings account going while using our money instead because, you know, the old adage, it happens in threes. You know, they, their air conditioning system goes down, it might be the plumbing or the electrical or the roof next. And so why not have some extra cash around to be able to take care of other projects? So. Whether it's now where we've got these kind of issues or just quote unquote normal days, financing should always be top of mind.

That's good. Um, because, you know, you're dealing with technicians and salespeople all the time and, and obviously the owners too. What are there certain trends that you're noticing, like communication mistakes that you always see, especially that, that would speak to these current, the current events of the day that If someone watches this, they're like, oh my gosh, my, my guys are doing that all the time. Like, are there certain things we can, you know, raise the red flag on to let people know what's, what's happening?

Yeah, it's the lack of, of options for service. Um, I'm, I'm seeing, you know, that we're, we're, we're finding the opportunity to help make improvements in people's lives. Yeah. And we're building these options that will take care of those solutions without providing the solution on how to pay for it. So when I say the options need to change, I'm talking about on the service side, we tend to forget to offer that financing.

Right.

And we tend to lean heavily on using financing for the replacement side.

Right.

But when we look at, you know, what Americans and Canadians, what anyone in North America can afford right now, it's not what it used to be. And even if they have the money, they're hesitant to spend the money. So we've got to give them that path to say, hey, Here's money that you can borrow and use towards this project and make sure we keep you safe and secure throughout the rest of the season. So, yeah, if I can stress anything, it's especially those who have, uh, maintenance and service side to their business is talk to your technicians about financing. And if they're not comfortable with it, they're not gonna offer it.

Yep.

So make sure they're fully trained on it so that way they feel confident in giving those options as well.

Also, I, I wanna bring it up now. You'll probably agree with me. Because we've all been doing this a long time and we've seen the market go up and down. And I can remember the housing crash and no one was buying anything. But in those situations when you're stuck, I don't wanna say stuck, but when you're really dealing with service buyers, it's now more than ever is important time to focus on club memberships, right? And really make that a priority. What are your thoughts on that, Esti?

I think 100% that that's our pipeline for future business. Those are the people that trust us and will go with us. And You know, we're gonna get less, uh, shopping around and we're gonna have more trust going into these kinds of calls. So why wouldn't you wanna create a relationship pipeline that will lead to future sales?

Right, right.

Absolutely. Makes sense.

Yep, absolutely. Um, Mickey, let me shift over to you more on the operational side. Um, you know, if, if people aren't increasing those prices, those margins are getting squeezed, right? So what are, what are savvy contractors doing in addition to obviously the easy one that we teach all the time is, Getting your pricing right. But beyond that, that layup answer, what are, what are some other things you, and you kind of indicated it earlier, they're just getting, they're the, the top guys are very operationally efficient, right? So, but maybe someone that's aspiring to get to that level, what, what should they be doing in addition to making sure their pricing's right to, to hit their margins?

When we talk about the idea of, of protecting profitability, really, um, as you mentioned, you know, the first thing we can always look at is, are we priced right and are we adjusting our pricing to the costs that we're incurring as the cost of all items. You know, we're obviously talking quite a bit about the refrigerant right now, but we also are seeing the tariffs affecting service parts, replacement parts, those type of things. So we need to have a broad focus on what our overall parts costs. We need to make sure that we are assessing everything. and pricing appropriately as the costs change. In addition to that though, when we're talking about protecting profitability, you know, we want to look at overall operating, overall overhead. You know, are our percentages on our P&L reports, are they following the financial model? And if not, why not?

Right.

Because one of the quickest profit killers is actually the slow It's a little bit here, it's a little bit here, it's a little bit here, and all of a sudden those profitability numbers are dropping. And they're dropping because we're allowing the slow creep in overhead, we're allowing the slow creep in field labor. And that may be overtime, that may be other things that are happening, maybe multiple return trips because we're having to wait for these parts to come in. So as far as how they're protecting profitability, number one, Absolutely. Making sure they're priced right and they're raising prices to cover the costs. But also number 2, constantly assessing that P&L and watching those percentages and holding firm, holding the line for where you need to be.

Yeah, that's good. How about, because inventory, you're taught refrigerant challenges, like what are these big players doing to try and handle this? Is it just gobbling up as much as they can? Like, I think it's important To get your perspective. So smaller people that may be watching this go, oh boy, that's what they're doing. I need to be more proactive, right? So that's why I bring it up. So what, what has your experience been with these large operators that are driving their markets? What, what are they doing?

So there's a couple different things. Um, first of all, uh, for, you know, we are still allowed to install the 410A units. So if they're are 410A units out there. They are purchasing and acquiring those. Those are actually what they're working to sell first because the margins are a little bit better on them and they obviously have the availability and the refrigerant to complete the installs on those. So that's one of the things they're doing. The other thing that they have all done, and I would encourage all members of all sizes, is they are expanding their brand offerings. You know, those who have been committed to brands that are exclusively 454B, they are adding ancillary lines that have the R32 systems so that way they are not locked into one particular brand and they're not locked into the potential bottlenecks of not having that refrigerant availability. The other thing that they are looking at from just inventory holistically is, you know, if a company has been dedicated to OEM parts, They're starting to look at installing universal parts because again, we're looking for the part availability. We're looking for how quickly can we take care of our homeowners and how quickly really can we bring in that revenue to continue to capitalize on what historically, of course, HVAC is our busiest season is the summer. We want to keep rocking and rolling through it.

Yeah. Yeah. That's great. What are you noticing? Are there any other, you know, we talk about this, this overall theme of operational efficiency, right? Making sure that you're as tight and buttoned up as possible. But obviously even large companies, there's always something to work on. There's no such thing as perfection. We're all human beings, right? What are certain things you're noticing in your calls? Because I know you get to host calls with multiple large operators at one time. What are the main themes that they're like, we need to dial in this in our company, we're working on this, I'm working on that. Are there 2 or 3 things that you're noticing that kind of shine through in those calls?

Uh, right now, and we've kind of alluded to it on this, on this session, is, uh, overcoming the objections in the home. And both from the technician side—

Even at that size?

Even at that size. Absolutely. Um, in including the technician side, but especially the sales side, going back to what Esti had said before, is consumers are hesitant right now.

Right.

And to your point, it's nothing we haven't seen before. All 3 of us lived through the Great Recession in the trades, you know, 2008, 2009, and we all came out of it just fine.

Right.

So that will be the same here. We will all come out of this just fine. We just need to pivot. We just need to be adaptable. I think that's a huge part of what makes operationally excellent companies, operationally excellent regardless of size, is they are flexible. They're willing to pivot. They're willing to adapt, such as bringing in another brand if needed. And then to cycle back to your question of, you know, what's a very common theme, it is overcoming those objections. And that's where, you know, the tools and resources that we've created related to the tariffs, related to the refrigerant changes, It's helping them to overcome those objections because it is a communication piece that they're finding is very useful with homeowners to explain what's happening. It's very factual. It's pulling some of that emotionality out of it. It's helping to build that trust level that, you know, don't just take my word for it. Here's unbiased information about it.

Yes.

But those are the biggest conversations I'm having right now is Is the communication in the home and how to encourage homeowners to make the best decision for their home and their family.

That's great. Well, you teed it up beautifully for me, so thank you. But yes, we, we've all 3 of us have been, been working on some point, what I call a point of sales piece, right? And scripting. I mean, obviously one does not work without the other, right? Um, so I mean, Mickey, I think you highlighted it well. Even large companies that are very good operators and are training all the time. Like they're even facing headwinds. So, um, SC, let— I'll start, I'll go switch over to you because I think you and I really dealt with the language at first. And then Mickey, I know you offered some insights as well, but can you kind of share, um, just some insight with people that are watching, have not seen the piece? Certain Path members, you obviously get access to it. You can download it on the hub. What, what this point of sale piece does, it's not a hard sell, right? We're not scaring anyone. Maybe provide some, some insight. And so if people that want to build something on their own, what we're talking about and how that might might help them when dealing with skeptical homeowners about why is this so expensive. Hey, breaking in again to talk to you about my organization, CertainPath. When the industry shifts like it has with refrigerant changes and tariffs, most contractors are left scrambling. But at CertainPath, you're never on your own. We have experts dedicated to creating tools, training, resources as challenges arise so your team knows exactly what to How to say it, and how to keep closing with confidence. It's just part of all that we offer at CertainPath. We have dozens of coaches like Mickey and Esti who are on today's show. We have foundational systems and procedures to ensure your company runs as efficiently as possible. We have over 1,200 fellow contractors representing $5 billion in purchasing power. These are people you get to network on— with on a regular basis. We have training for you and your employees, and so much more. So if you're looking to elevate your company faster, if you're looking to navigate challenging times with ease, it's worthwhile partnering with an organization like CertainPath. For over 25 years, we've been transforming plumbing, HVAC, electrical, and roofing companies. We have a saying, I love it, it says smart contractors learn from their mistakes, but wise and wealthy Contractors learn from the mistakes of others. So if you're tired of going it alone, tired of figuring things out by yourself, go to mycertainpath.com or call 214-453-1591. Book a discovery call. See how we can help your business no matter what your size or situation. I know we can help. I've been here 22 years. I've seen success stories of all shapes and sizes. I'd love to see We want to see you realize your full potential by putting your business on a certain path to success with CertainPath.

So it really is data-driven, and like Nicky had said, it takes a lot of the emotion out, and we cite really good sources that a homeowner would know exists, you know, and they would understand that this kind of third-party verification gives it some meat and some legs to it. This, this is happening, and this is what this industry is dealing with, and A lot of times people understand there are tariffs and they see that and they see it at the grocery store and they see it at the gas station and they may see it in other places, but they don't think about it a lot of times in terms of the construction and trades industries and how impacted we are by these things.

Yeah.

Even if things are made in the USA, the parts are still coming from other places. So we're going to see tariffs no matter what. And being able to address it and say, here are the facts, Here is a site that we can use as a source and that, you know, this is good information. These are some things to consider. So we're creating the opportunity for conversation with this piece and we're creating a little bit of urgency, which is what we need no matter what's happening in the world right now. That's the name of our HVAC game is create the urgency so they understand that doing business with you today really will be the least they'll ever pay on their new system. Yeah.

Right.

You can wait a week, you can wait a month, you can wait a year. However much time you plan on waiting, you're gonna see price increases. So let us help you make a good decision today that will save money for you and keep you happy starting now.

Yep. It states the facts and it really just makes, it makes it very obvious like, hey, this is, it's not gonna get any cheaper. Right. And we're not, we're not scaring you. We're just putting it in black and white. This is what's happening. We're, this is what we're seeing. It's affecting everyone. It's not just us, but you just need to be aware of it. I think like in anything, whether we're dealing with HVAC or what we train in plumbing, electrical, roofing, you just want to educate people so they can make a choice. If you're not educated, you're forcing them really to make a choice that may not benefit them in the long run. But as you know better than anyone, SC, as someone who trains technicians and salespeople, this, when I would one piece that works for either one, But it's not effective for either without the right communication, without the right scripting, which is what you teach all the time, right? How to frame things so people understand it. So how, from your experience, how critical is it to be able to know what to say at the right time or when to introduce something like that? You know, you're not walking into the house and go, here you go, I'm going to scare you with what's going on, right? That's not what to do.

Right.

So are there any insights you can provide on, on maybe, you know, for people that don't have something like that, um, how their technicians or salespeople could communicate these things effectively in a non-scary way to homeowners?

I, I think first things first, when we talk about scripting, I think people sometimes get an icky feeling when we say the word scripted.

Yep.

So I'm gonna take it back to our scripts are going to give you a generalized idea of what should be said. And then we wanna make sure that we give the technician, the salesperson, or the call center person an opportunity to make it their own because no one wants No one wants to be fed a script. No one wants to feel like it's forced or canned. And the only way that we can overcome that is practice. So if our companies are giving the scripting to the technicians, salespeople, call center people, and saying, hey, I want you to go through and make a few changes to make it feel like you, make it sound like you put your voice to this, and then allow them to practice it with the team. And hey, how does this sound? Is, could we say it a different way? What sounds better? You know, say it to other members of the team, have them bring them in so that way they could play the customer and hear it for the first time. How did that sound to you? That's the kind of thing I need these companies to be doing is taking the scripting and making it their own.

Yeah.

Practicing it until it is natural for them to bring up in a conversation, and then giving them feedback on maybe something that didn't quite land in that script or how they said it. And then practicing it, perfecting it, and doing it over and over again. That will give the people in home and on the phones the confidence to have a conversation, not just read from a script, be informed on what's happening, digest the information, and then regurgitate it in a way that makes sense to the customer. So if we focus on those things, the training, the personalization of the scripting, and the feedback, I think that's the perfect combination of how to make sure we're getting a message across correctly.

Yeah.

I love you, you, you brought up that training aspect, and I wanna highlight that in this with this other question is, Both of you know some of the— we all know some of the top operators in the country and they're parts of our organization. I always think of Leland Smith and I've interviewed countless of Service Champions people and they train every day, every day. So for people that are like, training, what do I— communication training, if you do it in times like these, this is when it pays off, right? So SC, maybe what are some things again, people that watch this that aren't part of organization, that go, I don't have any idea what to do. I mean, what, I mean, obviously there's videos. We do it. We've done videos, you and I, Mickey, you've been in videos with me that we, we, we offer free training there. But just maybe what are just some training insights for people that aren't, aren't familiar with it? What can you do on at least a weekly basis, right? To, to tighten things up and maybe see more results than you are right now.

Yeah. If, if you don't know where to get started with training, I suggest calling your team in for an all-team meeting and letting them start suggesting the areas where they feel that they can improve. Right? Even if that means as you, as the manager, get out of the room and let them talk amongst themselves, let them come up with their ideas, and then let them share with you as the manager or owner, this is what we feel like we can improve upon. It's better than coming in and telling them, you need to improve on this. So that gets the buy-in to begin with. And when they have the buy-in, they're more willing to put in the work to get to that next level. So involve the team, ask their opinion.

Yeah.

Get from them what they from you and then figure out how you're going to resource what they need, whether again, it's through our podcasts or through doing online research. I mean, you've got AI now that can help you do some of this scripting and whatnot. So use all of the tools that are out there, but get the team to want to do it first.

Yeah. Sell them the benefit because, right, if they're, if it's going to benefit them, no one wants to go home early, right? No one, even in, you know, Sure, it's summer now, but summer doesn't last. So take advantage of every opportunity. Micky, I want to shift the topic a little bit. What should, especially if you're— we're talking about larger companies that have multiple levels of management. Say, if you're the leader of a large company with the multiple tiers, what should you be doing as a CEO or president in terms of staying on top of what's going on, overcommunicating to your team? Is there a certain, like, You know, how frequent should you be talking to your management team? And then equally, how often should your management team be talking to their frontline people about what's going on and what we're doing to stay on top of things?

As far as leaders staying on top of it, and, and really what we're talking about is communication with the team. You know, how are we communicating morale to the team? How are we keeping morale strong when things are tight? You know, we have come out of a season where things were really good. for the home services industry. And we are readjusting, I would say, to the new normal, which is actually the old normal.

Right.

You know, we got used to homeowners being at home all the time and therefore looking for home repairs. You know, we got used to having income supplemented in different ways through government assistance. And as those things have changed, we are Going back to consumers being more aware of their spending, being more leery of credit card debt, being more aware of their retirement funds and their 401s and all these type of things. So all that ties into your question because, okay, as the leader of the organization, I am the one that all eyes look to. to communicate not only what's happening, Dick, but to communicate it's going to be okay. We're going to make it through this. There's no need to panic. You know, as I had alluded to before, we've all been here before, or at least so many of your management team has been here before.

Well.

And so, as far as frequency of communication, going back to operationally excellent, so many of these enterprise-level companies, They already have excellent meeting communication. That CEO, now it depends whether it's a CEO and a GM or if the CEO is operating as the GM at this time. But that GM position, that CEO position, they are meeting with their management team weekly at a minimum. And within that, they're monitoring the KPIs, they're monitoring the closing rates, they're monitoring the average These are things they're looking at daily on the Daily Management Essentials report, but they're meeting weekly to talk about what's going on. Within that, all these organizations have that open-door policy. If a manager is seeing a trend happening, and I always say, look for the trend of 3, they need to be communicating that to the GM or CEO ASAP so that they can jump on it. And as far as the Managers talking to the frontline team. Often these organizations have daily huddles. If they don't have daily, they have at least weekly, if not twice a week, huddles, trainings. So there are a variety of opportunities to talk to their team, hear what's going on in the field. And really, a lot of these conversations, if not most of these conversations, are driven by utilizing the, the DiEMER, the Daily Management Essentials report, watching the numbers. And then having the conversations that the numbers are indicating need to happen.

Yeah, just, it'd be interesting for people, again, that are outside the group, and maybe they're just trying to grow or have not worked with a, you know, a coach of any sort before. What are, even at the size that you're dealing with, the core KPIs they really hone in on, especially now? I mean, they've always been at that level, but you should be. I shouldn't say always, right? There's some that sell their— they're so good at sales that the rest just kind of happens. But good ones for the most part have strong KPIs. And so which ones are they monitoring like hawks?

Yeah, so I refer to it as the Super 7 KPIs, and it's regardless of trade. Now, I do have HVAC companies that say, I think we actually have 9, to which I reply, yes, but 9 doesn't sound as nice This is Super 7. So, the Super 7, caveat 9 for HVAC, it is number one, your call booking percentage. It should be at least 90% because you are paying money to get that phone to ring. You need to be closing 9 out of 10 of those phone calls. The second thing we're looking at is their average invoice ticket. Now, the reason why HVAC moves into a Asterisk 8 and 9 is because in HVAC we wanna look at not just the repair invoice ticket, we wanna look at the maintenance average ticket as well. So we separate those 2.

Yeah.

The 3rd thing we wanna look at, again, regardless of industry, is their closing rate in the field. How are the technicians closing? The 4th thing is their club conversion ratio. The 5th thing is their revenue per employee per day, because that is going to help generate your net profitability. If you are hitting this KPI of revenue per employee per day, your profitability has a good chance of being where it's supposed to. Obviously, caveat there is your overhead has to be in line, but that's—

Yep.

The 5th one they look at. The 6th one we look at is their replacement closing rate. So we talked about technician closing rate. There we're talking about the service side. Replacement closing rate, we're talking about the sales side, the equipment side. For HVAC, that's pretty obvious, right? That's your furnace and air conditioners. Roofing, pretty straightforward. That's your roofs. But for plumbing, we're talking about water heaters, water treatment, water softeners. Electrical, we're talking about panels, maintenance services. And then the 7th is your tech-generated leads, meaning what percentage of your calls are your technicians going on that they're either turning over a lead to a salesperson for a piece of equipment, or if they sell themselves, how often are they generating leads to themselves basically to sell equipment. Right.

Oh, good old flips. That's right. And these, and like you said, these organizations, and I, I've seen it in SCUF, they, those daily huddles, even at that size, they'll have a huddle, they'll have a huddle with their frontline people, get them out the door, and then they huddle and they, it's not an hour-long meeting, right? They, it's a quick meeting. It's to keep a, a pulse on the operation. So if they need to pivot quick, because what you don't want to is get your financials the end of the month and go, oh Lord, what has happened? Right? So it's those, it's those huddles that, that keep that from happening and it's going over those key numbers.

Yeah.

And if I could comment on the huddles for just a second too, one error, I guess I would say that I do sometimes see in the daily huddles is yes, they bring the numbers, but that's what they talk about is just the numbers, not the what do we do with it? Um, to which my response is, I can read the report for myself. Thank you very much. I see the numbers. What are we doing about the numbers? Right.

Right.

Daily huddles, going back to operational excellent companies, doesn't matter the size. How do they utilize those daily huddles? To your point, not are, not only are they short and succinct, it is, they are action steps. They're not just reading reports. They're what are we doing with the reports?

Right. Ah, great caveat. I like that. I like that. Um, SC, I wanna pivot to you on, we talked about training for people that have never trained before. Like you just gave 'em some great insights on what to do, but You know, a lot of folks that are watching this are training companies, right? But maybe they're only doing it once a week or, but, you know, even now they're facing headwinds, right? Again, we've just talked about all these things that are happening. They're outside of their control. So you have to respond to them. When you're talking and you're coaching members about what to do, and maybe what are some things you're telling them to do with their training to augment it or tweak it? Make it that much better to, so that you can maybe capture some of that closing percentage that was slipping away, right? Because people are thinking about it or whatever. So what are some recommendations you've been making?

I know when it comes to sales training, this was my favorite thing and it's a lot of my students' favorite thing is going through objection handling.

Yeah.

It, it's super fun for me. Maybe not for everybody else. I love it. But that's what they tend to focus on and we forget, hey, we need to build really good value in the beginning of the Are we spending the time to get to know, build rapport, answer questions, ask good questions, figure out what their issues are, find solutions? Then we get to objections, and we may even eliminate some of the objections if we do the work on the front end. So I've been trying to say, yes, we do want to talk about objections. Of course, yes, I want to give you good scripting to be able to get yourself out of an objection. But did we put ourselves in that place to begin with because we didn't train on anything before? For the, after the sale and the objection handling.

Everyone's looking for a fight.

Yes.

I mean, don't get me wrong, it is super fun. I love doing it.

Yeah.

But I'd rather be able to say, hey, I avoided a bunch of objections because I did what I was supposed to do in the beginning of the call. So we've got great tools. If they're not using something like our comfort survey, man, they are missing the boat. That is where the bulk of your information on how you're gonna handle this call comes from. So if they're not diving in, asking the good questions, figuring out what those problems are, and then really thinking critically, what are all of the solutions available? Not just what I wanna sell.

Yep.

What they need right now to be able to feel satisfied that they have made a solution or come up with a solution that makes sense to them and their family and their budget right now. So we don't know what that is unless we do the due diligence in the beginning.

Yep. Love it. You train them up, right? Maybe you train at least once a week. Please do at least once a week. Uh, maybe you're doing multiple times a week, right? But once they're out, they're out, right? Whether it's technicians or salespeople, but that doesn't mean your communication stops with them, right? So they're, again, they're facing maybe some more challenging, uh, times with, and, and, you know, and so how, you know, if I'm a, uh, an owner or a service manager or sales manager, what should I be doing with my team to help coach them through the day, right? Are there some best practices regardless of the position? I think there's some, a lot of things that are similar you can do, but how do you, how do you keep them built up? How do you help them learn from maybe a rough call? What are, what are some things you share with folks?

First things first, if you're not riding along with your technicians and salespeople, how do you know what's really happening in those homes? Right. And the caveat to that is, of course, when you ride along with them, they're gonna put on their best show.

Right.

But if they stumble or fumble through something in front of you, that means they're not doing it when you're not there.

Yeah.

And if they are not as confident as they should be, sure, it could be some nerves that you're there, but a lot of that probably comes from a lack of feeling confident themselves in that part of the call. So use your ride-along time as a time to pinpoint the areas that you can make improvements in. It's not a time to bash them or hold it over their head. It's just a good way for us to gauge. The direction that our training should take. And if we can use a software or something as a ride-along tool, fantastic.

Yeah.

But it's debriefing them after each call. Do not let them just self-check out of a call. Get on the phone, talk to them, figure out what's going on, get in front of problems before they become bigger problems. And if you're noticing a trend with your salespeople where they're, they're stumbling over the same type of objection or the same type of call. Maybe if we're dispatching for profits, we're going to put someone else in that position to handle that kind of call and give them some relief and put them on a call that they're really good at.

Yeah.

So we have to dispatch for profits. We have to know everyone's strengths and weaknesses. And we have— the only way we can do that is getting out in the field with them and experiencing it live while they're doing it. Because role play in the office is not real play in the field.

Oh, I like that. Yeah. But you're right. There, there are softwares. I've been to trade shows. Those were with some of these softwares and, and they're great tools, but if you don't do anything with it, like, you know, it's, it's pointless. So, but I, and I still think ride-alongs are critical because you have that eye to eye. You're sitting next to each other after the call, right? And you can, there's, it's, it's in-person training right there. I mean, I know with the software, you know, you see what happens. Oh, then you call 'em. But I don't know, there's something about being in the field and feeling that support. I think there's some, there's some value in the top companies. We still know they do it, right? This isn't like, you know, that no one does it. The top companies do it. Okay, ladies, thank you so much for your time. I know it's a precious commodity, but I want to start wrapping up because I know you both have calls to hop on. Mickey, we'll jump over to you. What's one thing you wish every contractor or HVAC team would do this week in response to all these changes and all this oddness going I think if there was one thing that I wish that they would do this week, it would be communicate with their teams.

Acknowledge it's happening, get in front of your team, find out what they're hearing in the homes. What are their perceptions of what's happening? And if they're a CertainPath member, absolutely go on our tools and resources hub, print out the materials that we have there. We have created for your frontline team to help them through these conversations. And if, you know, a company is not a part of the CertainPath membership, same thing. Go online, find the articles, find the resources that talk about what's happening, and then determine how you want to talk to your team about that. And again, looking at it from a leadership perspective, what you say is what they're going to receive, and it's how they're going to communicate it to their homeowners. So decide upfront what the message is you want. You take control of the message. Don't let the media take control of the message. Don't let your technicians take control of the message. You determine the message. Let them know the message they wanna communicate and then move forward. And to this point, do the role-playing, the skills practice, the ride-alongs to continuously reinforce the message that you want conveyed.

That's a great point because if you haven't talked to your team about What's going on?

Who?

I guarantee they're still talking to homeowners about what's going on. So what are they all saying? Oh God, that kind of scares me to think about.

Exactly. You determine the story by getting in front of it.

Yeah, that's great. That's great. Okay, Esty, same question to you. If there's one thing HVAC contractors should be doing this week, or you'd want for them to do this week to start navigating things the right way and maybe, you know, closing more deals and getting homeowners You know, happily involved with them, what would it be?

Ramp up your training. If you're doing it once a week, do 2 times a week. If you're doing it 2 times a week, double it, go 4 times a week. Let's make sure they have the support, they have the tools, they have the resources, they have the time to practice, they have the time to get feedback from you, and they have the time to pivot and change and make improvements to their presentations and conversations. And the only way we could do that is spend more time training. And I get it. It's summer, it's hot, we're busy, but this is when people tend to step backwards in training because it's kind of like shooting fish in a barrel. But this year it's not. And so we have to sharpen our tools and get our skill sets where they need to be. So train more.

Absolutely. It's an investment, right? So why, why run as many calls if you run less and sell the same, right? The profit goes up that way. So, Esti, thank you so much for your time. Mickey, thank you. you for your time. I greatly appreciate it. If you're listening and watching this and you're feeling this pressure, know you're not alone. Our CertainPath members get access to the tools that we were talking about, plus training and tons of coaching and all sorts of other stuff. I mean, we're a membership group of over 1,200, right? And they've been with us since '99 for a reason. So if you want to talk, get some help, or just get some, you know, ask some questions about what we do, You go to our website, mycertainpath.com, book a discovery call. We've got people that are wanting to help you because, you know, it's much easier to learn from others' mistakes than to keep stubbing your toe and learning from that. So thanks for joining us. And again, ladies, thank you. Appreciate your time.

Thanks, Bob.

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