Friday, July 31, 2009

Go Plumb Young Man

Job prospects are dim... except for the trades. The Manchester Union Leader reports that the New Hampshire Economic and Labor Market Information Bureau forecasts strong job growth for plumbers, pipefitters, roofers, cement masons, diesel mechanics, electricians, boilermakers, carpenters, and sheet metal workers for the next seven years. Accordingly, people who would have never considered the trades are attending trade school and signing up as apprentices.

"Plumbing probably wouldn't have crossed my mind if I had something lined up right out of college -- which five years ago was not uncommon," said 24 year old Nick Moreau.

Plumber Philip Cocchiaro delares, "You learn repair work, you'll always have food on the table."

"You've always got something you can fall back on," advises plumber, Bill Welcome. "You're always going to need a plumber, you're always going to need a mechanic for your car, and you're always going to need an electrician."

We've got a shortage of labor while college graduates have a shortage of jobs and an excess of debt. Maybe some should consider a trade before considering college. This a great time for contractors to approach high school guidance counselors to advise them about the prospects in our fields.

Download this FREE HVAC industry recruiting brochure from the Service Roundtable's Free Stuff page. Check out the other Free Stuff from the Service Roundtable.

Happy Retirement Joe Rettig

Joe Rettig, Residential Sales Manager for the Carrier Division of the Habegger Corporation, is retiring as of July 31. I'll be sad to see him go.

People like Joe make HVAC a great industry. When I think of Joe, I see him at Comfortech, holding court during lunch, surrounded by contractors. By the comments he made, it was obvious that Joe knew every one of them personally and well. He had a relationship.

Joe was old school. He came up through the industry at a time when the relationship between the TM/distributor and contractor was all important. He was very good at developing these relationships. It wasn't phony. These were heartfelt, real, and genuine friendships. These were the type of relationships that bound contractors to Habegger and through Habegger to Carrier and Bryant.

Through the years, I've received a number of notes from Joe about things I wrote or said. I know he didn't agree with everything I wrote, but commented every now and then when he did. He's an authentic nice guy. I wish him well in his retirement, though the industry will miss him.

Blogging Like a Pro

A lot of contractors are testing new approaches to attracting business, such as blogging. Southern California's Kevin Shaw does an excellent job.

Kevin puts thought into his posts. They're organized. They're informative. Moreover, in our searches at the Service Roundtable for content and plumbing ideas through Google and other means, Kevin's blog posts have popped up a couple of times. In fact, I was reading a terrific post on mold and thinking about potential content that could be developed around the issue when I noticed I was on Kevin's site. I'm not sure how I got to Kevin's site, indicating he's creating magnetic content that attracts.

If I lived in the San Gabriel Valley, Kevin's blog would impress me as a consumer. As he continues to build it, the blog will only become more magnetic and more impressive.

Cross Posting

Another company I've stumbled across repeatedly is the Irish InsuranceWorks. What this company does extremely well is cross post articles on a number of different sites. For example, you can find their article on water hammer...



On Creative Content Publisher

On Free Article Directory

On Article Dashboard, where it was picked up by The Home Improvement Blog

On Article Pros, where it was picked up by the Home Improvement blog, which is different from the one cited above

On Articles Alley

By cross posting, the author has increased the odds that bloggers will stumble across his article and republish it, which happened. He expands the number of websites linking back to his site, raising his search engine ranking. He increases the odds that his target audience will see the article.

Writing well in a blog is only part of the battle. You've also got to take active steps to build an audience. Cross posting is one way to do that (note to self... start taking your own advise and cross post).

(c) 2009 Matt Michel

Thursday, July 30, 2009

Creating An Elevator Speech

We had a request on the Service Roundtable for help writing an elevator speech. I grabbed the following video by Frank Furness. I like his simple approach and his emphasis on what's in it for the customer.

If all else fails, try the 15 Second Pitch Wizard. Fill in the blanks and it creates your elevator speech.

Appealing to All of the Senses

Trendhunter Magazine reports that Nissan is developing a "Forest AC System" for the Nissan Fuga, which will be launched later this year. The aromatherapy is supposed to affect mental activity.

According to the magazine, "The Nissan ‘Forest AC’ system would automatically control the temperature, ventilation, humidity, and aroma inside the car to match a relaxing forest setting."

Before you write this off, consider the possibilities for the home. Is it possible for air conditioning contractors to inject some form of refillable "aromatherapy" as part of a service agreement that requires continual refilling? It could reinforce the need for semi-annual maintenance.

I've known plumbing contractors who used biodegradable, citrus cleaning spray to clean faucets and fixtures during service. The spray left a pleasant citrus scent. The plumbers left the remainder of the low cost cleaning spray, which was private labelled. At the very least, it was a differentiator that got the company name and contact information in the house in a unique way. Consumers liked the scent of the spray enough that some bought extras from the plumber on the spot, boosting the average ticket.

How can we use aromas to boost memorability, satisfaction, preference, and add value?

Economic Fundamentals: The Role of Incentives

“What gets rewarded gets done.”

That’s what business professor Michael LeBoeuf calls the greatest management principle.

Simple, isn’t it? Incentives work. It’s why the vast majority of sales professionals are paid partial to full commission. Every sales manager knows that a 100% salaried sales force is a lazy sales force.

Not Everyone Is Money Motivated

Of course, there are some people who are not money motivated. Incentives don’t work well for these individuals, even though managers try to impose them.

Some technicians, for example, fail to respond to contractor spiffs and incentives. All the tech has to do to earn extra money is offer homeowners a service agreement or place a few door hangers, but the tech resists.

What drives these guys? Some are craftsman who derive internal satisfaction from the quality of their work. Others are subject to the negative peer pressure of other technicians. Some receive enough money from wages and are not hungry enough to step outside of the comfort zone.

Creating incentives for employees who are not money motivated can be a challenge for owners and managers, in part because many managers do not understand people who will not respond to monetary incentives. If the manager is money motivated, he figures everyone else should be.

The challenge for the manager is to step outside his experience and find what the employee values and use that as a reward. It might be extra time off, flexibility on the job, a fishing or golf outing, and so on.

Money Motivated People Seek Incentives

So, we acknowledge that there are some people who are not money motivated while others are. While, people who are not money motivated gravitate towards occupations where incentives are not a factor in compensation, people who are money motivated tend to gravitate towards occupations where incentives exist, like sales.

For people who are incentive driven, the design of an incentive program is critical. Done well, it leads to greater exertion and effort. Salespeople, for example, sell more and earn more.

In some companies, superstar salespeople earn a lot. They may earn more than the boss and some bosses, especially bosses without sales experience, have a hard time handling it. They shouldn’t. When the salesperson makes more, the company makes more, and ultimately, the boss makes more.

Yet, ego sometimes trumps common sense and the boss decides to cap sales compensation. What a blunder!

“Caps have some considerable disadvantages,” writes Andris Zoltners, Prabhakant Sinha, and Sally Lorimer in The Complete Guide to Sales Force Incentive Compensation. “They can dampen the motivation of top performers. Salespeople stop working hard if they know they will not earn any incremental income from their efforts. Caps often encourage salespeople to hold sales over to the next period, when those sales can help them earn incremental income.”

I’m shocked, shocked that salespeople would hold sales over to the next period. I’m not, of course. Salespeople are especially prone to working the system to their advantage. Anyone who has sold or has managed salespeople should agree.

The mistake managers make capping sales income is no different than the mistake managers make when they insist on monetary incentives for employees not money motivated (or even negatively motivated due to negative peer pressure).

Three Truths About Sales Incentives

Here are three truths about incentive compensation for salespeople…

1. Since salespeople will work any compensation system to their advantage, it’s good management practice to keep the system simple and straightforward.

2. Since salespeople shut down when incentive compensation is curtailed or capped and this reduces company sales, salesperson earnings should be unlimited.

3. Since salespeople respond to incentive compensation, raising the commission tends to result in greater effort on the part of salespeople.

Tax Incentives

I ask why anyone should expect the tax code to work different as a disincentive?

By and large, high income earners are money motivated. They respond like salespeople. Increase the top marginal tax rate and they are less motivated to perform. They’ll spend their time working the system, looking for legal ways to avoid paying taxes. And given the inordinate complexity of the tax code, there are lots of ways to work the system. The net of this activity is efficient for the individuals, but not society.

If we want more economic activity as a society, we should reduce the disincentives (i.e., taxes), not increase them. This is all so blatantly obvious to me that I struggle to understand why everyone can’t see it. Then, I remember that the people who seek government jobs are not money motivated. If they were, they wouldn’t be in government. They don’t get it.

© 2009 Matt Michel

News That Doesn't Depress You: Leading Index Points To Recovery

Over at the Carpe Diem blog, University of Michigan Economics Professor, Mark Perry, plotted The Economic Cycle Research Institute's index of annualized growth, which recently jumped to a five year high. Since the index started dropping at the end of 2007, giving an accurate warning about the economy's turn, it's jump is another hopeful sign of a recovery.

Wednesday, July 29, 2009

Call To Action

On the way to church Sunday, my wife nearly backed over a contractor walking across our driveway. Give him credit. He was industrious, walking neighborhoods on a Sunday morning to try and make something happen.

I've personally witnessed a lot more door to door activity in my neighborhood over the past six months. It's a sign that fencing contractors, cleaning services, painters, yard services, pest control companies, and other home services companies are looking for work. So far, so good.

Unfortunately, none of them offer a reason to call. About all they're doing is leaving a business card in the door. None include a call to action. Why should I call any of them? Simply because they leave a business card in my door?

At the very least, include a rubber stamped discount on the back of the business card. Create a call to action with a deadline. Always tell the prospect what he should do, why he should do it, and when he should do it.

(c) 2009 Matt Michel

News That Doesn't Depress You: Economy Hitting Bottom Says Economist Alan Binder

Noted economist Alan Binder penned a piece for the Wall Street Journal where he argues that the economy has finally bottomed out and may even show surprising growth the remaining two quarters of the year.

Binder makes a fairly persuasive case, while acknowledging that job growth will be slow to return. "It will take years of strong growth to return to full employment," he writes.

The stock market's recent performance (i.e., the Dow crossed 9,000) is another indicator that things have bottomed. At the very least, the stock performance is a sign that the panic is over. People are no longer paralyzed, worrying about how bad it might get.

I found the national panic to be the most unsettling aspect of this recession and more than partly the result of irresponsible statements by our country's leaders. The panic made things much worse. If it has passed, it's a welcome sign that things may have indeed, bottomed out.

(c) 2009 Matt Michel

Finish Strong

Need a lift? Watch this short promotional video for the book “Finish Strong.”

Tuesday, July 28, 2009

Who Is Toby Keith?

In the intro to Brand U, Toby Keith's song, I Wanna Talk About Me, is referenced. The Service Roundtable has received a few comments from people who didn't "get" the reference. My experience is that if one person asks, many others do not. Toby Keith is a country music superstar. He may be best known for his patriotic songs like, An American Soldier and Courtesy of the Red, White, & Blue.

Here's Toby Keith's music video, I Wanna Talk About Me, which will have added relevance for every contractor who attends Brand U or HVAC Comfortech 2009. Exactly how it will have relevance will have to wait until September 23.

Economic Fundamentals: Milton Friedman On The Minimum Wage

As a follow up to yesterday's post, I offer this short video of the great economist, Milton Friedman, as he discusses the minimum wage...

"Get on Twitter" Is Not a Social Media Strategy

Dan Gershenson is Creative Director of The Creative Underground, a Brand Development Agency. He's also a social media expert.

Dan wrote a nice white paper with the questions you should ask yourself before embarking on a social media strategy. Maybe the best advice in the paper is the following...

So once you’ve identified your best areas for audience connections, pick one or two tactics maximum to begin with. Then start getting your feet wet — and don’t put a lot of pressure on yourself as to what you’ll be saying as much as just getting yourself comfortable with the tactics you’ve initially chosen. Send out a post. Read someone else’s blog. Find something worth commenting on? Then do so. Has someone chosen to “follow” you or become a Fan? Then follow them right back and become a Fan too. Ease into your comfort zone but keep going. As you find a steady rhythm that involves using the initial tactics you’ve chosen, think about the next one you can comfortably add to your plate. Remember, you can’t do everything and be everywhere. And you don’t have to be if you’ve gotten a sense that people are responding to your message in particular areas.

This has been my experience. Work one approach at a time and go slow. Get to know the media, how it's used, and what's appropriate and inappropriate. I know some marketing consultants who jumped in with both feet, ignoring the culture of the media, and did nothing but create ill-will before getting tossed out.

Dan's paper is short and in the form of a pdf. Download a copy from Brandchannel here.

News That Doesn't Depress You: Home Sales Are Up

According to the National Association of Realtors(TM), existing home sales jumped a seasonally adjusted 3.6 percent in June. Moreover, the Mortgage Bankers Association reports that week-to-week loan applications are up 2.9 percent.

One reason for the increase is the jump in home affordability. Median prices are over 15 percent lower than a year ago.

The sales increase affects the entire country, led by Western states with a 6.4 percent June increased.

An uptick in housing bodes well for the entire economy.


Monday, July 27, 2009

Economic Fundamentals: Least Skilled Denied Right To Work

The government has just declared that anyone lacking the skills to produce at least $7.25 per hour for an employer has no right to work. How stupid.

The last thing anyone should want in a recession is barriers to employment. But that's what the government did by allowing an automatic increase in the minimum wage to take effect, raising it to $7.25 per hour. A higher minimum wage makes it harder for the least skilled to find employment simply because they aren't worth fully burdened cost.

Fully burdened? Don't forget the employer's share of payroll taxes, which includes social security, medicare, and unemployment taxes. And don't forget any benefits the employer voluntarily pays.

Arguments for a higher minimum wage center on "economic justice," which translates into justice for some at the expense of others. Other arguments are that people should be able to earn a "living wage." Still others claim the minimum wage needs to rise to account for the effects of inflation.

Why $7.25?

Let's buy the arguments. Let's say that it's unjust for people to earn less than a "living wage" and raise the minimum wage accordingly. However, if we're going to hike the mimimum wage, why stop at $7.25? That's not economic justice. If we're going to raise it, why not raise it to $20 per hour? Or $200?

Clearly, a $200 per hour minimum wage would be foolish. No one will pay $200 per hour for someone to flip burgers or greet people entering a store. But at what point is the minimum not foolish?

The fact is that the minimum wage is arbitrary at any level. No business is going to hire someone for $X per hour if the person can't generate at least $X per hour of value.

The Minimum Is Not Permanent

Politicans act like the minimum wage is permanent. Anyone earning it will always earn it. That's hardly the way it works. People work for lower wages while acquiring the skills and work history that enables them to increase their productivity and command greater wages in the future.

My first job involved working for a roofing contractor... during the summer... in Texas... at age 15... for $2 per hour. If there's ever a situation where a worker was exploited, paying a kid who was too young to work, wages below the minimum wage to shingle roofs in triple digit temperatures is it.

Yet I hardly felt exploited. I was thrilled to have a job and prove myself. Yet, my employer had to break the law to hire me and pay me what I was worth (and given my ineptitude, $2 an hour was generous).

By the end of the summer I turned 16 and managed to talk my way into a job in an air conditioned restaurant. Ahhhhhh!

Part of the reason I got the job was that I had demonstrated a willingness to work hard and reliability working as a roofer. Even so, I started at minimum wage. Fortunately, the minimum wage was low. If it had been a whole lot higher, the restaurant would have hired someone with more direct experience.

Even though I started at the minimum wage, I didn't stay there. Gradually I earned a small raise. It felt good. I was proud of my progression.

By forcing companies to pay a minimum wage, a whole class of lower skill workers will never be given the chance to learn a job and get better at it so they can earn more. Instead, they'll learn that there's little "economic justice" for the unskilled.


Inflation is hardly a justification for the current hike in the minimum wage. Indeed, raising the minimum wage will cause inflation.

Two years ago, the minimum wage was $5.15 per hour. Today, it's $7.25. That's a 41% artificial, government imposed mandate. How is that not inflationary?

Raising the minimum wage also pushes up union wages. James Sherk, the Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation, explains...

Unions campaign to raise the minimum wage at least in part because it enriches them. Raising the minimum wage makes unskilled workers more expensive for businesses to hire, and so hiring skilled and highly paid union members becomes a more attractive choice. This effect increases union members' earned income but reduces low-income workers' job prospects and income. That unions support raising the minimum wage is understandable, but antipoverty advocates should reconsider their support for a policy that hurts the very people they seek to help.

Unions are not altruistic. Belton M. Fleisher, in his book, Minimum Wage Regulation in the United States, quoted union leader, Edward T. Hanley stating, "The purpose of the minimum wage is to provide a floor from which we can upgrade your compensation through collective bargaining."

The Minimum Wage is Price Fixing

If a group of contractors got together in a town to set minimum prices levels in the name of "economic fairness," to ensure the biggest slug in town could make a "living wage," the contractors would be accused of price gouging. They would be guilty of a felony under the Sherman Act.

If price fixing is unacceptable, even illegal, elsewhere in society, why is price fixing for labor not only acceptable but Federally mandated?


The truth is the minimum wage kills jobs. Before the most recent increase, 33 states enacted minimum wage levels in excess of the Federally mandated minimum. As of June 2009, their average unemployment rate was 9.2%, compared to 7.9% for the states following the mandated minimum. The chart below (click it to enlarge) shows that 88% of states with unemployment levels of 11% or more exceeded the mandated minimum wage. By contrast, 64% of the states with unemployment less than 7% followed the Federally mandated minimum.

With overall teen unemployment more than 22% and black teen employment nearing 40%, this is the wrong time to raise the minimum wage. In the 1973 textbook, Economics, the very liberal economist Paul Samuelson acknowledged, "What good does it do a black youth to know that an employer must pay him $2.00 per hour if the fact that he must be paid that amount is what keeps him from getting a job?"

According to David Neumark, professor of economics at the University of California, Irvine, "The best estimates from studies since the early 1990s suggest that the 11% minimum wage increase scheduled for this summer will lead to the loss of an additional 300,000 jobs among teens and young adults. This is on top of the continuing job losses the recession is likely to throw our way."

Frankly, the job destruction from labor price fixing has long been documented. In a Policy Analysis for the CATO Institute, Matthew Kibbe wrote...

According to the 1981 Report of the Minimum Waqe Study Commission, the 46 percent rise in the minimum wage between 1977 and 1981 destroyed 644,000 jobs among teenagers alone. "The evidence is now in, and the findings of dozens of major economic studies show that the damage done by the minimum wage has been far more severe than even the critics . . . predicted." A 1983 survey, "Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment," found that studies conducted between 1973 and 1983 generally agreed that a 10 percent increase in the minimum wage would result in a 1 to 3 percent reduction in teenage employment. Given these findings, the proposal to raise the minimum wage by nearly 40 percent could result in a 4 to 12 percent drop in the employment of teens.

How Does This Affect You?

Since most contractors pay plumbers, technicians, and other field service personnel far more than the minimum wage, many believe it won't affect them. But it does. Aside from the general inflation question, it limits marketing opportunities and limits the future labor pool. It raises the cost to hire a CSR to make happy calls. It raises the cost of a parts runner. It raises the cost of hiring unskilled helpers to learn on the job.

Moreover, it's just bad economics that will create more headwinds for small business to slug through while we create a recovery in spite of govenment actions. This means you're going to have to work harder and smarter in your marketing and all other aspects of your business. Keep reading this blog and I'll offer suggestions and examples from leading contractors.

News That Doesn't Depress You: Health Care Costs

There's a lot of gnashing of teeth over healthcare costs lately. Any business owner probably goes through the annual to bi-annual fight for affordable insurance (before settling on obscenely expensive plans with high deductibles). Yet, according to Andrew Biggs at the American Enterprise Institute...

The United States rate of excess healthcare cost growth from 1990-2006 is right about average among developed countries. U.S. health costs grew an average of 1.66 percent faster than the economy from 1990-2006, while the OECD average was 1.62 percent. Clearly, the U.S. has not had unusually fast health care cost growth over the last decade and a half.

Biggs continued, "Countries with far more government control over healthcare have had just as much difficulty controlling costs as the U.S. The UK, for instance, in which doctors and hospitals are directly controlled by the government, saw costs rise 2.08 percent faster than GDP."

What Biggs is saying is that healthcare costs are rising a little above inflation for everyone, not just the U.S. And costs are rising regardless of government control and rationing. I think his point is that the argument that we must socialize health care over the expense lacks merit.

If he didn't make the point clearly enough, Biggs compares health care expenses with veterinarian expenses. Guess what? Pet health care has been increasing at a slightly faster rate than human health care.

So what gives? Are Vets out of control? Are Americans at risk of bankruptcy over out of control pet care expense?

Maybe the whole thing is much simpler. Maybe health costs for people and pets are rising because new technologies and drugs are being developed. I bet aggregate broadband Internet expense has exceeded the rate of inflation too, mostly because we are developing new technologies.

Maybe we're spending more on health care simply because we can afford it. How else can you explain spending more on pets?

If we were serious about reducing health care expenses, we would start with tort reform to reduce defensive medicine. We would go after the paperwork and bureaucracy, rather than increasing it. We would allow the formation of health care pools. We would let insurance companies sell across state lines. We would figure out a way to make the consumer the payer, rather than a third party.

Bottom line... things aren't nearly as bad as you've been told.

(c) 2009 Matt Michel

Free Marketing Ideas – Part VI

Continuing the series...

17. Make Your Fax Cover Page A Marketing Piece

When you send a fax, do you use the Microsoft Word fax cover page template? Why? Why not promote your company? Tell people what you do, offer reasons for calling your company, and give the recipient a coupon. Make your fax cover page a marketing piece.

While it’s true that we send fewer faxes, every now and then, its easier to fax a document than email it. Some situations, such as those requiring signatures, necessitate a fax. If you’re going to print and fax the cover page anyway, why not make it work for you?

18. Paperclip A Business Card To Every Bill

We all like to do business with the people who do business with us. It’s human nature. So every time you send in a bill, paperclip your business card to it. The late Tom McCart swore to me that he got one or two leads a year from paperclipping his business cards to bills.

One or two leads is nothing to get excited about, but a few business cards costs almost nothing and it takes little effort to paperclip them to a bill. More important, it supports the marketing mindset where you are constantly marketing.

19. Promote Your Company In Your Email Signature

While we may not fax much, we do email. A lot. Make sure you promote you company in your email signature. List the company name, what you do, your mission, your website, your contact information, and any awards and recognitions. This can be set to automatically be added to the bottom of any email you send using Microsoft Outlook or other email clients.

20. Save Old Yellow Pages (Cross Out The Companies Out Of Business)

When selling equipment replacements, major project, installation, or remodel work, use the transitory nature of the industry in your favor and against your competitors. Scan copies of old yellow pages directories for inclusion in a presentation book and cross out the names of companies who once advertised, but are no longer in existence. When showing this page to your prospects, comment that “A lot of companies come and go, but we’ve got a solid history, which means we’ll be around to honor all warranties and take care of your needs well into the future. Isn’t nice to have a local, family business you can rely upon?”

(c) 2009 Matt Michel

Sunday, July 26, 2009

Lee Rosenberg's 100 Simple Business Practices

Often there is little difference between a successful business and an unsuccessful one. Rather, there are little differences... lots of little differences.

Lee Rosenberg presents 100 simple business practices that every service business should perform. Undoubtedly you already do many of these practices, but you probably do not do all of them. This document will serve as a reminder of many things you should do, but may not. It will also give you a few new ideas, things that you hadn't really thought about. Add one or two new disciplines from this document and your business will improve and/or avoid the fatal pitfalls of companies long forgotten.

The file was prepared as an Adobe Portable Document File (pdf). Click to launch Adobe Acrobat or Acrobat Reader and download the file.

Click for more Freebies from the Service Roundtable.

Why Buy A Competitor When You Can Buy The Phone Number?

A lot of fiscally healthy contractors are taking advantage the current economy to buy weaker competitors. Sometimes companies can be purchased for little more than the provision of a job for the owner and a percent of future sales from his customer list. If the owner would make a good technician or fill a need for a service manager, an acquisition might be the best approach.

On the other hand, if the company is going under, why not let it and buy the phone number as soon as it becomes available. While it varies, the average cost of buying and forwarding a phone number runs around $30 a year.

What do you get with old phone numbers?

- Calls from old business cards
- Calls from old equipment stickers
- Calls from old invoices
- Calls from old refrigerator magnets
- Calls from old marketing material
- Calls from old yellow pages

Eric McChesney of Drain Masters Plumbing in St Louis vigorously tracks all leads. He says that 30% of his yellow pages calls come from books more than two years old. I don’t even keep new yellow pages directories, but clearly a lot of people keep their old yellow pages.

For $30 a line, buy old numbers and keep them active until they cease to get calls. At one call a year, the line pays for itself.

Whenever you discover an out-of-business competitor, call the phone number to find out when the number will be available. Enter the date in your organizer and buy the number. Why buy a competitor when you can buy a number?

© 2009 Matt Michel

Saturday, July 25, 2009

What Leads To Success

Richard St John boils down years of interviews of successful people into eight words, delivered in a three minute presentation...

The eight words are...


Would An Ad Jingle Help Your Company?

The Hobaicas think so. Years ago, Phoenix based Hobaica Refrigeration hired a company to prepare of series of jingles. Paul Hobaica played the jingles for his family to get their reactions. He said he choose You'll Lik A Hobaica after catching his kids singing it the next morning. It was sticky. It was memorable. And through the years, it helped build the Hobaica brand in the Phoenix market. The jingle is contained in the commercial below.

According to AdAge, the top ten jingles of the 20th Century are:

1. You Deserve a Break Today (McDonalds)

2. Be All That You Can Be (U.S. Army)

3. Pepsi Cola Hits The Spot (Pepsi Cola)

4. M'm M'm Good (Campbell's Soup)

5. See The USA In Your Chevrolet (General Motors)

6. I Wish I Were An Oscar Mayer Weiner (Oscar Mayer)

7. Double Your Pleasure, Double Your Fun (Wrigley's)

8. Winston Tastes Good Like a Cigarette Should (Winston)

9. It's The Real Thing (Coca-cola)

10. A Little Dab'll Do Ya (Brylcreem)

So what do all of these jingles have in common? It seems to me there are three common traits. First, the jingles are catchy. They get inside your head and you find yourself repeating them.

Second, they were pounded on the airwaves. The advertisers didn't run the jingles a few times, but over and over and over. As a small business owner you may not think you can afford a lot of advertising, but you might be surprised. Cable TV can be segmented to individual communities. The spots might only cost a few dollars each.

Radio can also be affordable, especially if you pick one station and concentrate on it to get the necessary repetition. Just make sure the station's audience matches your target demographic. If women age 35 and up call your company for service, don't advertise on the sports talk station, even if it's your favorite.

Finally, it's been years (even decades) since these jingles last aired, yet they're still memorable. Could you finish, "Two all beef patties, special sauce..." I can and I haven't heard this Big Mac ad in decades.

Build up a jingle's memorability through repetition and it will continue to work for years, even if you get bored with it and move on to something else.

Of course, if a jingle works, why would you ever drop it? Don't drop advertising just because you're tired of it. No one tunes into your name as much as you. Usually an ad is finally starting to sink in about the time the owner is sick of it and wants to try something else.

Friday, July 24, 2009

Should You Play Defense Or Attack?

A couple of weeks ago I watched the FIFA Confederations Cup, an international soccer tournament hosted in South Africa. Spain and South Africa, the losers of two semi-finals met to decide third place. Spain was heavily favored and I had the game on as background while I caught up on email. It turned into one of the most exciting soccer games played this year.

Spain was supposed to play in the championship and disappointed they were playing for third. As a result, they weren’t into the game. They weren’t having fun. For most of the match, the Spanish side looked lethargic and let the South Africans hang around.

Playing before a home crowd, South Africa’s team played above its head, attacking Spain again and again. Finally, in the 74th minute, Katlego Mphela put South Africa ahead.

Rather than continuing to press forward and attack, the South Africans dropped players back on defense to try and outlast Spain and protect their lead. Big mistake.

Spain was the European Champions and ranked #1 in the world. Shocked to be losing to South Africa, Spain woke up and pressed forward. Substitute, Daniel Güiza scored an equalizer in the 87th minute, and the go-ahead in the 89th minute.

Spain’s attacking play had put them up 2-1 with less than two minutes to go, plus stoppage time. But instead of continuing to attack, Spain’s decided to play it safe, to play defense, protecting their lead and outlasting South Africa. Uh oh.

Desperate, the South Africans returned to their attacking style. In the 90th minute Mphela scored again. When stoppage time ended, the match was a draw. But this was a tournament. No draws were allowed, so the match went into extra time. Playing another 30 minutes, the better conditioning of the Spanish side gave them an edge South Africa couldn’t overcome. Spain won 3-2.

Watching the game, I was amazed that South Africa stopped attacking after taking the lead, allowing Spain to take the game to them. As they showed in the 90th minute, the South Africans were capable of scoring again. While we can never know, I suspect the South African coach’s cautious approach cost the team the match. Similarly, the Spanish coach’s cautious approach nearly cost Spain the win.

The perfect contrast to the Spain versus South Africa match was the finals. The USA, fresh off a stunning upset victory over Spain, faced mighty Brazil. We jumped to a 2-0 lead at halftime. After half, Brazil scored a quick goal and it seemed like the emotionally drained American side appeared to deflate.

Brazil fought back to even the score, and then take the lead, 3-2. I waited to see if they would drop back and give the weary US squad a chance to equalize. They didn’t. The Brazilians kept attacking and attacking and attacking. They pressed every opening and never gave us a chance to get back in the match.

In sports we say that defense wins championships. That’s true. But we also say the best defense is a good offense. When you’re attacking, you’re creating momentum. You’re playing to win. You’re seeking gain. Even if you give up an easy score because you’re focused on the attack, you can recover by scoring.

Trying to score is also more fun. It’s more exciting.

It’s the same in business. If you’re on the offense, you’re creating momentum for your company. You focused on growth, not the avoidance of loss. You’re also having fun.

Stay On The Attack

The truth is many small business owners make the same mistake the Spanish and South African coaches made. The owners hustle, take risks, and invest in their companies. Then, once they get a little ahead, they start playing to keep what they’ve got instead of continuing to attack the market. When business pressure increases, like today, they’re even more apt to pull back and try to play it safe.

To use another sports metaphor, that’s not “dancing with what brung ya.” You become successful by the pursuit of opportunity, not the avoidance of all risk. To go turtle is to go nowhere. Worse, you risk getting caught in a downward spiral as you defend loss after loss, blow and blow. You lose equilibrium.

If you’re playing to outlast the current recession, you’re following a losing strategy. Instead, attack the market. Get aggressive. Take your successful sales and marketing tactics from the past and repeat them.

But don’t just do what you’ve always done. Try something new. Try paid search. Try local newsletter advertising. Try affinity marketing. Try shared mail. Try yard signs. Try door hangers. Try email marketing to your existing customers. Try social media. Try radius marketing.

Step up your marketing. Invest in the future and in your business.

Let the Competition Play Defense

I was in Panama City this summer and took Peaden’s Robert Wilkos to lunch. Months ago Robert sensed the market might be off because of the economy, so Robert stepped on the gas. He accelerated his marketing, leading to record sales.

As we passed another contractor’s shop, Robert commented, “Word is they’re dying. No calls. No marketing. They’re just sitting around waiting for the phone to ring.”

The contractor was playing defense. Robert was attacking. His marketing was reaching more homeowners resulting in more calls for Peaden and fewer for the competition. And I could tell Robert was having fun!

Your competitors are probably playing defense right now, making this the perfect time to attack the market. There’s less noise coming from the competition. It’s easier for your message to get through. It’s easier to cut off the oxygen of your competitors.

Play To Your Strengths

If you were coaching a football team, had a solid running game, and faced an opponent with superb defensive backs, would you air it out or emphasize the ground game? You would run the ball, of course. Hopefully, the defensive backs would move close to the line to help stop the run, creating opportunities for the passing game.

In the current economy, service is your running back. It doesn’t give you the four and five figure jobs that comes from replacements or project work, but it is solid. And, it might lead to bigger jobs down the road.

As an in-home service company, demand for you doesn’t die in a downturn, it just shifts. In fact, service work often increases in tough times. They avoid replacing carpeting and opt for deep cleaning. People avoid replacing old equipment and opt for repairs.

Do a good job on the repairs and you’ll make higher margins on the service work, plus you’ll have the inside track on the replacement. After all, replacements can only be delayed for so long. Think of it this way, the lifetime value of the customers who choose to repair rather than replace is higher than the value of those who replace now.

Remember too that you’re playing a local game. You don’t have to worry about price competition from the global village, just the village idiot. That’s no different today than last year or the year before.

The fact is people need to stay cool in the summer and warm in the winter. They need clean water on demand. They need hot water. They aren’t going to bury their backyard swimming pools. They aren’t going to live without lights.

People need service work. No one needs service all the time. But at any given point in time someone will always need service work.

And yes, DIY heats up when the economy cools off, but DIY only covers the most basic repairs. Many repairs are beyond the skills and inclination of most homeowners. And often their attempts result in even more work for you.

Unemployment may be high, but impact is mostly psychological. June unemployment was 9.5%. A year ago it was 5.6%. It seems bad and it is bad. However, it’s not as bad as it seems. Ninety-six percent of the people who had jobs a year ago, still have them. Moreover, they have money. The savings rate is 6%.

The work is out there. The money to pay for it out there as well. Start marketing for it. Try new kinds of marketing. Focus on services and less expensive products. Stress value. Go on the attack. Cut off the oxygen of the competition. And have fun!

© 2009 Matt Michel

Brand New... It's Brand U @ HVAC Comfortech

If you are planning on attending HVAC Comfortech 2009 in Nashville or if you just want to learn more about marketing your company and building your company's brand, I recommend Brand U.

Brand U immediately precedes HVAC Comfortech 2009, running from 8:00 a.m. until 2:00 p.m. on September 23. Comfortech kicks off at 3:00 p.m. You do not have to attend Comfortech to attend Brand U, but you're already in Nashville, you might as well (and the Service Roundtable offers the lowest rate anywhere to attend Comfortech).

Brand U is all about contractor branding and it features some of the most progressive contractors in the country. You will hear first hand how the built up their company brands, the challenges they faced, and how they overcome the obstacles. At the end of Brand U, you'll be singing, "I Wanna Market Me."

Learn More

Thursday, July 23, 2009

Appropriate Uses For Duct Tape

Duct tape is some amazing stuff. It has all kinds of applications, just not ducts. It falls aparts after a few years in a duct system. Below are a few appropriate uses for duct tape...

Car Repair


Prom (Yup, it's really duct tape - a colored duct tape manufacturer sponsors a duct tape prom wear contest every year)

Aircraft Repair (This is an airline based in India)

Getting Even With Your High School Algebra Teacher

Disguise (This stupid crook duct taped his head as a disguise before attempting to rob a Kentucky liquor store without a weapon - store employees apparently had a fairly easy time "subduing" him)

I hope he didn't eat a bean burrito for lunch

Fender Repair on the Apollo 17 Moonbuggy (Now I know why NASA keeps having problems with the space toilet)

Wallet (Makes it a little harder to whip out those credit cards)


Like, Your Teenage, Like, Kids

Cat Visor

iPod Repairs

Repairing Macbook Air

Replacement For Athletic Tape (Note the guy also used a substitute pro-wrap underneath the duct tape)

Bandage (Think it hurts to pull a bandaid off?)

Social Media Really Does Boost Sales

Social Media Marketing Makes More Money
Deep engagement with consumers through social media channels correlates to better financial performance, says new study.

By Michelle Megna

Does social media marketing boost the bottom line? The answer is a resounding "yes," according to a recent study that cites a correlation between brands with social media campaigns and higher earnings.

Companies that had the highest levels of social media activity -- and engagement -- increased revenues by as much as 18 percent on average over the past year, while the least active realized a six percent dip in sales, according to research from social media platform Wetpaint and digital consulting firm Altimeter Group.

The report comes at a time when recession-strapped brands are increasingly looking to social media marketing as a more affordable alternative to traditional forms of both online and offline advertising.

Interactive marketing, however, is expected to reach $55 billion and represent 21 percent of all marketing dollars spent in 2014 as advertisers shift money away from traditional media to search marketing, display advertising, e-mail marketing, social media and mobile promotions, according to a recent Forrester study.

Read More

If you're interested in learning more about how contractors can use social media, you should attend Brand U before HVAC Comfortech to hear Chris Hood from Shubee's presentation on "Branding Through Social Media" or attend the Las Vegas Roundtable October 25-27 for Bob Viering's presentation "Marketing Beyond the Yellow Pages: Dominating Local Markets With Online Marketing."

Wednesday, July 22, 2009

Creating Value

Consumer mentality has changed. People are hanging onto their wallets, saving more than ever. The savings rate in the U.S. has climbed from less than zero in 2006 to nearly seven percent in May. So the good news is that people have more money. The bad news is that it's tougher to get them to part with it.

The trick is to present value. According to Jim Thompson, Wal-Mart Canada's senior vice president of operations and merchandise, "People have money -- it's that they are looking for value. We are hearing words like customers are almost feeling guilty... frugality is the new vogue. We want to make sure that they can justify buying that item."

Wal-Mart started its summer clearance early and saw sales for the store's discounted items rise 11%. It's not just the low end products and services. In Canada, when Wal-Mart's inflatable "Bubble Spa" was discounted from $649 to $499 the company nearly sold out.

A Bubble Spa is not exactly a necessity. It shows that people will spend money, if they believe the value is there. As a small business marketer, your challenge is to create value.

Hugh Joyce at James River Air Conditioning in Richmond, VA cut the company's diagnostic to $29 in the off season to generate more calls from his customer base. The discount resulted in more than 350 calls. In the fall, James River will package their diagnostic procedure as "an energy-efficiency check on home cooling and heating systems," offering it for the same $29 price.

At Woodfin (Mechanicsville, VA), Rob Bailey eliminated overtime for Saturday service. "Saturday is just another workday. Our prices are the same on Saturday as they are on the other days of the week," said Bailey.

You don't have to limit yourself to price cuts. You can add to your offering by increasing your warranty or guarantee or by bundling other products and services.

For example, plumbers can give away a water alarm with every service call. HVAC contractors can give away outlet insulators or a package of replacement filters. Pool contractors can offer an inflatable pool toy. Electricians can throw in a dimmer switch.

For service, keep the offer low cost and easy to install. For equipment replacements and project work, consider upping the value accordingly.

But Does It Sell?

In this short video, advertising legend David Ogilvy talks about the difference between direct marketing and image advertising, which he calls "direct response advertising" and "general advertising."

It's amazing to me that there's still debate about some of the points Ogilvy makes, like:

- Long copy sells more than short copy

- Talk about benefits; don't get cute and poetic

According to Ogilvy, "General advertisers know almost nothing... They worship at the altar of creativity, which really means originality the most dangerous word in the lexicon of advertising."

This is my problem with a lot of advertising. It may be highly entertaining, clever, and original, but does it sell? Uh, no said Ogilvy.

"The trouble with many copywriters in general agencies," said Ogilvy, "is that they don't really think in terms of selling."

"They've never really tasted blood," he added.

One area where he was clearly wrong was his prediction that "The practicioners of general advertizing will begin learning from the experience of direct marketers." They never did and still haven't.

Ogilvy's love of direct marketing results from personal experience. When he started Ogilvy & Mather and broke into the New York advertising market, he sent direct mail every month to his target clients. Ogilvy knows direct marketing works because this giant of the advertising world used it build his business. So should you.

Tuesday, July 21, 2009

Las Vegas Roundtable - October 25-27

Service Roundtable members asked for a fall Roundtable. They asked for Las Vegas. We listened.

Hosted at the fabulous Rio All Suites Hotel & Casino, the Las Vegas Roundtable is a wholly new program with an equal focus on HVAC and Plumbing. This power packed two day meeting features some of the most demanded speakers in the industry, plus highly interactive Roundtable breakouts.

Nowhere else in the industry will you get Mark Matteson, Robert C. Viering, Charlie Greer, Ron Smith, and me together for a two day event. You do not want to miss this.

Learn More About The Las Vegas Roundtable

Great Example of Good Contractor PR

We know that George noticed a duck hanging out by a storm drain on Saturday and discovered a collection of ducklings behind the metal grate guarding the drain. George tried to lift the drain, but couldn't. So he called the fire department and the police. Either the firefighters or police officers freed the trapped ducklings while George watched.

This would have been the end of the story, except it was written up by the Associated Press. How did that happen?

We don't know how the story wound up on the wire services, but given the company connection, it wouldn't surprise me if George called the boss saying, "You'll never guess what happened."

The boss must have then called or emailed a reporter. Why do I suspect the boss? Because George was identified in the story as a plumber "on call for Mr. Rooter."

What does the company have to do with this? After all, George wasn't at work. He was on call. George didn't save the ducklings, the police or firefighters did. The company has nothing to do with this, other than employing plumbers who care about baby ducks.

Yet, by including George's company affiliation, Mr. Rooter gets lots of free exposure. Moreover, it gets its name associated with the warm and fuzzy feeling of saving little ducks.

On the other hand, it highlights that a plumber working for a company specializing in sewer and drain cleaning had to call the police and fire departments for help clearing ducklings out of a storm drain. While the storm drain isn't the same, it still sounds funny.

Even if the wire service picked the story up by chance, with no input from the company, it shows how public relations opportunities abound. What good deeds do your employees do for your customers? What do your employees do in their free time? What are their hobbies, volunteer activities, and accomplishments? Can you turn these into good PR for your company?

If a plumbing company can get positive PR when an employees is credited with saving ducklings he really failed to rescue, while on call, but not on the clock, anything is possible.

Read More

Monday, July 20, 2009

WaPo... Is Ammonia or Butane The Next Refrigerant?

"A bigger question: What will replace these chemicals? Experts say that some substitutes, with less global warming impact, can be made with new HFCs or by using ammonia or butane. But others are needed. "We don't know all of them yet," said Mack McFarland, global environmental manager for DuPont Fluoroproducts, a division of Delaware-based DuPont."

Of course, we know that residential air conditioning systems never leak, that all lines are sweated perfectly, every time. And besides, what harm could come from a little ammonia or butane leak in your attic?

Read More

21 Free Marketing Ideas

Bidding Adieu to R-22

The July Rant is out at Contracting Business. Here's the first few paragraphs...

In a few months, the last R-22 air conditioner will roll down the assembly line, as the industry completes the Herculean effort to redesign every product, retool every factory, and retrain every technician for the conversion to R-410A. Yet, even now, momentum is building to phase-out R-410A.

Dumping R-410A would be even more ridiculous than phasing out R-22.

R-22 was served a death sentence with the 1987 Montreal Protocol, created in response to reported thinning of the ozone layer. Urgency was based on the discovery of the Antarctic ozone hole in 1985. We were told drastic action was required to save us from species extinction, skin cancer, and starvation. What we were told was wrong.

Read The Entire Rant

Space Plumbers

The international space station is plagued by more potty problems. And the toilet clogged just when guests from the space shuttle Endeavor are dropping by. Isn't that typical?

Apparently NASA doesn't want to pay the trip charge to send a Licensed Master Plumber to the space station. They're going to try the DIY route. Since the astronauts weren't fighting to see who got to make the repairs, they drew straws and the Belgian got the crappy job.

Fortunately, there's a spare toilet. With six astronauts sharing the one toilet until the Belgian gets off the space couch (probably watching futbol), there's concern that the additional seven astronauts from the Endeavor's crew might overload the remaining potty so they're being told to use the shuttle's facilities.

Read More

Friday, July 10, 2009

Toilet Paper Trivia

Did you know that the average American uses 57 squares of toilet paper a day? Other than Sheryl Crow, I would have guessed more. Overall, toilet paper is a $6 billion industry in the U.S. alone. Here's some toilet paper trivia...

- Before there was toilet paper, the ancient Greeks cleaned up with stones and clay.

- Romans cleaned up with sponges and salt water.

- New Yorker, Joseph Gayetty, invented the first toilet tissues in 1857 using sheets of manila hemp with aloe. Gayetty claimed his invention prevented hemorrhoids and printed his name on each sheet in a branding effort that sadly, went down the drain since the Sears catalog was free while Gayetty charged.

- In 1890 the Scott brothers had the idea of using a roll and sales started rolling up.

- In 1928, the Charmin brand was launched, targeting women, which took sales to new heights. When the company bundled four roles into an economy pack, sales further accelerated.

- Johnny Carson started a run on toilet paper when he joked about a shortage in the 1970s.

What was true in the past is true today. Plumbing products do better when marketed to women. Bundling boosts sales. People can't live without plumbing products.

Read More On The History Of Toilet Paper

Want More Referrals?

John Jantsch at Duct Tape Marketing had a good post about getting referrals. Here are eight ways to increase referrals...

1. Make people look good when they refer you.

2. Give out lots of referrals.

3. Keep the promises you make.

4. Create an "experience."

5. Don't sell. Educate.

6. Deliver more in value than you take in payment.

7. Do something worthy to telling others.

8. Exceed expectations.

Read More At Duct Tape Marketing

I would add a ninth step...

9. Make it easy to offer a referral.

The 1 Deg F Difference

At 211 degrees, water is hot.
At 212 degrees, it boils.

And with boiling water, comes steam.
And with steam, you can power a train.

Watch this 212 Degree Video.