Episode #178 - Leveraging Discounts and Inside Sales for HVAC Growth

Hosted by John Wilson and Jack Carr

Introduction

In Episode #178 of Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast, hosts John Wilson and Jack Carr delve into effective strategies for driving growth in HVAC businesses. The conversation primarily focuses on optimizing closing rates, leveraging discounts, enhancing inside sales teams, and managing shoulder seasons to ensure consistent profitability.

Optimizing Closing Rates

John and Jack emphasize the critical importance of optimizing closing rates to maximize revenue. They highlight the potential missed opportunities when a significant portion of leads go unconverted.

John [00:00]: "Choosing to not optimize. It's like a ridiculous mindset. Our closing rate's pretty good and I'm like, what is it? They're like 50%. Okay, so half of your jobs are not being closed on. Well, can you close an extra 20 grand a day? And the answer is absolutely."

They discuss strategies to improve these rates, including better training and more effective sales processes.

Tracking Financial Metrics

The hosts underline the necessity of meticulous tracking of financial metrics such as gross margin and net profit. Jack shares insights into their recent financial performance, showcasing the benefits of disciplined financial monitoring.

Jack [03:08]: "We hit break even, which is huge."

John [31:42]: "Year to date we're net profitable. We're at like 14% net year to date, so I'm under."

This tracking allows them to make informed decisions and adjust strategies in real-time to maintain profitability.

Leveraging Discounts and Promotions

A significant portion of the episode is dedicated to the strategic use of discounts and promotions to drive sales, especially during slower periods.

John [06:16]: "We did a bogo. So you know, people have mixed opinions on this. But like, my opinion is I don't really care. Like, our job is to keep our installers going, basically any cost. So a bogo is like thousands of dollars off a system during a very specific period of time."

They elaborate on how bulk purchasing and negotiating better rates with vendors have enabled them to offer substantial discounts without sacrificing margins.

John [07:55]: "We did a bulk buy of equipment, which we got the price 30% off our retail price for equipment."

Managing Shoulder Seasons

John and Jack discuss the challenges of shoulder seasons—the periods between peak seasons—and how proactive management can turn these times into profitable opportunities.

John [10:07]: "Be proactive with shoulder season like this. We spend a lot of our time thinking about how to survive shoulder season...what special promo do I have?"

They share actionable advice on planning promotions, negotiating with vendors, and maintaining a steady flow of work even during traditionally slow periods.

Enhancing Inside Sales Teams

A pivotal theme is the expansion and optimization of inside sales teams to handle leads more effectively and ensure higher conversion rates.

John [18:06]: "Our cost structure is built to be variable. If I have an empty plane seat... We built an inside sales team. I think we've talked about it a bunch on the show."

Jack echoes the importance of a dedicated inside sales force, noting their impact on closing rates and overall revenue.

Jack [27:36]: "It's a salesperson. If they don't sell, it's not really a loss. If they do sell, then it's a win."

They discuss various strategies, including live closes and leveraging automated outreach tools like Hatch, to maximize the performance of their inside sales teams.

Equipment and Inventory Management

Effective inventory management is highlighted as a cornerstone of their growth strategy. The hosts explain how bulk purchasing and efficient storage solutions contribute to their ability to offer competitive pricing.

John [37:00]: "You need specific inventory ready to go. You need custom packouts ready to roll. It takes a ton of freaking work to make this thing happen."

They also touch upon the expansion of their warehouse capabilities to support increased inventory and streamline operations.

Cross-Selling and Service Integration

Cross-selling across different service lines—such as plumbing and electrical services—is discussed as a means to increase revenue and enhance customer satisfaction.

John [26:03]: "That's one of our service things. If the service is in code red, like we will mention like hey everybody, H Vac load today."

By integrating services, they ensure that customers receive comprehensive solutions, thereby increasing the likelihood of repeat business and referrals.

Achieving Profitability Goals

The hosts share their ambitious goal of achieving profitability every month of the year. Their disciplined approach to cost management and revenue optimization is presented as a replicable model for other businesses.

John [30:29]: "Year to date we're net profitable. We're at like 14% net year to date."

Jack [31:41]: "Never hitting a negative one."

They attribute their success to a combination of strategic discounts, effective inside sales, and rigorous financial tracking.

Conclusion and Takeaways

John and Jack conclude the episode by reiterating the importance of proactive management, continuous optimization, and strategic leverage of inside sales and discounts to drive HVAC business growth. They encourage listeners to implement these strategies to not only survive but thrive throughout the year.

John [33:16]: "It's all so simple. It's like, hey, you got to focus on this and just drive this lever, this lever, and this lever, and you'll get there."

Listeners are invited to join their upcoming workshop and engage with the Owned and Operated community for further support and insights.

Notable Quotes with Timestamps

• John [00:00]: Discusses the missed revenue from unoptimized closing rates.
• Jack [03:08]: Shares the achievement of breaking even.
• John [07:55]: Explains the benefits of bulk purchasing for significant discounts.
• John [10:07]: Emphasizes being proactive during shoulder seasons.
• Jack [27:36]: Highlights the effectiveness of a dedicated salesperson.
• John [37:00]: Talks about the necessity of specific inventory for same-day installs.
• John [30:29]: Announces year-to-date net profitability.
• Jack [31:41]: Celebrates the streak of profitable months.
• John [33:16]: Encourages focusing on key business levers for growth.

Final Thoughts

Episode #178 offers a wealth of actionable strategies for HVAC businesses aiming to enhance their growth trajectory. By focusing on optimizing sales processes, leveraging discounts smartly, and maintaining rigorous financial discipline, John Wilson and Jack Carr provide a roadmap for achieving sustained profitability and operational excellence.

For more insights and to join the community, visit www.ownedandoperated.com.