light commercial light commercial time for growth commercial service, maintenance & replacement...
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Light CommercialLight CommercialTime for Growth
Commercial Service, Maintenance & Replacement Sales
“The Commercial Account Manager”(CAM)
Presented by Gary Elekes – EPC Inc.
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Who are you?
A company already looking for growth Departmental – Need Commercial Sales in a separate account. Need to Separate our commercial customer records. We have at least one successful, dedicated salesperson. Should hold frequent commercial sales meetings Dedicated commercial technician or skill set to do so Low overhead in the segment – light commercial bolts on
Residential
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Today’s Situation
Are you already in this market As a company, maybe not disciplined
or consistent in our delivery
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Available Options
Try to create a profitable stand-alone commercial business.
Focus on this market as an extension of residential (where applicable.) Have a disciplined, low-overhead
extension into light commercial maintenance, service and replacement
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Company Strategy
A company needs internal growth. Primary emphasis may have been residential. Develop growth internally.
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Commercial Strategy
Use existing resources to build a second predictable source of service and replacement revenue and profits.
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Treat It Just Like Residential!
Maintenance Demand Service Equipment Replacements Accessories
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Product/service offering
ImmediateImmediate demand service. Effective, cost-effective maintenance
agreements. Replacement of existing light
commercial units. IAQ Accessory Sales. Energy Management Control
Systems.
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Goal and Objectives
Goal Move us to a new level in the light
commercial service business. Objectives
Focus on the obvious, most profitable segments - The “Low Hanging Fruit.”
Insure you have a disciplined approach. Create a Sales Plan for the CAM.
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Sales Plan Development
Selling “Basic” Maintenance Programs. Each maintenance dollar brought in usually represents about 1/4 of the
annual billings to a commercial customer. Focus on the Maintenance Agreements… The demand service &
replacement business will come.
“If you build it; they will come.” The recommended compensation structure supports this thought process.
Note: You don’t want them “chasing” contractors for the big elephant!
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Sales Plan Development (Cont..)1st Year Projections
Contract Sales: $ 75,000.00 ( 30% Gross Margin )
Demand Service: $ 150,000.00 ( 45% Gross Margin )
Equipment: $ 75,000.00 ( 35% Gross Margin )
Controls, IAQ, Accessories: $ 7,500.00 ( 40% Gross Margin )
Total Revenue: $ 307,500.00
Revenue
Contract Sales: $ 22,500.00 Gross Margin
Demand Service: $ 67,500.00 Gross Margin
Equipment: $ 26,250.00 Gross Margin
Controls, IAQ, Accessories: $ 3,000.00 Gross Margin
Total Gross Margin:$ 119,250.00 ( 38% )
Gross Margin
Approximate 1st Year Sales Expense: Approximate 1st Year Sales Expense: $ 50,000.00$ 50,000.00 ( 12% )( 12% )
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Sales Plan Development (Cont..)2nd Year Projections
Contract Sales:($ 75,000 old $ 75,000 new) total = $ 150,000.00
Demand Service: $ 300,000.00
Equipment: $ 150,000.00
Controls, IAQ, Accessories: $ 15,000.00
Total Revenue: $ 615,000.00
Revenue
Contract Sales: $ 45,000.00 Gross Margin
Demand Service: $ 135,000.00 Gross Margin
Equipment: $ 52,500.00 Gross Margin
Controls, IAQ, Accessories: $ 6,000.00 Gross Margin
Total Gross Margin:$ 238,500.00 ( 39% )
Gross Margin
Approximate 2nd Year Sales Expense: Approximate 2nd Year Sales Expense: $ 66,850.00$ 66,850.00 ( 10% )( 10% )
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Sales Plan Development (Cont..)3rd Year Projections
Contract Sales:($ 150,000 old $ 50,000 new) total = $ 200,000.00
Demand Service: $ 400,000.00
Equipment: $ 200,000.00
Controls, IAQ, Accessories: $ 20,000.00
Total Revenue: $ 820,000.00
Revenue
Contract Sales: $ 60,000.00 Gross Margin
Demand Service: $ 180,000.00 Gross Margin
Equipment: $ 70,000.00 Gross Margin
Controls, IAQ, Accessories: $ 8,000.00 Gross Margin
Total Gross Margin:$ 318,000.00 ( 39% )
Gross Margin
Approximate 3rd Year Sales Expense: Approximate 3rd Year Sales Expense: $ 72,500.00$ 72,500.00 ( 8.5% )( 8.5% )Note: With $ 15,000.00 Base ( 7.5% )Note: With $ 15,000.00 Base ( 7.5% )
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A Reminder - Light Commercial Defined
Used in a place of business. Simple and meaningful maintenance agreements. DX air-cooled equipment of 20 ton capacity or less. Equipment of the size and design of normal
residential. Equipment your staff is comfortable servicing and
installing.
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A Note on Service Quality
Responsiveness is a given in this market.
Top priority of customer service and dispatcher.
Separate light commercial from residential.
Dispatcher has to assess skill sets of technicians.
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Pricing
Standard RTU Man hours per visit
5 Tons or less = 1.5 6.25 -10 ton = 2.0 12.5 - 20 = 3.0
Service Agreements 40 - 50% GP Replacement 30 - 40% GP
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Promotion
Well-trained light-commercial sales people Build your referral network
Notify your satisfied residential customers who might have businesses (USA customers.)
Build relationships Yellow pages Existing Advertising
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Commercial Account Manager
Compensation program???? Job Description/Expectations/Plan
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Account Manager Job Description
1. Consistently approach NEW prospects.(3-7 per week) 2. Transition customers from “un-planned/demand” service
to an USA. 3. Provide total customer service function for key accounts
Provide a SINGLE contact for all account needs.
4. Communicate internally with ALL production
departments to insure what is sold is delivered.
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Commercial Technician Spiffs
Compensation Replacement = $50 Preventive Maintenance Agreement
>$1000 = $50 <$1000= $25
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Commercial Technician Job Description
Why are they different
They perceive themselves to be elite among technicians. They must have good written above oratory skills They typically have skills that allow them to receive higher pay They have a broad range of diagnostic and repair skills
Required to work on various sizes, brands, & styles of equipment-Greater variety than Residential Service
Must play a “role” in a stream-lined communication process that includes : Customer, Account manager, Dispatcher, and Management.
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Weekly Review is a MustWeekly Review is a Must
Think about Light Commercial Service separately Customer Development
Existing Customers Prospects Sales Leads
Quality Service
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Start your discipline now
Start with existing customers Segment your database
Keep score of progress Maintenance agreements sold Demand service Replacements
The forms
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Make a good decision
Are you ready for this step? Are the core competencies of your business healthy? Do you have the right technicians? Do you have control of your dispatch? How about your salesperson?
Focus on the type of equipment you can manage.
Get the right people in place.
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Vision Statement - Long term
Maximize service profitability by achieving excellence excellence in light commercial service and replacement & accessory sales.