Geothermal Growth “These Bootstraps”

Jake Rabe

Break the IceGAOI has given you the opportunity to reel from one of the most successful guys I know in our industry.

He has been through the ranks just like most of you…if your not already there, any one of you may be in his shoes in a matter years.

Please take notes and ask questions as they arise.When you to interact you get more from the class.

Please Raise Your Hand

The Beginning

• May, 1994– Jake bought into the family business

• A “Small-town” Plumbing, HVAC & Electrical Shop

– Rural Farming Community– Population of 550 people– 3 Employees– $250,000 Annual Revenue

And now…

• With lots of hard work and focus on company goals.• For 17 years the sales numbers have increased

• Through good and bad…still climbing.• 27 Dedicated Employees• 132 Geothermal Systems installed last year• Primarily Residential• The Company is currently exceeding 6 Million in

Annual Revenue…– and believe it or not…He’s still not

satisfied?

Why are we here?• Were glad that we were asked to be here.• Not being paid to be here.

• We are simply here to share some knowledge and help grow our geothermal industry.

• We hope to help share useful insight about your growth.

• I’d really like to learn from all of you too.I’m “Never Satisfied” with what I know.

There’s always something to learn.

We’re here to share what worked for us.

• People thought I was crazy sharing what I’ve learned.• The Fact is -- there’s room for all of us.

– Loop Days for Competition– Interaction with current Competitors

• When we started, Geothermal accounted for less than 1% of the HVAC Market.

• Today Geothermal is accounting for almost 4%.• The more you, your customers and colleagues talk, the

more geo systems will get installed in your market.

What we would like to Share is;• Insight - what has worked for us.

– You may not agree with all of it.– It worked for my company.– You may only come away with one or two ideas.

• That’s good right?

• Information - allows our industry to grow.

• Idea’s - will make you think outside the box.

Who’s in the Crowd?• Installers?• Loopers?• Dist./Mfg.?

• Everyone -- Raise your hands then drop them when I pass your mark.– Less than 5 years– Less than 10 years – etc.

What do you believe…

• ALL Buying decisions come down to;– Service – Quality– Cost

• Who feels that Service is most important?• Who feels that Quality is most important?• Who feels that Low Cost is most important?

You can’t have all three.

• For me and my business, I feel that if I provide the best service with the highest quality products.– I can’t afford to be the cheapest.– I am one of the most expensive in my area.

– I employ the highest quality people

» I pay the highest wages in the area

» Provide the Best Benefits» This keeps them on board

and loyal– We have the highest closing rate in my area.

Before I can Sell Anything…

Leads

• How do we generate them?– Cross Selling (Call your techs & Start today)– Referrals, Referrals, Referrals.– Marketing– Advertising– Branding

Cross Sell Your Company

• Work leads to more work.

• Every Employee is a Sales Representative• Teach your people how geothermal works then

give them geothermal knowledge.• Provide them with material to leave behind.• When they get asked they are ready to answer

and that will get you more opportunities.

Reward the referring customer: (never expect something for nothing, if they are referring you they deserve something for there time)      -Filter program      -Gift certificate for dinning      -Cash $50-$100• At the very least CALL the person that took the

time to give you the referral and THANK them. • Realize that having a referral program is the

cheapest & best form of advertising you will ever buy!

Referral Program

Marketing & Advertising

• Develop a plan (on paper or in your head I don't care just stick to it!)

• Decide on an amount 1 to 8 percent (I currently do about 4%)

• Take advantage of marketing funds and challenge your TM's to give you more based on increased sales 

• Pay for your advertising buy increasing every bid by a set amount (I do a line item "advertising")

Choose your media – Pros & Cons

-Home Shows      -Phonebook, newspaper, direct mail, radio, TV....ect.    -Radio & TV are very invasive

"In your face or place" that are hard to avoid•      -Decide who your audience is and target them

(For me the news is really good)•      -Stay consistent with your message and buy as

much frequency as your plan allows

Marketing & Advertising

Track-Track-Track (you have got to know what is working and what is not)•      -URL's•      -Linked phone numbers•      -Coupons•      -Ask the consumer how they found you.

Marketing & Advertising

Competition• We’ve all got it.

– Competition breeds professionalism.– I don’t worry about my competition…

• They cannot deliver the value that we can.

– Therefore…they worry about me.• Were dealing with a lot of competition.

– 1994 = 4 others– 2012 = There all experts (40+)– If you want to be the low priced leader that is fine.– We don’t need every job…only the best.

Define your customer.

• Who do you want to work for?• Who don’t you want to work for?• Who is making the buying decision?• What kind of house deserves Geo?

My customer is;

• The customer that wants the most value.

“Value”

What is Value?“value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value”

What is Value…..“value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value”

“value”

“value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value” “value”

Value…..

“Value”• Who assigns Value?

– You?– Your Customer?

• Both do…but the key is you need to help them see it.

• Real Value – It’s your job to teach the real value that you

offer.

Standard Value– I approach every sale as I am selling a

“Rabe Geo System”.

– I am the single source for this type of system.• The art of selling should not be reduced

to a commodity.• Were not just selling boxes.

• OFFER SOMETHING UNIQUE!!!– Even if it is just the way you do

things.

Education builds Value

Education is more important than gaining the actual “sale”.

Even if you don’t get that sale

Amazing things that come from educating the customer.

If they remember what you taught them, they will remember who you are.

…they will remember YOU are the true professional.

This will get you more referrals.

Real Value is StandardReal Value is easier to sell.

– NOT an OPTION!

• Not a consumer choice

24 Hour Turn around for all Retrofit Quotes

10 Year Parts & Labor Duct Cleaning High Definition Stat MERV 10 High Efficiency MINIMUM Heat Gains & Loss on EVERY JOB! Energy Analysis Financing is ALWAYS Offered

These are OptionsOptions – are sold after real value is realized.

Air Purification Zoning Humidification Ventilation Loop Varieties (if applicable) Additional Services that you provide

Closing the SaleI don’t use a one call close, I close @ my business.• This brings an element of trust to the deal. • They get to see who we are.

• Gain the Commitment– When would they like the project to be

complete.– Ask for the sale with minimal down payment.– Offer ways to fund the project.

FinancingReduce their “Sticker Shock” – Use a 12 month “Bridge Loan”

$20,000 Installed Cost

$6,000 Tax Credit

- $2,000 Utility Rebate

$12,000 Net Investment Don’t write the check today…

Take advantage of our 12 Mo. SAC

Receive your Energy Efficiency Incentives

Start to Save Now and Reduce your Out of Pocket

This tool reduces customers “Sticker Shock”/“Cash Separation Anxiety”

It only works when you offer it.

Make it Easy

Use Simple Math

Establish Sub. Cont. Standards• Electrical• Loop• Plumbing

• This will expedite your proposal delivery.– Know your sub. costs off the cuff– Develop an average cost for sub contracting

• Simply based on previous projects• Track, Track, Track

Calculating “Employee Efficiency ”

Total Gross Receipts $6,200,000 Number of Employees ÷ 27Revenue Per Employee $229,629.62

Example: Pull Sheets

Calculating – “Break Even”

Total Business Expenses $1,000,000Total Billable Labor Hours ÷ 16,000Break Even Per Man Hour $62.50

Questions?

Calculating – “Profitability”

Total Sale Price $20,000 Total Material Cost $7,500

Loop Cost - $5,200 Profit $7,300

÷ 37 Hours $197.30 Per Man Hour

Questions?

Man Hours Jim 15 Bill 15 Dan + 7

37 Total

Questions?...

Comments?...

Suggestions?...

Questions?...

Comments?...

Suggestions?...

Thank you.