But technicians can improve their earnings by applying some practices to their everyday routine.
Chris Reak, an hvacr instructor at Northwest Technical College (NTC) in East Grand Forks, MN, says that in order for technicians to get paid more, they must bring in more money for the company. Reak should know. He has been in the hvacr field since 1983, and has been a technician and contractor, as well as an educator. He recently wrote a book called Tech to Tech: An Informational Guide for HVAC Technicians to Increase Their Earnings.
“Every non-technical seminar I have attended has concentrated on how the company can make more money, not the tech,” said Reak. “Tech to Tech was written to increase the technician’s pay.”
Reak also says that the tips in his book will benefit owners, service managers, and trainees.
“Most technicians don’t understand the money trail,” said Reak. “The money comes from the customer’s bank account and goes into the company’s bank account. Then it goes from the company’s bank account to the technician’s bank account. Without the first deposit, you don’t get the last deposit.” So Reak encourages technicians to sell more for the company. “I’ve developed methods for technicians to apply their skills to increase their value and not take advantage of customers.” Reak asserts that the more money that is honestly brought into the company by a technician, the more valuable the technician will be to the company.
“Tech to Tech covers other needed issues such as customer service, customer needs, paperwork, attitudes, and a wage formula, so technicians can calculate what their pay should be,” says Reak. “It will be hard to increase your value if you do not know what your present value is. It takes more than improving your technical skills to increase your value.”
Sidebar: Increasing Profits With The Shelf Method
A technician does not have a 20,000-sq-ft building to invite customers into to see what they are offering. They operate out of a service truck, which has affected the mentality of how our industry does business. Troubleshoot the equipment, fix the problem, be professional with the customer, collect the money, go to the next customer, and do it again. This way of operating a business is limiting the technician’s pay because it is limiting their invoice totals. Technicians have to create a “shelf” and help the customer visualize what is on it.Wal-Mart has huge buildings full of products on shelves. If you were looking for a light switch, you would find on one end of the shelf a generic light switch for $0.78; on the other end of the shelf, you would find a nice, decorative light switch for $5.98. Between these two light switches on the shelf, you will find many other light switches priced somewhere between $0.78 and $5.98. Each light switch has its advantages and disadvantages, depending on what the customer is looking for. The customer has to make a decision on which light switch is right for them.
Technicians have not been trained to create such a shelf to present to the customer. This limits the customer’s options, which limits the technician’s sales, which limits a technician’s pay. Creating a shelf is not difficult and requires only a sheet of paper, a pencil, and some brochures.
Let’s create a service call. The example will be billed in an hourly format using $40 per hour for simplicity in calculating, but works just as well for flat rate by adding extra tasks. A condenser fan motor has failed due to bad bearings on a 2-ton a/c unit, which is 11 years old. Using the old way of doing business, our invoice would look like this (prices used are just for the example):
Fan motor $95
Capacitor $8
Labor $80
Total $183
On our invoice, we explain that the motor and capacitor come with a 1-year factory warranty or whatever it may be. We would collect $183.00 and go to the next call. There is the problem: The technician has limited the sale. The customer has no other option but to replace the motor.
The whole job took two hours, so the sales per hour ($183.00 divided by 2 hours) is $91.50.
Now, what if, instead of replacing the fan motor instantly, the technician took 10 minutes and created a shelf on a piece of paper to present to the customer? The “shelf” will contain the first option, the $183.00 repair listed above, but will also include a second option.
OPTION 2
Fan motor $95
Capacitor $8
Chemically clean condenser $15
High-pressure safety control $45
Low-pressure safety control $45
New fan blade $36
Labor $120
Total $364
As the technician presents this option, along with warranty information, he or she should explain the importance of a clean condenser and the need for the safety controls. If the fan blade is out of balance, it should be pointed out that this could adversely affect the bearings in the motor. Now let’s look at the sales per hour. Let’s say this option took three hours, so the sales per hour ($364 divided by 3 hours) in this case is $121.33. The technician has increased the sales per hour by $29.83.
Our shelf is not full yet.
OPTION 3
New lower-brand condensing unit installed: $1,300. If this takes four hours, sales per hour is $325.
OPTION 4
New name-brand 10-SEER condensing unit installed: $1,600. If this takes four hours, sales per hour is $400.
While presenting options three and four, a technician must be accurate in presenting the advantages of purchasing a new condensing unit, such as the warranty information of not only the manufacturer, but also the labor warranty of the company they work for. (Note: the sales per hour should not be listed on your paper. It is listed here to show you the opportunities you are missing to increase your invoice totals.)
There is still plenty of room on our shelf. How about adding the options of a higher-SEER condensing unit or a R-410A condensing unit? These require the sale of a new evaporator coil and new refrigeration lines. Take the time to explain the advantages of each option that is on your shelf. Explain the importance of energy-efficient units and environmentally safe refrigerants to the customer. You are not selling them something they do not need; you are offering them options. Do not prefer one option to another. Let the customer decide what is best for him or her. They may choose the $183 repair, but they may choose to replace that old air conditioner.
Increasing your invoice totals means increasing your value to the company. And increasing your value to the company will increase your compensation. Apply the shelf method with an understanding of your customers’ needs, and your income will no longer be limited.
— Chris Reak
Publication date: 01/14/2002
