Contractors spend hundreds and thousands of dollars to improve their profitability. They invest in training, software systems, association dues, seminars, and consulting fees. And it isn’t just money they are spending to make a more efficient and profitable business model - they are spending a lot of their time, too. Maybe they spend too much time looking inward at what they can do to improve their bottom line when the best answers can be found amongst their competition. Some of the best business ideas are those being used by your competition.

There are some geographic regions in the United States where contractors have good, strong local organizations, where it is not uncommon to see competitors listening to the same advice from business consultants and guest speakers at meetings. These contractors put aside their competitive urges and network with others in order to raise the bar of professionalism. I see that in my own backyard with the Southeast Michigan Chapter of the Air Conditioning Contractors of America (SEMIACCA). These owners work together on community projects and promote the HVAC trade in the general media.

I’m also sure that one or two (or more) use this forum to see what the other members are doing and what is working for them. Call it friendly spying.

YOUR OWN FRIENDLY SPYING

There are many marketing groups that sponsor “mystery shopping” where retailers are shopped by people paid to observe the quality of the service and products, and then report back to the marketing groups. These groups, in turn, give the retailers who sponsor the mystery shoppers a report card on how well they did. I’ve heard of HVAC contractors who use a similar tactic. They hire people to call their own businesses, asking about products and services, in order to find out how potential customers are treated over the phone. It’s a very good way to spy on their own employees.

But spying should not carry a negative connotation, especially if you are spying on your competition. I would bet that many contractors call up competitors to see how their employees handle a phone call or to see what kind of specials the competitor might be offering.

You don’t do that? Why not?

You can’t always judge a book by its cover or a company by an ad in the Yellow Pages. Sometimes it takes a little digging to learn more about a business. If your competitor is not willing to share best practices with you - and who could blame them - you may need to find a way to get that information via spying.

If you notice a new look to your competitor’s logo, jingle, service vans, uniforms, or media ads that is a sure sign that they are shaking things up. Maybe their own business formulas aren’t working and they are trying something new. Maybe they are building on some of their strengths and eliminating some of their weaknesses. In any case, it might benefit you to know why your competitors do what they do.

Have an employee, family member, or friend call up your competitors with questions about products and services. If you are a little bolder, ask the same people to call up homeowners who recently had work done by your competitors, using the guise that they are looking for a referral for a good company for themselves. If you are really bold, ask your people to park their car near a competitor and report on the activity, i.e., showroom traffic, number of trucks going out each morning, supplier deliveries, etc.

THE PROOF IS IN THE PUDDING

Now that you have armed yourself with the most important thing any business could have - information - you are ready to make some comparisons to your business.

Is there anything your competitors are doing that is better than what you are doing? Do you see a pattern of success from something your competitor has historically been doing or from something they recently began doing? Does it seem that your competitor has no trouble attracting new employees while you struggle to find the best workers? And speaking of workers, does your competition encourage certification among its techs and installers; and advertise that fact? Has your competition started any ad campaigns to raise top-of-mind-awareness (TOMA) or changed prices, either up or down? Does your competition carry similar brand name equipment and what kind of warranties do they offer? And what about service agreements?

The list of questions can go on and on. But the point is, would you rather leave these questions unanswered or would you rather have your spies create a little espionage in order to improve your business model? I vote for the latter.

Publication date:02/26/2007