Company: $7.8M residential and commercial HVAC service provider.

Problem: Market integrity reputation was impacted by the quality and type of work performed by technicians.

Mistake:

  • The company had installed an incentive program for the technicians as a way to reduce employee turnover.
  • This strategy included a low entry level pay rate with an incentive to sell more to the customer even when they didn’t need it.
  • Also the incentive rate for product sales by the technician paid as much as three times their normal pay rate.

What was done:

  • The incentive program for the technicians created a culture that rewarded the technicians to sell items to the customer that they did not need.
  • It also rewarded the technician not to perform the services thus resulting in the company selling the customer a new unit prior to when it needed to be replaced.

Results:

  • Introduced a new pay structure and incentive plan for the technicians.
  • Identified the market pay rate that would allow the company to hire and retain a higher quality technician.
  • Pay structure included several different levels of expertise with an appropriate rate based on qualifications, testing and experience.
  • Incentivized the technicians to provide exceptional service and customer relations.
  • Market reputation turned around reducing customer turnover rate.
  • Quality of service dramatically improved resulting in securing new business from referrals. 

Value Driver: By reducing customer turnover, improving employee retention and increasing customer retention rate, marketing, sales and hiring expenses were significantly reduced, the value of the company experienced a sizable increase and a much improved reputation, directly increasing value.

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