Q & A with PHCC member Jim Deiter
Jim Deiter is Vice president, Deiter Bros. Heating, Cooling & Energy, Bethlehem, Pa.
Q. How was your company impacted by the economic downturn of the past few years?
A. Like most companies, we experienced revenue reductions so we trimmed our employee workforce by about 10 percent through early retirement offerings and attrition. We also held overhead down wherever we could and shifted some outside costs like traditional media advertising into more cost-effective e-mail blasts and other web-based communication.
Also, consumers were obviously looking for greater value and new ways to save money, so we introduced new financing options for installations and new payment plans for fuel. We also cast a wider net for HVAC work in both the consumer and commercial sectors, communicating to the market that we provide sales, installations and service for all HVAC systems and all fuel sources, not just those in our traditionally recognized core of oil-fired equipment.
Q. Were the expansion of your offerings and services related to strategies to overcome effects of the downturn?
A. They probably had more to do with the need to diversify beyond fuel oil than they had to do with the economic recession.
Q. What types of preparation and training did your company undergo to diversify into propane sales and delivery?
Naturally we had to purchase a bobtail and a utility vehicle as well as our first truck load of tanks. Training was critical. All employees received industry training provided by the National Propane Gas Association’s CETP, (Certified Employee Training program), training programs.
A. Did you need to increase the number of employees when you added this service?
Yes. We started with the addition of an experienced propane division manager and two full-time drivers. Then we acquired a propane company operating in our region, which added another two customer service reps as well as delivery and service personnel. We’re continuing to add as we grow.
Q. How are you marketing your heating and cooling mechanical services to Deiter fuel customers?
A. To our existing customer base we have a quarterly print newsletter, weekly e-mail messages with Customer Only Offers and stuffers in our regular stream of monthly invoices. For the overall marketing to attract new customers and continue to build the Deiter Bros. brand, we use targeted mailings, radio, cable TV, local magazine, newspapers and some outdoor. Our own fleet is also a valuable marketing resource, so we do vehicle wraps on a consistent basis as well.
We also have a Rewards Points program which incents customers to upgrade their heating and cooling systems. Customers can track the accumulation of their Deiter Bros. Rewards points online and time their redemption to their need for new heating or cooling equipment or services.
CUSTOMER PAYMENT PLANS
Q. What types of preparation and training did your company undergo to begin offering payment plans to customers?
A. We’ve been offering our BetterWay (budget) Plan and PrePay Plan since the 1980s so that’s been part of our discipline for decades. We introduced our Price Cap some years back as well, so that is fairly automatic. When we introduced the PayGo Plan, that took some educating for our staff and customers and may for a while yet because it is a fairly revolutionary concept…but its ability to attract new customers is worth the investment of time and communication resources.
Q. Did you need to increase the number of employees when you added this service?
A. No. The workday may have intensified somewhat during the initial learning curve of the PayGo program…but that comes with the culture of our family business.
Q. For the PayGo Plan, how are payments received—online, credit cards, checks?
A. All of the above.
Q. What process is followed if a customer is delinquent on payments?
A. If a customer is on a payment program and is delinquent, they are typically removed from the program and put on delivery hold until payment is made or we work out a payment plan with them.
Q. What has the response been to customer account management via mobile phones?
A. Definitely growing, particularly with younger customers. We are fortunate to have very sophisticated billing software, (Bluecow Ignite), which integrates perfectly with our web backbone so we have been quick to capitalize on this service medium. And it’s only going to become more prevalent. When a growth trend is as inevitable as mobile device ordering and provider selection, we embrace the opportunities it presents.
Q. How has your membership in PHHC assisted you in your business management strategies?
A. PHCC gives me a window into best practices of the industry and techniques my peers are using to overcome challenges and succeed. It also keeps me informed of regulatory and compliance issues that are vital in our day to day operations. Membership in PHCC has proven two very valuable lessons to me---First: information is power. Second: there is definitely strength in numbers. By working together as contractors, we strengthen the overall quality and proficiency of our individual companies.
Q. What kind of advice do you have for other PHCC members related to:
A. Diversifying services: Evolution is the key to survival. Consider any diversification that meets the rules of strategic growth, prudent economics and common sense.
A. Offering convenient payment plans to customers: Absolutely. Take a page from the creative financing playbook of the auto industry. Working with your manufacturers or finance entities, by “bundling” services or using other creative payment options, there’s generally a way to make paying easier for customers and still keep your own operating margin within reasonable parameters.
A. Identifying new innovations that may work for their business. Through strategic partners like PHCC, stay informed on what other companies are doing. When you see changes happening through regulations, market conditions, commodity markets, etc., realize that somewhere in there is usually an opportunity that will fit the product/service mix and operating protocols of your company. Stay optimistic about finding those opportunities.
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