Thursday, April 30, 2015

If God wills.....

Nobody can refute the statement that things can happen in this world only if God wills.

Your selling an air-conditioner or for that matter any product can happen only if He wills. But our sincere effort should always be put.

A customer wanted some products and he contacted the company. They referred the customer to me. I telephoned them (a store) and offered them a price - lesser than a dealer price. He said he would come back.

After sometime my friend spoke to him and the customer bargained for the price. Eager to do "some" sale my friend lowered the price further and the customer said "God willing" he would send the money and  transport
to collect the items.

Little while later my office contacted them and asked them the billing address so that they could type the bill and go home. Customer said he would "God willing" get back in five minutes.

A minute later he (the very same customer) rings us up (not knowing that it is the very same company where he has just finalized his deal) and asks, "What would be the best price for...."

God willing he might get a better price or God willing he might come back to us. Maybe God has willed that we should not sell the product at a thinner than wafer margin!!

Wednesday, April 29, 2015

Offer credit - but selectively.

Offer credit - but selectively:

No business can thrive without offering some credit. Selling air-conditioners is no exception.

But it must be done with lot of care and due diligence.

A company in Alwarpet approached me recently and I gave my quote.
The customer wanted a week's credit which I refused.

The next day there was a phone call from Singapore ( I knew it was a call from another country from the number displayed on my mobile). The manager of the company spoke to me politely and requested that time
be given so that he could bring the cheque along with him.

I asked him to confirm by mail and also send his company's web-site URL before I could agree.

He did so and I found the company to be a leading company based in Singapore and distributing among other items coil winding machines and so on.

I agreed, supplied the air-conditioner and got the payment on dot.

Sunday, April 26, 2015

If your hands and dress are dirty - you are a serviceman!

When cleaning, repairing, servicing the air-conditioners your hands and dress will get dirty!

That is the path you have chosen. In the process of cleaning and servicing your hands and dress will get dirty - that is part of the game.

My friend is a multi-millionaire and he did business in U.S.A. for over two decades. 73 years of age, even today, in Chennai he keeps his first business - an air-conditioning service shop, still running. As soon as he enters his shop he would get into the repair section and do something or the other. That is the love of work.

His brother describes him best: "He will run and make you (others, his workers) to run."

In facebook you would have read about the Japanese consultant who came to Taj group of hotels. People at the hotel wondered what new concept he would teach. He went around the hotel and saw in the pantry many dirty plates. He immediately started cleaning them. Come on - let us clean was his mantra. To serve guests with clean plates it is not necessary to have huge stock of plates - rather, you should clean them then and there to reduce the cycle time.

Another observation doing the rounds is about Infosys founder cleaning his own restroom and car....

A young mechanic wanted a job and said that he had worked for a month in a leading Air-conditioning company. I asked him, "why only one month?".

He replied: I am asked to clean filters and air-conditioners. I want to do all kinds of repair work.....

Cleanliness is next to Godliness. Clean the filter as nobody in this world can do a better job than you and then see your growth!!

Have a nice week ahead!

Saturday, April 25, 2015

Thanks to on-line businesses (COD) !!

Thanks to on-line businesses (COD)!!

Yesterday (Saturday) a customer rang up and discussed his purchase
of a 1.5 ton air-conditioner.

He told me that he didn't want to damage the wall and whether we could take the pipes through drilling hole in the wooden frame of window. I said that that is not possible.

After a lot of discussion he said, " You send the machine and your person with swiping machine or collect the cheque".

During the discussions, I could guess the customer as a fastidious person.
Also, I was not sure whether his cheque would get through.

I told him that he could transfer the money on-line. He then again asked: Don't you have payment options in your place? What are the offers and so on.

After a while he said that he has transferred a test check for Re.1/-
and that after confirmation he would transfer the balance. After an hour he asked whether our account had been credited.

After nearly a day and innumerable checks, the Re.1/- has still not reached me.....  Hope it will happen soon.

On-line business with huge turnover and Angels giving them millions can blindly give COD for goods ranging from Rs.200 onwards. People like us cannot afford that you see!

Order booked - supply refused.

A few days back a customer rang me up and said that his boss
had decided which model of 1.5 ton split air-conditioner they wanted
and also that they should source it only from a nearby authorised

I gave them a good price and after sometime the customer agreed
but just asked me to send a technician to see the site and decide
how the unit is to be fixed.

My engineer went there and saw that the area was large - 370 sq.ft.
with a wooden partition having a full length opening of about 9" at the
top.  They wanted the indoor to be fixed mid-way so that both areas
will get cooled.

Customer was advised that 1.5 ton would not be sufficient and they
could either go in for two units or one 2 ton unit after widening the 9" gap.

I sent them a mail explaining this and also phoned them about it.

"O.K. Sir, but we can only buy what our management says" was the reply.

I told them politely that we cannot supply one unit of 1.5 ton air-conditioner.

Friday, April 24, 2015

Many a slip between the cup and the lip.

The Tamil equivalent for the above is: Kaikku ettinathu vaikku ettavillai.
(What reached the hand did not reach the mouth).
It was the famous cricketer Krish Srikkanth who once said something better than this. Vaikku ettinathu vaiththukku ettavillai. (What reached the mouth did not reach the stomach.)
Two days back I was in similar predicament.
About a month back a customer about 60 kms from my showroom rang me up and wanted a freezer. Also he felt that if he took it from me the transportation would be high and wanted me to suggest a nearby place.
I told him that I would help him out. With some difficulty I located a dealer located just less than 10 kms from his place and asked him to supply.
(After supplying the person did not have the courtesy to thank me for
giving him some business! Such are the days !!)
Two days back the very same customer rang me up and said this time he wanted a freezer about 3 kms from my residence. I told him I have the product in stock and I would supply him the same.
He was happy. He said he was going to a particular place to buy some
equipments and he would contact me in the afternoon.
Then and there I knew that I had lost the business. Because the place where he went to buy the equipments - they also sold freezers.
The customer did not call me again. A business gained by goodwill and lost by present day business dynamics.

Payment collection - Tatasky way !!!

Whatever business you are in payment collection is an important
aspect. All outstanding payments have to be collected in time.
Recently I switched over from cable connection to DTH.from Tatasky.
They send payment reminder by SMS, follow it up with e-mail. Then
they send messages through TV. To top it all up they phone customers
and follow up for payment.
My monthly payment due is on 29th and today is 24th. I am prompt in
making payment. And of course these guys have the unique way of
disconnecting your connection !!
One guy telephoned me today and said your payment is due on 29th and when are you going to pay? I said today is 24th and you have reminded me so many times in so many ways, don't you worry, I will make the payment. Fine, nothing wrong so far.
Again after two hours another guy phones me and says payment? I asked him: Are you mad? Now when I walk on the road are you guys going to come from three different directions and ask me for the payment? One guy just a little while ago phoned me, so don't remind me again!!
With great difficulty I restrained myself giving a bit of my mind.

Thursday, April 23, 2015

Interesting customer-salesman dialogue!!

Customer: I want to buy a 1.5 ton window air-conditioner.
After explaining,
Customer: What is the price?
Me: Rs. xxxxx for the air-conditioner, Rs. xxxx for the stabilizer...
Customer: You mean, you are going to charge for the stabilizer?
Me: Yes, ...
Customer snaps the line.
(1) Customer is happy he has not been taken for a ride.
(2) I am happy that I need not incur a negative margin on sale!!
This is what management jargon would say: Win-win situation !!

Thursday, April 16, 2015

Why SSDs lose sales....

We(SSDs)  tend to blame the market for low sales.

Market is dull. Market is not picking up. Summer has not started and so on.

Whatever it may be, let us see how we can retain the business which comes our way.

One of the main and may be the only reason sales is lost is because of pricing.

Here are some of the pitfalls.

(1) (Example) Customer rings up and asks the price of 1.5 ton 3 star split ac.
Our salesman may say Rs.30,000 let us say. Immediately the customer says: "But ABC company quoted only Rs.28,000."

Without a thought our salesman believes that! That is the problem.

To counter that the salesman has to THINK.

Is the customer comparing apple to apple?
Who is ABC and what is his pricing for the product?
What are the things included in the pricing of Rs.28,000?

If the above are probed chances of losing the conversation and the sale are slim.

(2) (Example) Customer says: "ABC offer is Rs. xxx. How much can you reduce?"
Your salesman says: "I will check with my Manger/owner and tell you".
Then and there your sale is lost. Because you have given an impression that
reduction is possible!!

(3) Your regular customers who buy units every year are very important customers. Be in
close contact with them.Help them in choosing the units. These days customers rarely stick
to the same brand. Even in the rare case of they buying from somewhere else, you will
still retain the customer and may be install the units and maintain them after the guarantee period.
(One customer recently purchased a unit from me but insisted that his regular mechanic only
should install it.)

(4) Don't let your salesmen give out prices from the price list in parrot like fashion.
Example: What is the price for 1 ton 5 star AC?
Answer: Rs.35,000.

"Yes Sir, thanks for calling, we have 1 ton 5 star unit. Are you sure you need a 1 ton
air-conditioner? Where are you going to fix it?......

Chances are the customer may actually need a 1.5 ton ac!

to be continued...

Thursday, April 9, 2015


Offering goods on credit is one way of increasing business.

I have also been involved with business to the electrical industry for many years. The payment from electrical industry is very poor.

What you see as ALSTOM in Pallavaram was years back known as The English Electric Company of India Limited. We offered to supply them hylam (Formica - electrical grade) components to them. It is a simple job of buying hylam sheets and cutting and turning them to different sizes.

They said payment will be made in 90 days and we agreed. But.... there was a catch. You have to submit the bill after 90 days.So, the credit period offered is actually 90 + 90 = 180 days! (six months).

Still we agreed because it is a very reputed company and payment will be made as promised. We decided, we will have to provide working capital for six months and after that we will get payment regularly every month.

Today, in the AC and other business which mainly involves supply (no value addition) credit cannot be given. Even Government bodies which used to pay in 30 to 40 days began to approach retailers to buy air-conditioners against advance payment!  (Retailers don't give any credit).

Recently a very reputed paint company with a yearly turnover of more than 2500 crores approached me to buy a water dispenser. They said payment will be made in 15 days cycle. I refused to the terms and told them that as per our policy they have to make either advance payment or if payment against delivery they should first send us a scan copy of the payment cheque so that we can be certain that payment is obtained against delivery.

After two months they came back and send a copy of the cheque, which we collected against delivery.

As my friend often says: "No money - no honey".

Dear friends, it is better these days to supply only against payment.

Happy selling!

Customers are slippery !!

These days customers are slippery. They may not care about relationships in the past. It is only price.

A customer was asking me an air-conditioner for his children's room.
As we spoke he told me that he knows our company and proprietor quite well and that we used to buy drilling machines and other tools from him.

His house is situated less than a kilometer from our showroom.

When discussing about price he agreed that margins are very, very low and that the price quoted by me was not bargained.

These days at the very first instance we quote the lowest possible price, lest the customer gets out of our hand.

He said that his daughter wanted only a red colour panel. The next day I informed him that red colour was indeed available.

When I later phoned, his office informed me that he is out of station and would be back after a week or so. Again, I phoned two or three times but on every occasion he was not available.

Today I phoned and he came on the line. The person who was earlier cordial was as distant as possible. " I asked my office to take the unit from you. Did they not contact you?"

He is a small shop owner and buying unit for his house. Can't he just tell me that he has purchased the unit??

I didn't want to embarrass him. I told him politely: "If you need a unit, you may contact me anytime".

I disconnected and banged on my table. Mild pain in my wrist !!

Wednesday, April 8, 2015

SSDs - How to get more business

One reason SSDs could increase their business volume was
because of permanent staff and good relationship.

When there is service required, the customer will ring up a
particular person in the company. For that customer even if
there are five mechanics in the firm, only either mechanic A
or B will be allotted the job of going there.

Nowadays if a new unit is installed on day one and on day two
there is a small service issue to be looked into, chances of the
the technician who went on day one going again is very rare.

Though the job is done, it is not an ideal situation. There is no
bond created between the customer and the company.

Choose some of your big ticket customers like say a Bank, or an
Insurance company, a hospital, a hotel or an IT company and so on.

You as the owner and key person who is always going to be there
should visit the client at-least once in a month or two to keep the
relationship strong and dynamic.

You could very well see your business growing.

Good luck!

Monday, April 6, 2015

SSDs - "Death" of the Salesman !!

During the rise of the SSDs the salesman played quite an important

He was involved in,

(1) Attending to the customers who walk in (if there is a showroom)
(2) Going on cold calls - area wise.
(3) Preparing and submission of quotes and follow-up.
(4) Oversee the delivery of the product, installation
(5) Some general office work

Thanks to the IT culture and other developments all around us
this has completely gone hay-wire

(1) These days, the footprints in smaller single SSD showrooms have
reduced significantly.
(2) Salesman are reluctant to work long hours. (The job of a Salesman is 24x7, but who cares?)
(3) Salesman are reluctant to go on long trips for cold calls. They feel it is "demeaning". The owners are not sure if they really put in so many cold calls or just go to the nearby cinema hall !
(4) The "cost" of the salesman is prohibitive. (For example, if you pay around 15K to a salesman will he be able to get you additional business of around 50 machines?? No way!  Also, Rs.300 per machine cannot be allocated to the salesman alone!!
(5) Salesman used to also get AMC contracts. This has become a thing of the past.
(6) Quotes are nowadays 95% oral and only 5% in writing (to Corporates).
This can be done by the owner himself.
(7) Delivery is by contracted vehicle and installation is mostly by contractors. No work here for the salesman. (As a "salesman" I have helped in lifting the machine, going along in the vehicle, delivery, arranging carpenter, buying wood from nearby shop, sitting through all along and waiting till the machine is installed and run ! )
(8) Office work? If a salesman is asked to deposit a cheque in the nearby bank, he will look around for a mechanic or offic-boy (if there is one) to do the job.

I can go on and on.  God save the SSDs.

Saturday, April 4, 2015

SSD Model is no longer sustainable - Part XII

It was seen that the rise and fall of SSDs can be attributed to Sales.

The revenue from Sales/Service being around 70/30 revenues have dropped because
the realisation per machine has come down drastically.

SSDs could get back to the growth track if:

(1) They do not resort to selling only air-conditioners. The units should be sold only
if installation income of Rs.1500 plus is received with each unit.

(2) All installation should be done by SSDs own team.

(3) Overhead expenditure has to be cut down as much as possible.

(4) All activity to be concentrated within a radius of 5 or 10 kms depending
upon the size of the SSD.

(5) They should concentrate on building the team of technicians, who stay and
grow with them. (This is easily said than done!!)

(6) Last but not least, they should scout for alternate sources of income. (some
other associated business).

Thursday, April 2, 2015

SSD Model is no longer sustainable - Part XI

Advertising will no longer work!

When the internet reach was limited, when the wholesalers and retailers had not entered the market in
a big way and when the brands were limited AND there was good demand for air-conditioners,

the Sun was shining for the SSDs.

(a) They got very good leads from their Principal's to sell air-conditioners without much effort
or real salesmanship at play,
(b) They advertised in Yellow Pages and got very good leads,
(c) Companies and institutions encouraged dedicated suppliers for air-conditioners (SSDs),
(d) Small advertisements released periodically in local newspapers and national newspapers
(e) Road shows and melas held in vantage places were productive.
(f) Banners put up in important places drew the attention of many.
(g) 10 to 15% sales occurred due to co-dealers sourcing machines (though at a minimum
or nil margin this helped in the number game).

Good. But unfortunately today none of the above (a) to (g) is going to help in even selling
a few machines!!

It is time SSDs give up the number game and sell machines only to those who do not mind
giving Rs.1500 for installation (splits) and a reasonable margin of around Rs.2,000 on the
cost of the air-conditioner and stabilizer which after providing for transportation and VAT and
Service tax will give a gross margin of around Rs.1000 per machine.

Some years back when margins from AMC, repairs etc was quite good, I used to say that
that I will sell at times an air-conditioner even with a margin of Re.1/=.

I will never ever advocate this to a SSD today!! Times have changed.

Now we have to change ourselves? How?

to be continued...

Wednesday, April 1, 2015

SSD Model is no longer sustainable - Part X

SSDs used to get workers and helpers locally.

No longer is this possible. Even if we get workers they do not stick for more than three or four

An SSD was looking for one or two helpers. Somebody said that they could get hard working guys
by "out-sourcing."  They could get them from other parts of the country. We have to give them
accommodation and wage of 10K per person per month. Also they would come as four people. Not less.

We do not know about such guys. When we give accommodation, we become responsible for their
behaviour. As it is SSD burdened by many issues, how can we take this burden also?

For four people the total cost for the company would come to around 60K.

How much incremental business are we going to do to get around 100K and pay these four guys
60K? They have no skill-set except maybe lifting the machines and cleaning the place and some
such odd jobs which are not directly revenue yielding....

Also language is a problem.

It just does not work out at all.