Wide Range of Skills, But Service is Its Product

By Jill Tyrer

You might think that selling air-conditioning services in Florida would be like selling snow shovels in Buffalo or like selling water in the Gobi Desert.

You would think that until you opened the Yellow Pages — and pages, and pages — and found how many other people have had the same idea. Southwest Florida has no shortage of companies in the air-conditioning business. Some of the names are familiar, a few are new, and many won’t appear on the list in the next year or two.

In such a competitive industry, it’s not so easy for a company to stay alive — much less to thrive.

One of the area’s largest companies, Modern Service for Home and Business, has succeeded by shifting its focus from strictly air-conditioning/heating systems to customer service. And how can it improve customer service more than by offering customers more services?

Now, in addition to its heating and air-conditioning business, the company offers sales, service, and maintenance of appliances such as refrigerators, ice-makers, ranges, washers and dryers, as well as electrical service, plumbing, and ductwork. One branch deals specifically with refrigeration and ice machines; most recently, Modern launched a general contracting division to handle the plumbing, electrical, air, and other needs for small additions to buildings, renovations, and remodels. In short, Modern Service for Home and Business takes care of the behind-the-scenes technology necessary to keep a home or business functioning comfortably.

“If a little old lady wants to hang a fan or run a phone line to the back room, we can do that for her,” says Ken Sammons, president of Modern Service.

All those elements, though, contribute to the company’s real product — customer service.

“That is one thing we really preach here,” says James Glennon, president of the Florida operations for Elliott-Lewis Corporation, which owns Modern Service. “Although we have these various entities and departments, the reason we do that is because we really feel our core business is customer service. We just keep expanding the ways we provide service to our customers.”

The business started in 1965 as a one-man air-conditioning operation in Fort Myers, and was eventually bought by Philadelphia-based Elliott-Lewis Corporation, which has subsidiaries in Pennsylvania, New Jersey, and Florida. Modern’s Florida sisters are Anderson Service for Home and Business in Venice, and Airdex Inc., which serves the Tampa-St. Petersburg area. In 1998, FirstEnergy Corporation of Ohio purchased Elliott-Lewis and its subsidiaries.

Ironically, one of the company’s biggest challenges has been overcoming its reputation as strictly an air-conditioning business. “Because of our long standing in the community, we are known as Modern air-conditioning,” Glennon explains.

Testament to the company’s longevity and community involvement is displayed in the training room at its Billy Creek Commerce Center facility; pictures and plaques show various sports teams it has sponsored over the years — baseball, football, soccer, gymnastics. Another wall is hung with awards pronouncing Modern as “No. 1” in Amana sales in Florida, explains Sammons.

Glennon had been with Elliott-Lewis for about nine years before he joined the Florida operations in 1989, when Modern offered only air-conditioning and appliance repair. In the past four or five years, the company has added the other divisions and evolved into Modern Service, which has proven a profitable move. In the past three or four years, “we’ve grown at a rate of 9 to 11 percent every year. We’ve been ahead of our budgeted growth. For this year, we’re looking for about 7 percent increase. We try to establish realistic goals, but ones that take some work,” Glennon says.

“We expect business in general will be a little depressed this year,” he adds, partly because the air-conditioning industry is in a slight slump. “We look to the new business entities to make up the difference.”

Redefining its market also made a big difference in the company’s profitability.

“When I started, we had a lot of volume and very little profit,” because the company was trying to compete in the new-construction market, Glennon says. “We had a lot of work that wasn’t profitable work. In general, new construction work is the lower end of the gross-profit stream,” he explains, and the industry has been suffering in new construction.

Although the economy has been growing and inflation has remained relatively low, there should have been some cost adjustment. “Even 3 to 4 percent compounded over 10 years you would think would lend itself to a large increase in the value of new construction a/c, but that hasn’t happened,” he says. “The price per ton for air-conditioning has been, in a lot of cases, static or gone down because it’s a very competitive side of the business.”

In that battlefield, he adds, competitors “are running around shooting everybody in the foot.”

Modern dropped out of that rat race and narrowed its market to existing and renovated homes and businesses. “We’ve focused our business on the service side so the volume has gone down, but the profit dollars have gone up to the point where, for the last nine years, we’ve been predictably comparable and have continued to grow.”

Of its business, about 35 percent is commercial, 65 percent residential, and about 60 percent of the residential business is to single-family homes, the other 40 percent is to multi-family or condominiums. In a typical day, the company handles an average of 30 to 35 service calls per day, including six or seven jobs replacing or installing an air-conditioning system, Glennon and Sammons say. In addition, “precision tune-up specialists” handle a number of calls for periodic maintenance.

Modern Service employs about 90 people full time, most of whom work in the field as service technicians. Like its services, many of the company’s employees are diversifying. The company offers cross training and continuing education opportunities to those who are interested so that, for example, an appliance technician might also qualify as an a/c technician — or as president.

Sammons, who has been with the company since 1979, spent about half those years as a field technician before he took advantage of further schooling and was promoted to president. The president of the Venice company also was promoted from within the company.

“We haven’t out-sourced very many people. We try wherever we can to promote from within,” Glennon says.

“I feel every successful business has to do three things: First, you have to meet the needs of the customer, because without the customer you don’t have a business. You have to meet the needs of the employees because without the employees you certainly can’t meet the needs of the customer. But thirdly you have to meet the needs of the ownership — the investors are the ones who put you in business,” he says.

Especially in a tight labor market, it’s important for a company that emphasizes customer service to retain its good employees. In addition to its education and advancement opportunities, Modern’s profit sharing and benefits packages help it keep reliable employees.

In return, the company expects a lot from its people.

A number of employees, including Sammons, sport large buttons emblazoned with the cryptic “IIMJ.”

“It Is My Job,” Sammons explains with a grin, and it’s more than simply a promotion, it keeps responsibility and accountability front and center. Employees are expected to take a personal interest in a customer’s needs and to do what he or she can to satisfy those needs. That might mean resolving a problem with an unhappy customer, handling an additional task while on site, or referring a question to the appropriate person — then following up to make sure the customer has been satisfied.

That’s where the company’s team concept comes in. All Modern employees except managers — from office workers to field techs — belong to one of three teams, Sammons explains, and each team has a leader, who is “more or less like a sales manager.” If a field technician reports that a customer wants new appliances or bathroom renovations, the team leader can collect all the information needed from the financing people, plumbing manager, and any other pertinent data.

“In a football game, every time someone passes or hands the ball from one person to another, there’s an opportunity to fumble,” Glennon says. “We don’t want to allow the ball to be fumbled too many times. We try to get our people to take ownership of the customer’s problem.”

If a technician is running late for an appointment, he is expected to notify dispatchers, who will then either report the delay to the customer or send another technician. (If he is more than two hours late, the customer is compensated for the time he spent waiting.)

“We try to be very organized in what we do,” Glennon says. “We have a centralized warehousing distribution center. We have a very sophisticated level of communication with the people in the field so that we get quick response. We’re very highly computerized; we have a custom-designed software package that’s fully integrated for general accounting, inventory, dispatching, customer history,” he says.

“The thrust is becoming more and more efficient. You can’t simply turn around and raise your prices to your customer, because others in the industry are not.”

In spite of a slowing economy, the company has plans to grow and diversify even more “possibly in a short period of time.” Glennon declines to offer particulars, but he says the company has purchased “300 feet of frontage on Metro Parkway for future growth.”

The steps Modern has taken in refocusing its market, diversifying, and increasing efficiency have kept it healthy in an industry where many have failed. But no matter what other steps are taken, the company’s health goes back to that “three-legged table of success,” Glennon says. “Our success rests on that table and if you take one leg away, success falls, so we have to take care of the customer, we have to take care of the employee, and we have to take care of the ownership.”

Jill Tyrer is a freelance writer and editor based in Cape Coral.