The sales commission game
Incentivizing performance is nothing new. It’s been around since the 1920’s with the adoption of mass production methods. What started in the automobile industry eventually spread to nearly every industry. The ability to produce goods cheaper and faster created a healthy supply of inventory that American businesses needed to move from their warehouses to your home. As a result, businesses began hiring salespeople to help move these goods. From this was eventually birthed what we know today as consumer culture.
Performance incentives have been researched by universities, studied by renowned psychologists, refined by consultants, tested by businesses, and proven by consumers.
Incentive program design is now big business and it exists in some form in nearly every business in existence today. Performance incentives are implemented in a myriad of ways. From simple tip based compensation, performance bonuses and profit sharing, to awarded time off and promotions up the corporate ladder. Nearly every business out there has incentivized their employees in some form or another.
I don’t disagree with any of this. I personally believe that the opportunity to make more money or increase freedom can be a great motivator for employees to perform and help a company meet the values it adheres to.
Naturally, this is where we must insert the exception clause…
EXCEPT, the problem with commissions when it comes to the HVAC industry is every commission based compensation plan inevitably emphasizes profit and nothing more. This means the customer is no longer valued as a fellow human. All ethical practices and simple regard for the well being of people are tossed out the window. Instead, customers are viewed purely as a path towards a bigger bonus check. Separating them from their money becomes the only goal of commission based technicians.
However, this wasn’t always the case. The construction and manufacturing trades have gone through a major metamorphosis in the last 25 years. Professions that were once abundantly supported by highly skilled craftsmen are now dominated by clock punching technicians with little concern for or knowledge of their craft. Combine this with the moral decay of society and now what was once a trustworthy tradition of skill, is now just a street hustle.
And unfortunately, this hustle is only intensified when company leadership is solely focused on profit. When a lack of general integrity and technical competence is combined with the goal of profit at all costs, deception and fraud are naturally going to be conceived. As a result, an environment has been created where van fleets filled with less than honest techs now traverse the city being paid to scare customers into making impulse decisions based on misdiagnoses and false claims.
More often than not, techs unfortunately win this game of deception simply because the game is nearly rigged in their favor.
Service techs know that you are uncomfortably hot inside your home when your AC is not working. As such, they can pretty much convince you to buy anything, even if it isn’t necessarily true, simply because you are desperate.
Furthermore, they know that even when they can’t properly diagnose the issue with your system, you don’t understand the issue either. This leads them to confidently and confusingly claim that multiple parts are in need of replacement even when this is not necessarily true. All because they know you will never know the difference. It’s pure evil and manipulative if you ask me.
Sadly, they even do this when they know exactly what has failed and needs to be replaced. Rather than just replacing the one simple part, they again hide behind their overly complicated explanations with the hope that you are desperate enough to give them the green light to perform additional and unnecessary work.
Even better for the techs is when they play the game right and win the holy grail. This is when they are able to skyrocket the repair costs high enough that they can then convince you to replace the whole system. After all, this is what the company trained the tech to do. The goal is always to sell you the most profitable thing for the company, and that is a new system. So, this is what they push for.
Either way, the technician wins with a bigger commission check and you lose purely out of desperation and a lack of understanding or experience. It’s not your fault. The whole point in hiring an AC contractor is because you don’t know how AC systems work, nor should you need to know.
They are supposed to be the “honest” ones with all their “NATE Certified” techs. They claim to be the “experts” and “professionals”, so why wouldn’t you trust them to be able to repair your unit and believe them when they say it is better to just replace it. Tragically, the majority of the claims these companies make are not in line with reality. And the bigger a company is, the bigger the gap between their marketing claims and their real world abilities and practices.
It’s just the way business works. The bigger the business, the greater the demand for cash flow to keep the doors open. This means lots of people and lots of expenses. What better way to keep cash coming in than to sell more of the products that produce the highest number of dollars.
The best way to ensure that every sales call…ahem…I mean service call is maximizing profit potential, is to incentivize the people in direct contact with the customers through the use of sales commissions. Commissioned techs now become the sales people that drive the needed cash flow for the company simply because the techs are now dependent on sales commissions to earn their living. It’s a practical arrangement, but only on paper.
I have nothing against commissions when the program is designed correctly so that customers win. Incentives can be a very powerful tool, but in the HVAC industry, commissioned techs have no place. Inevitably, sales commissions drive behaviors that coerce customers and deprive them of what they truly need in a contractor, absolute integrity.
This is why we do not pay sales commissions to our techs and why we forfeit growth and profit to make sure that we only hire people that share and practice our values. This is very difficult to find, but we will not make compromises, so instead we make personal sacrifices. We never want our customers to ever have to second guess our authenticity and concern for them. Doing what is right no matter the cost is always our first priority.
Now to be fair, not every technician out there is working a street hustle and neither is every company. They aren’t all dishonest and incompetent. However, like a plague, much of the industry has quickly been engulfed with these deceptive practices. This has led most people to now question the authenticity of most contractors’ claims. This negative reputation of the HVAC industry is most likely why you are even here reading this. I can assure you, you are not alone.