Air.Water.Energy — go big or go home

A couple years ago, when CONTRACTOR named John Smith our Contractor of the Year for remaking himself as the Arizona Green Plumber, we did it because he made a bold change for the good of the business in the face of a deep recession. Ray Grimm, the president of Air.Water.Energy here did the same thing for his HVAC, plumbing and electrical contracting firm.

Grimm’s company indirectly traces its roots back to 1911 when Keppner Heating was founded. Grimm started The Air Conditioning & Heating Co. in 1987 and bought Keppner in 1989 to acquire its hydronics expertise. The company was humming along, with Keppner’s list of hydronic customers, including steam work in Oak Park, Ill., hometown to luminaries such as Ernest Hemingway and radiant heating pioneer Frank Lloyd Wright. They also performed hydronic work in Elmhurst, Villa Park, Berwyn and Cicero. Grimm is a believer in Weil McLain equipment and they install Unico on the air conditioning side in hydronically heated homes.

The Air Conditioning & Heating Co. is a Lennox dealer and has gotten a good supply of work funneled through Costco.

But then the Great Recession hit and Grimm knew it was time to change.

“I knew in 2008 that the world had changed,” Grimm said. “We needed to become a complete solutions provider.”

Thus, Air.Water.Energy. was born, providing plumbing and electrical service along with HVAC and hydronics. The firm has started dabbling in solar and geothermal.

Grimm decided to go all-in, way beyond just sending out a direct mail piece that said, “Hey, we’re offering plumbing and electrical service now too.” He decided to rebrand the company.

It wasn’t easy and it wasn’t cheap. Grimm has a background in retail furniture so he’s a businessman and he knows his numbers. Nevertheless, he planned on spending $1 million and it ended up costing him $1.3 million. In order to do it right, the internal systems and procedures had to be solid enough that the concept is franchiseable. It required a culture change, an influx of new talent, proprietary computer hardware and software, new or refurbished vehicles, reprinting of everything on paper, and new public relations.

He knew he had to find better ways to reach customers, especially women. He went through several web design companies before settling on 405 Media Group out of Minneapolis. He bought Hansen Mechanical Inc., in Villa Park, Ill., because he wanted Joe Hansen’s plumbing expertise and his list. He now has two plumbers on staff full time. The company carries Bradford White and Gerber products. The electrical side is still being subcontracted out because he discovered that only seven out of 100 HVAC customers will need electrical work.

“We knew that we had to be different, we had to provide better service at a fair price and we had to be able to do more things,” he said. “We wanted to do more than you could fit on a business card.”

The transition took a year of training and culture change. It’s been rocky at times. He had to fire his general manager and service manager in 2012. It all worked out for the best since he hired two managers to replace them who came to him from Service Experts, who are better, including General Manager Mitch Zych, who’s a key player in the company, along with Dave Vick, the new sales and installation operations manager.

He’s keeping it all in the family. His ex-wife runs the HR department, which often causes an, “Are you nuts?” reaction. The woman is rock solid dependable. Grimm’s daughter runs the CSRs and has created the LAST system for handling complaints — Listen, Apologize, Solve, Thank. A.W.E. offers a 100% money back satisfaction guarantee, which Grimm pointed out tells the employees that the company is proud of its work.

Reaching customers to remind them that they are Air.Water.Energy. is an ongoing process of both direct mail and email. The company sees about 34,000 customers every three years. He has 32,000 names on his list and the company services about 12,000 to 15,000 a year. He plans to reach out to them at least twice a year and his goal is four times a year.

“The economy has not helped us,” he noted. “A lot of people don’t have the money.”

His average ticket is $6,000-$7,000 on the HVAC side with a lot of the equipment sales high-efficiency. Service is flat rate with an $89 diagnostic charge. Grimm bought his building in 1989 and it’s bursting at the seams, but he figures he can do $10 million to $12 million as he’s presently configured.

Would he do it again? Yes, he said, but he’d do it smarter. It requires a lot more customer outreach, better web work, better SEO optimization, and better client retention, he said.