June 16, 2020
It’s simply not enough these days to offer a great service. You have to provide a world-class customer experience, and there’s no one better qualified to educate us on the matter than our guest, Lou Hobaica! President of Hobaica Services Inc, Lou explains how to use your brand and likability to create lifetime customers, why technical expertise is the least important component of your business, his version of RND, and how to “Hobaicanize” your team.
Lou is one of the most likable people you’ll ever meet, and that’s how they brand their company. They differentiate themselves by branding as the most likable people you’ll ever meet. He runs Hobaica out of Phoenix, AZ, along with his brothers, Paul and Mike. His father, Paul Hobaica, started the company back in 1952. It started out as Hobaica Refrigeration, but has grown quite a bit since. Hobaica may have expanded into many more services and territories, but they still maintain the same great reputation earned from years of incredible customer service.
Lou’s father Paul came to the United States at the age of 3 as an immigrant from Lebanon. Paul served in the Army as a radio operator on the front lines at the Battle of the Bulge. He wanted to use his G.I. Bill funds to become an electrician, but the program was full. Instead, he was convinced to join a then up-and-coming industry called refrigeration. In 1952, he started Hobaica in his garage, serving local dairies, farms, grocery stores, and bars. As Phoenix grew and temperatures rised, air conditioning became more and more necessary…and the rest is history!
Lou was handy from an early age, and started working for his dad at 13 years old as a helper for Hobaica technicians. He literally grew up in the business! After earning a business degree from ASU, Lou and his brother Paul bought the business in 1989. At that time, Hobaica had a total of 8 team members, and was around $100,000. His brother Mike joined shortly after, and they’ve grown the company together to over 40 employees and around 10-11 million dollars.
Since buying the business in 1989, Lou has been through many, many challenges. They’re never fun, but they’re always a great learning experience. You dig deep, learn how to do things better, more efficiently, how to trim things down, and make more money. You’re better from these situations, and COVID is no different. Hobaica is taking the practices that they’ve implemented during the pandemic and moving forward with them.
We asked Lou to rank five categories of business in terms of their importance to success, and his order might surprise you (hint: technical is last on his list!). Whether you’re a brand new business owner or a seasoned vet looking for guidance, this list will give you some insight into how Hobaica has stayed relevant throughout the decades.
Number one on the list is finance. So many companies run around and jump through hoops, but don’t really make money. Why is that? Lou points out how vital understanding the financial aspects of your business is to your success. After all, if you aren’t making money, it doesn’t really matter how great the rest of your business is. You need to be able to read and understand things like your balance sheet, direct and overhead costs, gross profit, and especially what your break-even point is.
By calculating your break-even point, you can manage and align your KPIs, budget, and forecast for the entire year. This allows you to manage your cash flow, and know exactly where you are for the month and for the entire year. Lou uses Service Titan to track his per-month revenue so he can have a precise snapshot of where he stands at any moment. This information also gives you the opportunity to structure your prices and service to be profitable in the first place!
Perhaps you’re already a financial wiz, but you’re not growing like you know you should. The next thing to focus on is your operations. Take a hard look at how you’re doing business, and figure out where you can tune your processes. If you aren’t sure what you should change, the best method according to Lou is by RND. No, not research and development—”rob and duplicate”! Lou says it a bit tongue-in-cheek, but it’s true. The best business owners are the ones that network and find others that are doing things well to learn from them. If a business out there is doing something better than you, figure out why that is, use that information to tailor your own processes, and improve your company.
Coming it at number three on Lou’s ranking is marketing. You have to define your brand. You need a story and you need to be memorable. Hobiaca’s brand is being likable. After all, people like to buy from people they like. Hobaica technicians are trained to be likeable, and provide a lasting impression on customers. It’s like a first date, and you have to make a great first impression on your customers. Branding is how you market yourself strategically, and developing an emotional bond with your customers is huge.
While sales is towards the bottom of the list, it certainly can’t be ignored. You need to know how to market your services and products, and it ties into your brand. Hobaica isn’t trying to be the cheapest option out there. They sell value, convenience, and quality.
At the bottom of the totem pole is the technical aspect of your business. A lot of technicians go off on their own because they are so good at the technical side of things without realizing it’s not as important as the business side. You can teach anybody the technical side of things; it’s much more difficult to teach the soft skills, the communication, and the marketing. You’ll always have the guy that can fix anything, but the technicians that customers love are your biggest revenue generators. The ones that can communicate, and create that customer experience are invaluable.
COVID forced what Lou has been preaching for years to the forefront of the trades. His commitment to a world-class experience for customers isn’t new for him, but now others are trying to catch up to Lou and figure out how to make things easy for customers in the midst of this current climate. Be likeable, be easy to do business with, and do what you say you’re going to do. Hobaica does the right thing even when no one is watching, and that truly sets them apart.