Greg McAfee, President of McAfee Heating & Air, author, and host of The Greg McAfee Show has made a career out of finding effective growth strategies and applying them for success. Hailing out of Ohio, Greg built a business out of his home in the early 90’s and has since seen steady, impressive growth year after year and a status as the most recognizable name in heating and air conditioning in his service area.
As a young man, Greg followed in his grandfather and father’s footsteps and took a position at Firestone. He wasn’t much for school, so at the age of 19 Greg packed up his things and took his pickup out to Dayton. He was driving a forklift, loading and unloading tires and before long started setting records in the warehouse. Greg was getting paid pretty well, and kept breaking records. Still, seeing some of the older guys working in the warehouse made Greg weary of being there for many years and so he joined the Marine Corps at 22. In the Marines, Greg took a course on refrigeration and really enjoyed it. Firestone held his position for him, so after his service Greg came back to his job but was taking heating and air classes at nights with his eyes on the future.
After graduating, he left Firestone for a heating and air position, taking a 50% pay cut. Whenever Greg speaks at trades schools or gives advice, he’s fast to point out that sometimes, you have to start at the bottom. After 9 short months, the owner called Greg into his office and told him “you’ll never make it as a mechanic”, firing him. Two days later, Greg found another HVAC position making higher pay and quickly learned he had a knack for sales. He was being trained as a tech, but while he was in his customers’ homes he was using his skills, quickly outselling the company’s salesperson! It wouldn’t be long before that company went out of business, however, opening the door for Greg to finally take a stab at running his own business.
Greg got married, bought a home, and started McAfee out of his home all in the same year. He was working off of his kitchen table, with $274 to his name and a used truck. He wore out many pairs of shoes as he knocked on doors and made plenty of phone calls to get his business off the ground. Through sheer hard work and determination, business slowly started to take off.
After a few years, Greg had a few employees working for him and things were going steady. In 1993, he started offering air duct cleaning, which really helped the business. In 1996, Greg took a few presidential courses at an entrepreneurial center. He was learning more and more about running a professional business, and started implementing his learnings into the company.
Greg was doing a million in sales out of a garage he had built behind his home. In fact, the biggest sales opportunity to date for McAfee was out of that garage! It was a million dollar contract with an apartment complex to replace 1947 Lennox furnaces and add AC units. He still challenges his sales team today to beat that.
While growth wasn’t rapid, Greg was always learning and continued to see progress year after year. Greg was always reading books, always learning, and always looking for ways to improve the business. By 2003, McAfee Heating & Air had started winning all kinds of awards including BBB recognition, local “best places to work” awards, and was starting to really cement its place as an established business in the area. Greg started really focusing on advertising, and since 2006 McAfee has been the top heating and air company in Dayton. Greg has high goals for his business, always trying to raise the bar in the industry and to continue to be top of mind for residential heating and air in his territory.
Understanding McAfee’s path to growth is about the ways Greg used disruption, discipline, and solid marketing strategies to set his company apart from the competition. He was always keeping an eye on what other companies were doing, and every ad he saw in the phonebook looked the exact same. Everyone had the same strategy, and Greg saw an opportunity. One of the most popular campaigns was their “8-8, Same Great Rate”. While other companies would have their phones turned off at 5:01pm, McAfee was staying open, and they took a huge amount of market share. In 2008 during the recession, they jumped up 46% and skipped a million in sales! Greg was doing the opposite of everyone else, doubling down on marketing and soared.
In Greg’s book, he writes a lot about being disruptive. Disruptive companies are ones that think outside the box, and are willing to try new things that others simply aren’t willing to take a chance on. The 8-8 business hours is a great example of Greg’s willingness to try something new, and it worked wonders. In fact, 5pm-8pm quickly became McAfee’s primetime business hours. They had to hire more people just to keep up!
Greg even started advertising one-day installations or his customers would get a thousand dollars back. Other companies in the area were struggling to meet a 2-3 install turnaround, so this was just another way to grab a hold of more market share. Before long, McAfee was saying “or it’s free” for their one-day installations.
What is important to takeaway from this is that when you, as a company, are disruptive, other people have to figure out how to keep up. If McAfee can do a system installation in a single day, the other contractors are going to either have to match that or figure out how to get potential customers to choose a longer turnaround time. A lot of times, simply doing something that others aren’t willing to do can be the key to success.
Greg’s service in the Marine Corp gave him the discipline that he continues to apply to his business. It’s about never quitting, and plowing through even when things are tough. It also gave him confidence, a key for any business owner. When something goes wrong, you can’t just give up. There are going to be days when technicians quit unexpectedly, months where the calls might not come in as expected, and years when growth just isn’t what you forecasted. If you don’t have the discipline to forge ahead and the confidence that you can be successful, this is the wrong industry for you.
A mindset that Greg and many other successful To The Point guests have in common is that marketing is an investment, not an expense. McAfee’s budget for marketing is usually about 8% of gross revenue, but that can go higher or lower depending on the year. Greg once asked To The Point hall-of-famer Ken Goodrich how much he was spending on advertising, and Ken simply said “If you want to grow more, spend more. If you don’t, spend less”.
In 2008 during the recession, McAfee spent 11% on marketing. That should tell you everything you need to know! Greg invests in marketing not only as a means of leads and promotion, but to continue to be at the forefront of his potential customers’ minds. From a truck or treat event every year with McAfee trucks to radio station guest spots and more, Greg believes that anything he can do to get out in front of the public will pay back tenfold. It’s an investment in time and money, but if you’re only marketing when things are busy, you’re going about it all wrong.
Marketing doesn’t just have to be GMB posts or Facebook ads, either. McAfee has always been community-oriented, and that involvement is another great way to improve visibility. That’s not why Greg does it of course, but when you’re active in the areas you serve, people will notice. In McAfee’s first year of business, for example, they sponsored Little League teams. This is a few hundred bucks—a relatively small investment—and not only do the kids get jerseys and equipment, the company name is displayed on the mats, jerseys, and at the games. McAfee also partners with children’s hospitals and other nonprofit organizations, and Greg frequently speaks at trade schools and wherever else he is invited. Greg encourages business owners to get out from behind your desk and screens and make stuff happen.
Greg is always thinking about the future of the home services industry. If you can’t keep up with today, it’s going to be scary, but if you’re keeping up there is plenty to get excited about. Greg points out that tomorrow is simply going to be doing things differently than we’re doing today. Technology will continue to evolve, and we’re already in an age where your smartphone can change the thermostat, turn on your oven and kitchen lights, and open the garage door all while you’re coming down the street after a day at work. It’s only going to get better, too.
How we do business is going to change, too. Many contractors are stuck in the past, and failing to adapt their business to the needs of more than just their aging customers. There are multiple generations at play in today’s market, and you need to be aware and able to adapt to all of their unique needs and desires. Not everyone wants to call your shop for service, and not everyone wants a paper receipt for service.
The Y generation is going to be the biggest generation with the most spending power over the next ten years. Are you prepared to serve this market? Whereas the X generation was about quality, the Y generation also demands a level of convenience. Some of your younger customers today grew up with cell phones and computers, and if you’re not matching your business to what your customers want in terms of convenience and experience, you’re going to fall behind.
Greg challenges you to think differently, and have the discipline and confidence to be a disruptor. Sometimes, simply being proactive and willing to do what others aren’t is enough to get your business to the next level.
If you’d like even more wisdom from Greg, we encourage you to check out The Greg McAfee Show, a great podcast you can find anywhere podcasts are available as well as his book, Build And Grow Your HVAC Business. Or, join the Iron Shapens Iron Business Roundtable to meet like-minded people!