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Mike: Today on the Dominate Ductless podcast, today I’ll be talking with Jeff Blomstrom from Mitsubishi Electric Trane US, who will give you a little background on himself and what he does.
My name is Mike Cappuccio and I’m the owner of Dominate Ductless.
I do ductless training around the United States to try to take heat pump contractors to the next level through very experienced training and business operations that we will go through in a 2-day training. I’ll let Jeff give you a little background on himself and then we’ll go into some of the, you know, the Q&A of what we’re trying to get accomplished.
Jeff: Yeah, thank you, Mike, and thanks for having me.
My background is I was brought up in the plumbing and heating business by my father, grandfather, and uncles. We’re all in the business. So out of college, I got a job with a distributor and shortly after that became a territory manager. And then about 13 years of doing that, of which the 11 I sold Mitsubishi products. I came to work for Mitsubishi and have been with Mitsubishi for 11 years.
The thing I always like to share is that with my contractors through the years back when I was a territory manager, I would always lead with Mitsubishi and I would tell them that ductless is the future. Now 2024, I can confidently say that the future has arrived. Ductless has arrived. So that’s a little bit of background and where I’m at.
Mike: Well, that’s great. So what is your current role now, Jeff? What are you doing now with Mitsubishi Trane? What is your role now?
Jeff: Through the years I started as an area manager, so I was in front of contractors, very similar to my territory manager role in distribution moved up to a regional manager role. So I’m working with distributors more so, and then currently in a senior sales manager role, dedicated and working with the Trane DSO sales channel.
Mike: And I’ve been involved with that a little bit with you now and I’m starting to see that the Trane side of the business is starting to come around a little bit because I can remember back a few years ago when we started doing training for Mitsubishi Electric, I’m going to say probably 15 years ago now was a lot of carrier dealers were actually doing Mitsubishi Electric. And now we have this whole group of Trane dealers that we’re trying to get involved with Mitsubishi products too. And we’ve done some of these trainings across the country. We’re starting to see some good results for them.
So I guess my question to you would be why would we recommend a Trane dealer add ductless heat pumps or heat pump business to their offerings now?
Jeff: Yeah. So Trane being a unitary manufacturer, historically just having the unitary offering, the addition to the ductless product and them being able to offer the ductless product and their account manager’s territory become more knowledgeable with the product. The opportunity for their contractors is, you know, they can still sell that Trane unitary product in every home. But now the more knowledgeable they become of the ductless product and understanding the issues that homeowners have in identifying those, they can start offering ductless.
In addition to, you know, they’re going to have that the workforce out there, the labor is basically built into the job. They’re spending a day or day and a half out there already and so they’re able to, you know, add on that, that extra sale, extra installation which isn’t going to take up much more of their time and their, you know, they’re there already. So that is the kind of the exciting thing, the opportunity with the trained contractors at this point.
Mike: Okay, so let me ask you this. How would you frame the revenue and the compensation opportunity for some of these area managers now with train? I mean, are we starting to, you know, how do you see that revenue and compensation opportunity for those managers?
Jeff: Yes, it’s, you know, we’re in sales, right?
Mike: Yeah.
Jeff: At the end of the day we just want to sell more. If it’s more, if you’re selling more supplies, if you’re selling more unitary boxes, it really just gives them an additional offering. Right? It gives them more opportunity and you know, they can also increase a contractor’s overall share a wallet. Like if they’re getting X amount in their unitary business and just are not able to grow, that this is a new avenue of revenue for them?
Mike: Do you think that any of these managers, these territory managers that go out for train and think that they can identify good candidates for growth with heat pump products and the ductless products that Metis has to offer. You know, how do they, how do they find these, these contractors and what do they see in them?
Jeff: Yeah. So for the trained sales team, they have a great network of contractors and dealers.
Mike: Yeah.
Jeff: And so they’re, they’re kind of in front of them already.
Mike: Correct.
Jeff: It’s just, you know, bringing that knowledge, opening their mind to, hey, there’s another avenue. Again, I just talked about creating more revenue. There’s another avenue here with this product. And so a lot of the education is just training the contractor on seeing that opportunity. Every house has a hot or cold spot and a lot of times it just comes down to having your pricing, having an install crew that knows what they’re doing and offering it at the kitchen table.
Mike: Yeah, I see a lot of the contractors when we do the training, some of them can’t actually price it at the kitchen table. They don’t have the tools available to them to do that. So I mean, you know, we can offer them through training. What are we seeing, I guess what are we seeing with the training when we do training? What is that, how do you feel that helps the contractor?
Jeff: Yeah. So the additional training that’s really needed at Metis, we do a good job working with distributors and contractors on training them on the product, training them on the opportunity where like the dominate ductless program comes into play and where it really helps is kind of reiterating those things that we already do well, that medicine distributors do well.
But then kind of filling in that gap of how do you, you know, how do you market the product, how do you generate leads? How do you follow up with leads? And helping them build the, you know, a price book with ductless in it, the more importantly, help them understand how to price the product and how to offer it. And that’s where the Dominique Ductless seminars have just pulled that all together and then have provided that additional information that, you know, that they need to, to really pull this all together and have a ductless division where they’re going out and selling and offering ductless every day.
Mike: Do you know any dealers who have embraced the opportunity that ductless really provides after we’ve done training with them, with medicine, myself and my programs?
Jeff: Yeah, the seminars, it’s like any other seminar you go to. Chances are you paid for it. Chances are it’s very good information and content.
Mike: Yeah.
Jeff: It’s all about implementation. So the ones that do implement it, you know, we track them through the years and hands down their sales increase. Obviously their ductless sales increase, but their bottom line revenue increases. And that’s what we want to show them is that, hey, you don’t have to do much to change your business.
Mike: Oh, you really don’t.
Jeff: You just keep doing what you’re doing. But just add this in, add this in. It’s minor tweak. Minor tweaks to their business. In addition to making sure they understand how financing works, making sure they’re offering financing, that’s the other big piece.
Mike: In your experience like what does a successful ductless dealer look like? What do you see them doing? What is it that you see when you see a successful ductless dealer? You’ve done this for a long time now and you have your success stories, people. What do those dealers look like in your mind, in your area?
Jeff: Yeah. So again, between Metis and our distributors, we do a good job to a certain point. The ones that take it to that next level are the ones that take the time and train up their wholesales team and get that pricing in the retail price book. They train up all of their installers and technical support advisors. So there’s not just one person there that knows ductless, it’s everybody. Everybody knows it.
Mike: Yeah.
Jeff: The person answering the phone understands what the consumer is asking and where the consumer is at. And you know, we can generate all the leads we want, but if we’re not able to accept those leads and then nurture those leads and really train up a consumer on why it is they’re calling about ductless. What it is about ductless that maybe they don’t know and just help that consumer get to that point where they understand it and want it. So that’s really a differentiator from the contractors that come to the trainings. They hear it all, but they don’t go back and do anything about it.
Mike: Yeah, I always talk in training is spinning the marketing gear first and implementing a good marketing plan to generate leads because it all starts with leads. And then from there it’s okay, we’ve generated these leads. But if the person who answers the phone doesn’t know what type of marketing you’re doing or what you’re doing and what offerings you have and can’t answer the basic questions of a ductless product, then it can really go bad. It can be a 50% book rate. And we try to show in the trainings when you can go from a 50% book rate to a 75% book rate, how much one net profit you can actually make from that.
And you know, I mean, let’s talk a little bit about the training side of it. And you know, the people that come to training, like how important is training in putting the proper people into the training seats? Because sometimes we see, when we do a lot of training, it’s, you know, we don’t really see the right people sometimes come to a training. It’s more of sometimes that we see, we try to fill seats and we really don’t put the proper people in and the importance of really putting the right people in.
Jeff: Yeah, that’s a good point. First and foremost, you have to understand what is the training, what information is being provided. Some trainings are for the owners only, some trainings are for the sales team, some training is for the installers. And then some trainings for the technical advisors. So really to understand what training is. And it sounds pretty basic, but there’s been a lot of technical trainings where they send a salesperson or a sales training where they send the technical advisor.
Mike: Yeah.
Jeff: And so to really make it clear and don’t send somebody, just to send somebody really have a purpose behind it. And you can’t just do training once a year either. It’s gotta be something that you have mapped out. You have a training roadmap. And if we’re talking specifically about ductless, it’s. There is a clear roadmap, there is a method or a process to, hey, this is the training I should start with. You know, the owner’s on board, the salespeople are on board. Here’s a training on pricing. Here’s a training on, you know, basic install. And so there is a progression that we’ve seen successful.
Mike: Yeah, I’ve seen the biggest lack is probably not marketing the product, the deal, and not marketing the product at all, if any, and then not being able to actually provide a price in the home. I mean, there’s two big sections of it that are missing there that could definitely make a Metis dealer much more profitable. Much more profitable. Half the time it’s just offering it, marketing it and offering it. But that’s what I’ve seen.
But what’s Treyn’s outlook for the ductless market over the next five years? What are their goals? What are they trying to accomplish? This has been a joint venture for the past. I think it’s a ten year deal. We’re probably into year five now, I think maybe a little more, I guess. Where do you want this to be in five years? What do you see it looking like in five years? Because you’ve been put in this?
Jeff: Yeah. Well, it’s really to follow and to exceed the industry trends. I think it was 2022 heat pumps surpassed furnace sales for the first time. 2023 heat pumps were 21%. More heat pumps were sold in gas furnaces. And so just continue to follow that trend. Another statistic I read recently was just overall, the average ductless purchases had increased 6% for contractors, just overall on average. And so just to keep up, keep up with that growth, the growth opportunity. And, and I always believe if you identify the right objectives, goals, then you put those actions in place that you’re going to reach the results you want.
And so, yeah, it’s a lot simpler than what a lot of people make it. I mean, with ductless, you walk into a home, you have a hot or cold spot, you identify that, you come up with a solution, you provide a price, you provide financing, and there’s probably a pretty good percent, pretty good odds that you’re gonna, you’re gonna…..
Mike: I mean, we were trying to show a trick when we’ve done some trainings and I mean, selling one system a week, just one single zone system a week, can bring a contractor at $250,000 in sales immediately. I mean, two will give you half a million, three will give you three quarters of a million. And I mean, some of these bigger contractors doing four a week, I mean, it’s an easy million dollars to your, to your revenue stream at 30% to 35% profit. So, I mean, I just, I really think that it can be done with a lot of these train dealers. I think that there’s a lot of potential for them to grow with this product. So, I mean….
Jeff: Yeah, and what you just shared there with, you know, adding one system to the, their bottom line revenue at the end of the year, to me, that’s, that’s what they need to hear. That’s what they need to understand. We’re all, we’re all in, you know, business. Whether we own our own business or work for a company, we’re all, we’re all in it to make more money. And to me, there’s no other catch or a hook, if you will, that sounds better than me. Just add one more system a week, you generate hundred dollars more. I mean, yeah. Who wouldn’t, right?
Mike: Exactly. If you had one last thing to say to the, to the train contractors, what, what would you tell them? What would, what would you say to him?
Jeff: Yeah, I’d say it’s, it’s very exciting. There’s a lot of opportunity. There’s a lot of opportunity. And once you kind of slow down and take the time to understand what that is and all the resources behind you and all the support that, you know, there’s only so many hours in the day and with a contractor, there’s only so much one contractor can, can do. But the more mind share you get with them and the more share wallet you get with its Douglas product, you’re going to help them continue to do well and grow and keep up with the industry and you know where the industry is going.
Mike: Right. Well, hey, Jeff, thank you for all the good insight today. And I look forward to seeing you throughout the year as we get together and we conduct these trainings with some of these trained contractors. And I’m going to tell you. What we’ve seen with them is I’ve seen some have been really good and some guys have really taken off and really grown that have embraced what we’ve been talking about. So again, I just want to thank you for coming on today, and have a great day.
Jeff: You too, Mike. Thanks. And thanks for all you do. Appreciate it!
Mike: Thank you!
