Editor's note: In your daily quest to save money, improve service, and hold on to valued customers, you should leave no stone unturned. HVAC contractor David Allen — owner/president of Allen's Air Conditioning, Inc., Tuscumbia, AL — wanted to find the source of repeated callbacks. His search lead him to a $2 part.
He chose ContractingBusiness.com as the forum to tell his story. Thank you, David. – TM
I recommend to any contractors looking for ways to trim costs, that they investigate the quality of the capacitors they’re using.
Like so many other small business owners, when the economy went sour last year, I began searching for ways to make sure my business stayed afloat and profitable. We knew we could count on steady business from our service agreements, but tough times required that we really examine the way we do business. Our goal was to find opportunities for improvement in inventory control, identify operational issues or capitalize on our efficiencies. Imagine our surprise when we discovered that the most unsuspected part of all – the capacitor – was costing us hundreds of dollars in call-backs and jeopardizing our customer relationships.
Callbacks Show a Pattern
In the summer of 2009, we decided to see what we could learn from the callback records we keep in our service department. Fortunately for us, we were just putting the finishing touches on new stocking, ordering and tracking procedures using data software that allows us to track our parts purchases made with purchase orders. When we looked at the callbacks from April through June of that year, it was apparent right away that we were ordering a lot of capacitors, and that the service tickets associated with them were “no charge” tickets. I did a little digging and discovered that capacitors cost us less than what we were paying for them a few years ago, so that raised a red flag. Our study confirmed that the capacitors were the cause of 16 callbacks over a three-month period.
It was apparent right away that we were ordering
a lot of capacitors, and that the service tickets
associated with them were “no charge” tickets.
Capacitor Quality Check
Since this problem was so obvious, we began paying close attention to anything to do with capacitors. I wanted to know why we were replacing so many of them, so I requested information from various suppliers and manufacturers. I wanted to know if there was such a thing as a good, better or best capacitor. I had taken several training courses taught by master trainer Christopher Mohalley, so I sought out his opinion, and he connected me with AJ Colone, a capacitors product manager at Genteq, who provided me with great information about capacitor quality. I learned that the quality of the materials in the capacitor affects its tolerance. Low quality materials are usually cheaper because the supplier cuts corners and eliminates processes that make the material higher quality. Using cheaper materials will lower the cost of the capacitor, but will also sacrifice its quality, performance and lifespan.
Getting What They Paid For
Less expensive capacitors, I found out, are cheaper because they’re cheaply made. The revelations didn’t stop there. In fact, now that our interest in capacitors was heightened, we started learning more about them, almost by accident. As we installed new units and brought home the old ones to dispose of, we began to take note of the capacitors that the OEMS had installed, just to see what was out there. We noticed that if the original capacitor was in the unit, it was almost without exception the high-end capacitor. Additionally, we noticed that the higher end units we installed that use the high-end brand hardly ever had a failed capacitor. The lower-priced units that use the cheaper capacitors caused many call-backs within the warranty period. We were amazed at the difference.
Snowballing Issues
It didn’t take long to figure out that failed capacitors – a part that costs less than two dollars – were costing us hundreds of dollars per year in call- backs. As if the financial loss itself wasn't enough, we also found:
- Damaged relationships from upset customers who don’t understand how “new” parts can fail so quickly.
- Wear and tear on the on-call technicians, who often have to deal with after-hour service calls and frustrated customers.
- Lost potential during normal working hours when technicians are spending time on callbacks, which generate no revenue, versus performing demand service for pay.
- Poor-performing capacitors that can damage other HVAC system components.
Even though suppliers will warranty the faulty part if it fails within the first year, the cost of the part is the smallest portion of the real cost of performing a service call. I learned long ago not to shop on price alone, so we made the decision to switch to Genteq capacitors on all our repairs. In fact, we’re going so far as replacing some of the low-cost brand capacitors we know we installed that are still under warranty when we’re on a maintenance visit. It’s worth the peace of mind to know we won’t be called back anytime soon because of a faulty capacitor.
David Allen is owner/president of Allen's Air Conditioning, Inc., Tuscumbia, AL