Pay Attention to the Replacement Cycle
Fifteen years ago, in 2005 a record number of air conditioners and heat pumps were shipped. Last year, we had a late start to the summer so approximately half a million systems were deferred into this year. Without COVID and the economic shutdowns, industry installations would have been up dramatically. Even with them, we are still poised to beat 2019.
The June statistics from AHRI showed year-over-year growth. Anecdotal reports from contractors suggest July and August will also be strong months. While the industry is running slightly behind 2019 on a year-to-date basis through June, it should catch up. If this year beats 2019 by a lot, we are likely to still see a significant number of replacements deferred to 2021. More likely, 2020 will be up by single digits over 2019. That said, it is still early to forecast 2021.
Growth From Existing Products, Services, and MarketsThe market may bring growth in 2021 purely from the deferred replacements from this year. If you maintain
Grow by getting smarter about your marketing and advertising. For many contractors, getting smarter starts with doing something outside of the manufacturer programs. Participate in them if you want, but do not rely on them. Do your own digital marketing. Do your own targeted cable TV advertising. Do your own radio spots. Wrap your trucks if you have not already done so.
You should not accept inertia. You can grow more than that by selling your existing products and services to the same market.
If you are already marketing, think creatively about how you can do more. Run an oldest furnace contest. Practice affinity marketing around local schools, churches, and other charities. Formalize and increase your networking.
Growth From New Products and Services
Another way to grow is by expanding your offering. Ron Smith advises contractors to add to their portfolio of products every year. Look for something else you can sell. If you are not all-in on IAQ products, that would be a natural, given everyone’s concerns about the spread of viruses. Another option is to look into connected home products. If you live in one of the states like California that experiences periodic blackouts, consider offering standby generators. There is no-doubt you can find more to offer.
If you are not all-in on IAQ products, that would be a natural, given everyone’s concerns about the spread of viruses. Another option is to look into connected home products
You could also consider counter-seasonal products. When I worked for a manufacturer, we helped a pool and spa company set up a heating and air conditioning division. Since most pool work occurred in the spring and most spa installations occurred in the fall, this company felt that HVAC would help even out their labor demands and revenue. It should work the other way as well.
With the addition of products, consider adding services. Look into duct cleaning and duct sanitizing as an add-on service. Think about adding blown-in insulation. A natural for many HVAC companies is to add plumbing.
Growth From New Markets
Another way to grow is to expand vertically or geographically. Geographic expansion is obvious. You increase your service territory. A number of contractors have begun opening satellite operations in nearby towns. This is particularly attractive to contractors in rural markets where the opportunity to gain additional market share is a challenge.
Vertical expansion is staying with HVAC, but adding light commercial, heavy commercial, industrial, computer room, clean room, refrigeration, or biotech/pharma.
Vertical expansion is staying with HVAC, but adding light commercial, heavy commercial, industrial, computer room, clean room, refrigeration, or biotech/pharma. All of these should be pursued with caution because the jobs are bigger, the payments are slower, the technical requirements are greater, and mistakes are far more expensive.
The best place to learn about new products and services is the Service World Expo. Register now for the Service World Expo September 22-24! It has gone virtual, features 44 different presentations, and a trade show with a virtual reality, augmented reality, and 3D experience that makes it more like a trade show in a video game. Best of all, it is FREE to attend. Register now at www.ServiceWorldExpo.com.