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How To Stay Profitable This Summer

June 6, 2013
In the summer, the tendency for HVAC contractors is to run their techs as long and hard as possible, and squeeze in as many calls per day as they can. In reality, it's better and more profitable to take your time and perform a complete inspection on every call, every day of the year, reagrdless of the call load or outside temperature.

Once it starts getting hot outside, many of us forget we’re running a sales organization and are in business to make money, and start acting as if we’re running an emergency first-aid station in the middle of a war zone: we start just putting band-aids on systems so we can get to the next bleeding patient.

As we get into the “busy season,” let’s remember that it costs at least $200 or more to generate a service call. When techs just change a contactor or capacitor to get an air conditioner running, you lose money on that call.

If they go ahead and sign a customer up for a service agreement and your techs run those tune-ups without selling anything else, you’ve lost even more money.

You must sell more on each call than it costs you to run the call!

Some techs never seem to be able to find any of the systems they service in need of anything except the bare minimum. I kept records during the time I ran service, and about two out of every three of the customers I’ve seen have:

  • Dirty ductwork
  • A dirty indoor blower
  • A dirty indoor coil
  • A compressor that is drawing high amps on start-up and requires a start assist
  • Leaky ductwork
  • A shortage of return air.

Almost everyone has volatile organic compounds in their home, so they need a photo catalytic oxidation ultaviolet (UV) light. Unless they already have an upgraded filtration system, they could use one of those, too. In at least half the country a humidifier is required, so if they don’t have one, recommend it.

The extra money in this business does not come from contactors, capacitors, motors, or even replacement equipment. Those products are all a “given.” The extra money in this business comes from selling the products and services listed in the bullets points above, system enhancements, and indoor air quality (IAQ) products.

There Isn’t Enough Time!

The way to get the sales of system enhancements and IAQ products is to perform a complete inspection on every call, every day of the year, regardless of your call load or the outside temperature.

Your customers are not interested in getting a rush job today because you’re busy. When you read online reviews of contractors, you’ll find that customers were typically impressed when, despite the heat or cold, the technician took his time and went over everything with them in an unhurried manner.

Sometimes techs will tell me that their plan is to just do the simple repair today to get it up and running, then come back when things are slower to do the complete inspection and take care of their customers’ numerous other problems. That doesn’t work. Once the temps cool down, you lose a lot of the sense of urgency that’s present when it’s hot outside.

My advice:

1. Don’t overwork your techs. You can only do so much in a day, then you’re worthless.

Doing the job right requires a complete inspection on every call. When techs perform a blower pull-and-clean on at least two out of every three calls, they can only run about two or three calls over an eight-hour period. You can’t double the amount of your average service invoice and still run the same number of calls per day!

When a tired, over-worked tech on overtime pay runs a call and gets a turn-down, the company loses money. But your customer service reps are happy because they’ve gotten one more call out of the way and don’t have to struggle with keeping people on the hook any longer; and your tech is happy because it means he might get home that night.

Ditto when a tired, overworked tech on overtime pay runs a call and sells one inexpensive task.

In both of these cases, you would have been infinitely better off not running the call at all. When a tech doesn’t want to run a call, you’re better off not running it at all.

2. Educate your techs on the cost to run a call. I doubt your techs know how much it costs to run a call. Add up every dime you spent last year on everything except parts, and divide it by the total number of calls your company ran (excluding callbacks). You’ll find that it costs several hundred dollars just to run a call. You don’t need to show your company’s financial statements to show your techs that number. Explain to them that on any given call, including pre-paid service agreement tune-ups, when they don’t bring in at least that much money, plus the money spent on the parts used on that call, the company lost money on that call.

3. Provide training on the proper way to perform a pull-and-clean on indoor blowers and indoor coils. It never ceases to amaze me how few technicians have ever actually done either one of these procedures. If they don’t know how to do it, they’ll never bring it up, and addressing the blower and indoor coil is the door you open to all the extra money in this business. The first indoor blower cleaning takes most techs close to two hours. Once they get the hang of it they can get it down to 45 minutes.

4.  Provide training on the proper way to install UV lights. In order to sell UV lights, your techs must have them on their trucks and know how to install them. So, stock them on the trucks, provide hands-on training on their installation, and encourage your techs to install them in their own homes.

5.  Listen in on your dispatcher’s communications with your technicians. Once you hear the dispatcher tell someone, “There are ten more calls to run today and the phones are ringing off the hook. No one is going home until the last one has been taken care of,” you can count on losing money on every single call run for the rest of the day.

6.  Tell your CSRs that it’s okay if someone is unable or unwilling to wait for service. Don’t force your techs to rush though calls in order to capture every call that comes in. You can’t do that during the busy season.

Honesty is always the best policy when it comes to your interactions with customers. Don’t tell customers you’ll get there that day when you know it’s impossible. When it doesn’t look good but it’s still a possibility, it’s okay to tell them you’ll try to get someone there that day.

Finally, if a total stranger calls telling you someone has a serious health concern and you’re busy running calls for your existing customers that appear to have a high financial opportunity, be upfront and tell them you’re too busy and to call someone else. The medical problems of everyone in your community are not your problem, and there is no guarantee that anyone at that home actually has a medical problem. They may just be telling you that to gain sympathy and get you out there quicker.

Charlie Greer is the Tom McCart HVAC Consultant of the Year. For a copy of Charlie’s air conditioning inspection sheet, his “System Essentials” handout for customers, and his “Done Deal” presentation, email him at [email protected]. You can visit Charlie at, or call him at 800/963-HVAC (4822). Become a Facebook friend at