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    Challenges Collage

    Challenges & Changes

    Nov. 30, 2022
    In a year of regrouping, the best HVACR companies focused on things they can have an impact on within the larger issues of culture, recruiting, scheduling, supplies and general office management.
    This has been a year of regrouping. After the pandemic lockdowns of 2021 that affected staffing, scheduling and supply access for service companies, 2022 was a
    somewhat smoother ride, with a better day on the horizon. Challenges remain, but the best HVACR companies have focused on the things they can have an impact on within the  larger issues of staffing, scheduling, supplies and general office management. As Bud Hammer writes below, the business isn't going to become any less competitive, so strategize and restrategize as often as you must.- Terry McIver

    Thanks to Bud Hammer, Vince DiFilippo, Nathan Coker, Renee Lucas and Darryl Robinson. 


    Employee Engagement, Recruitment Campaign, Value

    By Bud Hammer, President, Atlantic Westchester Inc., Bedford Hills, NY

    Atlantic Westchester is a NY Metro commercial HVAC service contractor. As the pandemic gets further away, we are still dealing with the rippling effects of a changed commercial building usage model, inflation, supply chain issues, etc. We have been forced to pivot, re-strategize, and figure out how to continue to run a successful business in our ever-competitive marketplace. Fortunately, we have retained many of our long-term service accounts and focused on improving customer service to strengthen the relationships built on trust and integrity. However, many challenges presented themselves, such as the “great resignation” and a downward turn in infrastructure investment.

    Brainstorming for Replacements 

    To combat the challenges, we first focused on our staff. We had a few technicians and key employees leave due to retirement, relocation, or career direction change (happily, only one went to a direct competitor). Finding “replacements” in a new competitive arena forced us to think outside of the box so we could attract talent that would help our company continue to grow and succeed. After brainstorming with consultants, networking contacts, and the management team and reading several resources on how to build a great organization, we focused on improving our culture and transparency. Engaged employees would improve the team, and now we needed to walk the walk and spread the word. Also, retaining our remaining team was crucial so that any improvements would be mutually beneficial.

    'I challenged the local union on their recruiting strategies and training program structure and held them accountable for doing their part.'         
                                                           - Bud Hammer

    Being a union contractor and facing an industry-wide labor shortage ramped up the challenge since experienced, competent technicians were hard to find, and we weren’t going to start poaching. As the company’s owner, I challenged the local union on their recruiting strategies and training program structure and held them accountable for doing their part. Much to my amazement, they listened, and I saw a change in momentum to help us identify and find quality-minded technicians through various recruitment strategies. I also volunteered on the Joint Apprentice Training Committee (JATC) and expressed the need to improve recruitment and education for the future of our industry. Marketing, contacting other locals for best practices, involving the state pipe trades association for a week-long campaign tour to recruit in our area, put boots on the ground to attract new members. Parallel to that effort was improving our culture and encouraging our field techs to spread the word that we are a great company to join.

    Management Makeover

    While the field efforts were developing, we also focused on rebuilding the management team. We discovered we potentially had the folks already in place, but they needed buy-in for increased responsibility and professional development to elevate their value to our organization. Our current operations director is on track to be our general manager, one of the long-term field techs was promoted to field service manager, and a few other promotions took place that allowed existing employees to rise the ladder and our company the opportunity to continue improving our business model. As I write this, I am happy to report that our team is the strongest its ever been, and there is an energy that wasn’t there before. While folks are still learning, they are engaged, motivated, and on board with helping our company be its best version of what we can be.

    'We changed our focus from pitching service agreements as the typical market model to a niche-type, all-inclusive model.'- Bud Hammer

    As we rebuilt, profit wasn’t the focus. However, we realized that revenue was required to invest in our human resources. We changed our focus from pitching service agreements as the typical market model to a niche type “all-inclusive model” where budget control and contractor accountability became the topics of discussion with current clients and new prospects. The “pay one price” model was more common many years ago but faded away as price became the focus of many client transactions. By being different and finding clients that were yearning for a value-based relationship, we started closing deals on the all-inclusive service agreement. While it is a risk for us to cover repairs with parts if things break, we are raising the bar on doing a better job of preventive maintenance (beyond filters and belts). We can demonstrate several financial benefits over the lifecycle operational cost. No more “your compressor failed, and it costs this much $ to replace.” Unfortunately, the compressor failed, and we have a replacement on its way and the labor lined up for a quick repair… it doesn’t cost any extra—no need to find funding for the unexpected event. We are partners now, not just another vendor.

    As we recover from the pandemic and adjust to the evolving industry, we have tried marketing campaigns, courted potential clients that chose price over value and lost a few relationships for various reasons. Only some things have worked, but the positive change in our culture and unique approach to the marketplace has built momentum that should help us continue growing and succeed as a value-based service leader in our market.

    Financing, Software & Supplies

    by Vincent DiFilippo, President, DiFilippo's Service Co., Paoli, Pa., and Contracting Business Advisory Board Member

    "One of the things that we really pushed in 2022 was consumer financing. We started to include an option to finance the job for 60 months at 0% on all of our new
    pricing a little closer to their offering. Of course, we are always higher in price due to our providing so much value with our installations. We realized a 22% increase in sales due to offering financing.

    New Software

    We also switched software companies to Field Edge. The program has enabled much improved client service with the ability to provide the client with all needed information about their system(s) instantly. Scheduling is easier, faster, and more accurate and DiFilippos is very focused on providing on-time, convenient service. It is what gives us the advantage over our competition. The program has also made us paperless as far as technicians are concerned. Technicians sometimes do not have the best penmanship and also forget to write down critical client info like equipment type, any accessories, client email address, important notes like “dog aggressive” etc. The tech can enter all information, parts, work done, pictures of equipment, client signature, and send it to the office. Done. This program has also reduced the work load on the office staff as they no longer have to hand process invoices and do filing. This has enabled them to focus on client satisfaction process’s, agreement plan mining, better social media programs etc.

    'The tech can enter all information, parts, work done, pictures of equipment, client signature, and send it to the office. Done.' - Vincent DiFilippo

    We handled the supply chain issues very well. In late spring, we bought furnaces in both 80% and 90% efficient and the 3 most common BTU capacities and stored them in our shop. We could get the client heat more quickly than most of our competitors. We also began to cannibalize furnaces and heat pumps (that we removed from homes replacing their systems with new equipment) of critical “mission critical” parts ie; draft motors, gas valves, circuit boards, etc, and stored them for the upcoming winter season not knowing if parts would be available. This allowed us to temporarily provide heat to our clients until the OEM part was delivered. It also enabled us to close new jobs because we could provide a used part to hold them over until the new equipment was delivered and installed. We also acquired many new clients whose HVAC company could not get the replacement part for weeks and DiFilippo's Service was able to give them heat with used parts until the new part was delivered.

    Software, Service Management, Training

    by Nathan Coker, president, Stanfield Air Systems, Athens, Georgia, one of American Standards'  four, 2022 "Building a Better Standard " award-winning contractors.

    The only thing that stays constant is change. Change is something that we have worked into our culture over time and is ongoing to grow and progress. A few of the things that we have implemented over the past year to improve efficiency and operations are update service software, promote a full-time service manager and, making ongoing training a priority.

    'Make sure that you select a software that is right for your business.' - Nathan Coker

    One of the major things that didn’t go according to plan was implementing the
    new service software. We made poor decisions at the end of last year and selected a software that didn’t work well with what we were trying to achieve. Unfortunately, we were in contract with them but had to pivot nonetheless and that is when we abandoned the lacking software and brought on ServiceTitan. Doing so has provided our clients with all of the information that they crave almost instantly. In a society that has instant information in the palm of their hand we saw the importance of getting with the times and providing this feedback for them. We are now out of the first company's contract, but we learned a valuable lesson: make sure that you select a software that is right for your business. 

    Lead Tech now Service Manager

    We decided to promote our lead service technician to a full-time service manager at the beginning of 2022. We had eight service technicians that were very good but only had a lead tech in the field to call upon for support. Pulling the lead tech out of the field to be full time support and manager was game changing. All of our techs average tickets went up and recalls went down. Productivity in the service department has skyrocketed with less people.

    'We have seen not only the younger employees progress at a much higher rate, but the experienced employees sharpen their skills as well.' - Nathan Coker

    The final piece, making training a priority, came from an initiative that we started a few years back. We have been recruiting high school students and bringing them in on apprenticeships and hiring them when they graduated. They all did well with on the job learning but were not progressing at the rate we needed them to. By sending them to offsite classes and holding weekly trainings, we have seen not only the younger employees progress at a much higher rate, but the experienced employees sharpen their skills as well.

    Watching the Numbers, Marketing Reviews

    by Renee Lucas, co-owner, LCS Heating & Cooling, Indianapolis, Ind.

    For the first time, we’ve kept our monthly budget, departmental revenue goals and membership goals in front of us. Each week, we review where we are relevant to each goal. This has given us the information needed to tweak our follow-up process, create outbound plans and update marketing in the middle of the month, rather than waiting to see how we finished at the end of the month. We also share this information with our entire team each month so everyone is on the same page. As a result, we’ve hit or surpassed our goals every month but one this year.

    'One of my personal business goals this year was to make marketing a priority. This included timely approvals for my marketing company, consistent social media planning, updated photos and planned promotions.' - Renee Lucas

    One of my personal business goals this year was to make marketing a priority. This included timely approvals for my marketing company, consistent social media planning, updated photos and planned promotions. I’m working on staying a quarter ahead of where we currently are. I truly believe the consistency in our marketing has contributed to our growth this year.

    Systems Now, Ductwork Later

    by Darryl Robinson, owner, Robinson Air HVAC, Lawton, Okla.

    We do a lot of duct replacements, but the summer temperatures in attic spaces
    exceeds 100 degrees. We talked it over with customers, and those whose flex ductwork is workable for a short period of time agreed to have the new duct installed in September. If it costs $5,000 for the ductwork, we install the system and put the $5,000 into an unearned income account. When the ductwork is installed, the $5,000 goes into an earned income account.

    'I explain it’s not safe for technicians in the hot attic and I have not had one complaint.' - Darryl Robinson

    We were able to sell more systems, because the technicians are not tied up replacing old duct systems during the busiest time. We do install after install after install. The older ductwork is still workable for that short period of time. We hook it up to the old flex ductwork to get it running. I was concerned that customers wouldn’t want to pay for a duct system and wait two months to have it installed. But, we’ve been business for 11 years. We have a certain clientele that is typically older with disposable income. They’re choosy but also good people. I explain it’s not safe for technicians in the hot attic and I have not had one complaint. They like things done a certain way but are also good people. They don’t want our technicians in an unsafe situation either.