Turning business dreams into reality
May 1, 2007
LAKE BUENA VISTA, Fla. - The Air Conditioning Contractors of America is having the kind of success trade associations dream of. The group has seen growth for the fourth straight year. Its state chapters are also going strong, as two Florida chapters merged into one statewide group.
Paul Stalknecht, the ACCA’s president and CEO, had the chance to brag about the association’s recent accomplishments during the group’s March 5-8 convention near Orlando, Fla.
Organizers say approximately 1,800 people attended the three-day event, which featured keynote speakers, a manufacturer CEO roundtable, a trade show and business seminars.
The theme for the conference was “imagination in action,” and each educational session and guest speaker aimed to show ACCA attendees how they can make their business dreams into fact.
“If you can imagine it, you can make it a reality,” said Stalknecht.
Held hostageFor contractors who are imagining a more profitable company without being shackled to their desks, the ACCA presented a seminar called “Are You a Hostage in Your HVAC Business?” March 6.
The session was led by John O’Connor, president of HVAC Smarts and owner of O’Connor’s One Hour Heating and Air Conditioning in Hastings, Minn.
O’Connor told the audience that his residential service and replacement company did $3.6 million in business last year.
“There’s nothing special about $3.6 million,” he said, adding the company did it with only 19 employees.
O’Connor’s One Hour Heating and Air Conditioning has had to deal with many of the challenges that HVAC contractors encounter, including competition with service-providing utility companies. O’Connor said his company lost 25 percent of its customer base due to such competition.
To keep customers coming back, One Hour instituted monthly service agreements. Instead of customers renewing an agreement each year, they’re automatically billed each month. O’Connor said this prevents customers from forgetting to renew the agreement. With this strategy, the company saw an increase in agreement renewals from 40 percent to 90 percent.
O’Connor said that being competitive in the HVAC market is also about creating operations standards that the whole company will follow. This includes retaining technicians who go beyond basic customer service. In general, he said, 10 percent of employees need to go.
“They’re not doing us any favors” by staying with the company, he said.
For the other employees, O’Connor said owners need to ensure they are making a good impression, whether on the phone or during a service call. O’Connor said that he has driven with his technicians and recommended that other business owners do the same. He said you never know how the employee is doing until you see them away from the office.
After standards are in place, owners need to think about whom their replacement will be.
“The culture in your company is what happens when the boss is away,” said O’Connor.
Businesses need to foster an environment where the employees are operating the company properly even when the boss is gone.
Finally, O’Connor discussed pricing.
“Poor pricing will hold you hostage forever,” he said.
For the rest of the session, O’Connor gave attendees tips on service and replacement benchmarks, and how much owners should be charging based on the number of employees they have. He also gave them calculations for what each technician should be selling each month for the company to reach its goals.
For technicians who make their goals and follow directions, O’Connor says you should put their names “on the wall where everyone can see.”
Business opportunitiesIt’s not enough for heating and air-conditioning companies to just fix and install systems. That is why the ACCA held several sessions that gave contractors advice on new business opportunities.
Jeff Miller of Al-Don Service in St. Louis was the speaker for “HVAC System Cleaning: Meeting Customer Needs and Adding to Your Bottom Line.”
The March 6 session discussed the ACCA’s proposed standard titled “Restoring the Cleanliness of HVAC Systems.” The standard was released for public review Feb. 26, and is awaiting approval from the American National Standards Institute.
Miller said the purpose of the standard is to provide minimum requirements for cleaning HVAC systems in accordance with manufacturers or customer criteria. The ACCA also believes that by creating a procedure for cleaning HVAC systems, contractors will be able to offer a service to customers that other professionals cannot.
Larry Sambrook of the Indoor Air Quality Network and Glenn Fellman of the Indoor Air Quality Association were also at the session to provide further information on the standard.
Both Sambrook and Fellman told attendees that the ACCA is not telling contractors they need to clean ducts. But if an HVAC system has an abnormal amount of dirt or debris, the standard will provide guidance on how to restore the system.
“This is an additional tool in your toolbox,” said Sambrook.
Fellman explained that when it comes to cleaning ductwork, a company does not need to have a licensed HVAC technician or contractor to do the work. But he said that a clean system is more than just dirt-free ducts and air handlers. And nonlicensed technicians cannot clean the inside of an HVAC system.
“By having an ACCA/ANSI standard, you have more of an opportunity,” he said. “This is an enormous advantage in the marketplace.”
Attendees of the session were provided with copies of the first draft, which covers restoration, post-cleaning products and usage, and cleaning verifications.
‘Green' buildingThe biggest business opportunity, many HVAC associations say, is environmental or “green” building, and the ACCA did not leave the topic off of its agenda.
“LEED the Way: How Commercial Contractors Can Benefit from LEED” was hosted by Ellis G. Guiles Jr., director of sales and marketing for Tag Mechanical Systems Inc. in Syracuse, N.Y.
The session started with the very basics of green building, including an introduction to the Leadership in Energy and Environmental Design program. Guiles explained that the LEED building-rating program was first established by the U.S. Green Building Council in 1999.
Currently, there are several LEED ratings for buildings, including new construction and major renovations, existing buildings and commercial interiors. Guiles said that the USGBC is developing a rating system for core-and-shell construction, new homes and neighborhood developments.
Guiles said that more and more building owners are looking into sustainable design and obtaining LEED ratings, so “we as mechanical contractors need to be on top of it.”
He also explained that while some building owners choose to make their buildings “green,” some cities are requiring it. Guiles said the city of Syracuse, where he works, mandates that any new building must have a LEED rating.
Whether building owners want lower energy costs or states require sustainable buildings, Guiles said contractors should start exploring this opportunity because “it will be a moneymaker.”
The remainder of the session was used to explain to contractors what would be expected of them to comply with LEED standards. For example, commissioning is required on all buildings, as well as minimum energy-performance levels and refrigerant management.
Guiles told the attendees that when it comes to green building and sustainability, the mechanical contractor has one of the most important roles.
“Most building deficiencies are in the HVAC systems,” he said. “Most significant problems exist with the air-distribution system.”
Guiles told contractors that they need to be more than just “code compliant” when offering sustainable design. They must also incorporate commissioning into their design process and educate their customers.
The ACCA will hold its 40th annual convention and trade show Feb. 5-7 in Colorado Springs, Colo.
Confessions of a CEOThe Air Conditioning Contractors of America may not have been able to get any major company secrets, but they were able to get the CEOs of four major manufacturers to open up to contractors.
The ACCA held a CEO/contractor forum at the association’s annual conference March 7 in Lake Buena Vista, Fla. The forum was sponsored by Snips’ sister publication, the Air Conditioning, Heating and Refrigeration News, and moderated by editor in chief Mike Murphy.
The forum has been an annual event at the ACCA conference, but this year, the association decided to let the CEOs “belly up to the bar.” Murphy played “bartender” at the event, serving drinks and contractor questions. (Don’t worry; real alcohol wasn’t served.)
Visiting the “bar” was Dave Pannier from Trane Co. and American Standard, David LaGrand of Nordyne, Tom Huntington from Johnson Controls and Halsey Cook from Carrier Corp.
The government-mandated 13 seasonal energy-efficiency rating, which required contractors to install only 13-SEER systems after January 2006, was a popular topic at “the bar.”
“We’re glad it’s over,” LaGrand said. He noted that contractors did a good job of adjusting to the change and there were few “hiccups” in the industry with the supply chain.
Pannier said that when it comes to complying with 13-SEER regulations, the “industry as a whole has understood the importance of matched systems.”
Green building was also a major topic. Moderator/bartender Murphy said some contractors are not finding “the ‘green’ in green” building.
“Some of the most successful contractors say they are going to be an energy consultant,” said Carrier’s Cook. “Most jobs have a broader vision of the home besides heating (and) cooling.”
Pannier said that sustainable design will not being going away, and the Leadership in Energy and Environmental Design program is “alive and well.”
He also said that the shift to 13-SEER has shown that consumers are willing to buy higher-efficiency equipment.
In the area of contractor and manufacturer relationships, one question centered on what companies are doing about advertising their products.
Johnson Controls’ Huntington said there is a “tendency to stop advertising when the economy isn’t doing well, but this is the most important time to do it.”
But where do manufacturers focus their advertising the most? On homeowners or the contractors?
“Our focus is on the independent contractor,” said Huntington. He also said that Johnson Controls is focusing much of its attention on contractor training.
“When we look at how equipment is sold,” said Nordyne’s LaGrand, “85 percent of the decision is made by the contractor.”
In regards to what manufacturers are doing to help contractors, Huntington pointed out Johnson Controls’ Business Training University, or BTU continuing-education program. The program is intended to help York and Johnson Controls dealers stay competitive.
Cook mentioned the Carrier Alliance Program, which he said “continues to help the contractor sell the value of higher-efficiency systems.”
When a contractor focuses on offering higher-efficiency equipment, Cook said he’s “never seen a contractor’s business that wasn’t successful.”
For reprints of this article, contact Jill DeVries at (248) 244-1726 or e-mail firstname.lastname@example.org