Consider adding 'verticals' to expand your company's offerings
The hardest part of any service job is getting the project. Once you’ve acquired a customer, the next goal is to create value on the job through quality service, build trust with the client and, of course, make money.
Too many HVAC companies are stuck in routine work that yields little annual growth.
Building your business is more than just getting new clients. Of course, that’s a critical component to your success and should continue to be a goal for any organization. Owners and managers should consider adding new services to maximize their return on each job. By offering new “verticals” — aka services — you can drastically expand your earning potential with customers without geographical expansion or acquiring large numbers of new clients.
Core offerings should remain your company’s backbone. But don’t let that distract you from the growth potential available through various add-on services. For example, some HVAC businesses may only focus on residential and commercial duct cleaning which, for some, is more than enough work to keep the schedule busy. However, that same customer may also have a need or want for dryer vent cleaning, mold remediation, chimney cleaning, appliance service or repair, fire damage work or even carpet cleaning.
Some of this may seem far-fetched, but many businesses have adopted some of these and have seen tremendous growth without expanding their coverage territory. Also, the tools and/or certifications required for these new services are minimal and sometimes already on your trucks. Duct cleaning tools can be used for dryer vents and chimney cleaning with minimal accessories to accommodate each service’s specific needs. Air-conditioning service crews can easily be trained in appliance maintenance and repair. From a remediation standpoint, servicing fire, smoke and water damage projects are often bundled together as well.
New verticals are not just tied to new services. They can also include value-added products to be offered with specific services.
Kelly Dexter, a managing partner at Air Quality Control Environmental, a south Florida-based HVAC service company, said the key is choosing the right products or services.
“In order for verticals to be successful, they must complement or enhance your primary service. You are often called in for a basic cleaning. Once the customer’s issue(s) are identified, we are able to custom tailor a solution,” she said. “Customers may just call for a duct cleaning, but there are other services that we could add to turn their existing system into an air-purification system. By adding products, such as air purifiers and custom air filters, we are able to add a long-term solution to their problem. Anyone can just wipe the dust off of the grille, but we should try and look at the entire indoor environment and make suggestions that will enhance comfort as well as address their issues.”
For most HVAC companies, the regional nature of the business is a common limitation to growth. It’s normal to bring on new customers within 50 or so miles from the home office, but it’s not recommended to go well beyond the service area to get a new job. In other words, a New York City-based HVAC construction business will work throughout Manhattan, but would not be savvy for them to go to Virginia for a basic duct-cleaning job.
Understanding such limitations is important because it highlights the need to maximize the return from customers in a given market. To do so, developing new verticals is a smart way to expand your business in the same territory with the same customer base. In fact, you may bring on new customers in your regional market simply because of the new services offered.
Air Quality Control Environmental realized this and created a sound strategy to stay focused on core offerings, while offering additional services to their current market.
“The best way to maximize any limitations is to become educated and trained in whatever service you provide,” Dexter said. “Mold, duct cleaning, dryer vent cleaning, etc., are all tied, but require different skill sets. Offering a full spectrum of service is just as important as being very knowledgeable in each service.”
Offering new services
How do companies begin to adopt new verticals and market them to existing clients? Look at your existing customer base. Parlays are not just for Las Vegas. You can piggyback one service call into additional services and/or products, too. This applies to single-family residential jobs, multifamily housing projects and even commercial applications.
Overall, determine what your company can do to add new products or services to generate a bigger return on each job. Do you have the tools, technicians or certifications in place to earn more on each job? Are the products you advocate stocked on the trucks, so they can be sold and installed at the job site?
“Timing is key,” Dexter said. “While you are in front of the customer, you can offer them a full package. The way to do that is train your techs properly, so they feel confident in what they are offering and explaining to (the techs) that every job is a chance to offer additional services.”
Challenge yourself, challenge your business and challenge your technicians to grow your HVAC business. You already have the customers. All that’s left is to offer enhancements that complement your core.
Cliff Budnick, who holds a master’s in business, is vice president of new-business development at In-O-Vate Dryer Technologies. This article is based on a presentation Budnick gave at the National Air Duct Cleaners Association’s 2016 annual convention.
For reprints of this article, contact Jill DeVries at (248) 244-1726 or email email@example.com.