Becoming an expert in residential performance contracting
Home performance contracting has been around for over 30 years but a relatively small number HVAC contractors practice it.
What seems to be a common trend around the industry is many contractors have been through technical training and have a basic grasp of the concepts, yet it just hasn’t worked in their businesses, either due to inability to sell the work or lack of profitability.
Does this sound familiar to you?
For those who don’t know, “home performance contracting” is a term referring to services designed to make a house more energy efficient, comfortable, healthier and safer. It can encompass everything from HVAC tuneups and upgrades to sealing ductwork and adding insulation.
Many customers need this type of work and want it — once it makes sense to them. The easiest first step — and possibly the most logical — is to become a real expert with ductwork systems. If you’re in the field, you’ll probably find at least one home and likely many more where homeowners could benefit from having improvements made to their ductwork. Whether the improvements deal with comfort, sound, system performance, reducing dust or better moisture control, the benefits are real.
So where to start? First, the HVAC construction industry needs to understand how important ductwork is to the life and operation of forced-air systems. Many times, contractors find homes where HVAC professionals have simply swapped an older furnace, air conditioner or heat pump with a newer version and never did anything to ensure the existing ductwork system was adequate.
Testing ductwork involves more than just a tape measure and visual inspection. Most homeowners have never been educated to understand anything different. This is one of the largest differences between today’s equipment and equipment manufactured 20 or 40 years ago. Just ask any consumer if they had to choose which would last longer: an appliance built today or an appliance built 25 years ago? Many would probably say something from years ago.
How do HVAC contractors become experts with ductwork? Start with falling in love with static pressure — or as it is sometimes called, “blood pressure.” Make this simple test a standard process for every visit to a customer’s home, no matter if you’re there for maintenance, service, sales lead or even a new system installation. Testing and understanding static pressure is crucial to knowing how the system is performing (or why it isn’t) and even though static pressure readings won’t tell you the entire story of how a system is performing, it will definitely point you in the right direction of where to look next.
Much of the time you’ll find the ductwork system isn’t allowing the proper amount of air to move through it. So how do we educate homeowners without boring them to death with technical talk? Set up these expectations with customers before you perform this test. Here’s one scenario.
“Next Mrs. Smith I’m going to perform a ‘blood pressure’ test on your system. Just like when you visit the doctor’s office and the first thing they do is put that cuff on your arm and measure your blood pressure, making sure it’s not too high or too low. We have the same test for your HVAC system. The easiest way to think of it is the fan inside your equipment that moves the cool or warm air out of your registers is like the heart in your chest. And the ductwork running throughout your home is like all the arteries and veins running throughout your body. These two things work together to not only make your home comfortable and efficient but also ensure your HVAC system is working like it was designed. Luckily for us, every equipment manufacturer has a maximum rating stamped right on your equipment (show customer the nameplate).Your system is rated for 0.5, so what this means is when we take this measurement we want to be fairly close to this number.”
By setting up proper expectations before taking the test you’ll find the conversation much friendlier when the readings show the system is working under rough conditions. You can compare that with high blood pressure when explaining it to customers. The conversation will vary based on what your readings indicate. Also test the pressure difference the filter and indoor coil (gas furnace systems) cause. It allows you to know if the system’s static pressure readings are skewed based on dirty filters, plugged indoor coils or if the ductwork system is causing too much resistance.
You’ll often find return ductwork systems are severely undersized, air filters are installed too close to the equipment (moving air so fast across the filter and literally pulling dust and dirt through it) and ductwork connections causing too much resistance. Look up total equivalent length calculations in the Air Conditioning Contractors of America’s Manual D. Occasionally you might uncover a ductwork system needing complete replacement either from its sizing or condition.
Once opportunities have been identified to improve customers’ systems, it’s your responsibility to provide the correct solutions. Some customers are going to question why the services are needed, especially if their previous system lasted 25 years. This becomes conversation when you compare how older systems were designed and manufactured versus today’s modern systems. The trade-off is today’s systems are much more sensitive to the environment in which they’re installed. While older systems were built like tanks (just like older appliances) and could be installed in less-than-ideal environments and still provide dependable operation, new systems will simply not work well unless they’re installed properly. This is why consumers read stories regarding HVAC systems that don’t even last 10 years.
Sealing the deal
For the last few years, you may have noticed an increase in projects where HVAC and home performance contractors try to improve a home’s energy efficiency with duct sealing. The benefits of duct sealing are incredible, yet HVAC systems can be severely damaged when it’s not performed correctly. In many situations where ductwork systems already having extremely high static pressure are sealed, it will only cause the system more damage and reduced life expectancy even further.
As you might imagine, becoming an HVAC market expert with residential ductwork systems and services such as duct sealing will open the door to increased opportunities to provide real solutions to your customers. A natural progression starts with testing ductwork and improving it, then performing duct sealing, then insulating and sealing the rest of the home.
A critical element in being successful with any of these transitions is to understand your pricing structure. Many HVAC contractors have failed at transitioning into home performance work simply because they did not price services correctly. You have to know your numbers. Your overhead expenses and desired profit margin must be covered entirely by your labor — material expenses simply become a pass-through with your desired profit margin added to them. With ductwork repairs and replacements (as with most of home performance work) you simply don’t have the material expense to cover your company’s overhead and profit. Even with a traditional HVAC company it is recommended to structure your labor costs to cover your entire overhead expenses and profits to ensure you’re successful.
Where to go next? It’s critical you know your company’s numbers to operate profitably. If you’re struggling with this endeavor, it can be helpful to work with partners. One example is the Nexstar Network (www.NexstarNetwork.com), a member-owned organization committed to the success of the independent residential service contractors. Members can find the details of running a successful business, no matter the trade, tips on following the correct process and delivering amazing customer service. Obviously there are other organizations in striving to do the same thing. Find what fits with your culture the best.
If you don’t already have the technical training, you’ll need to find this resource to give you the confidence in your testing and solutions. Again, there are several organizations to choose from; a popular choice is the Comfort Institute (www.ComfortInstitute.org). They have a great technical understanding of the HVAC industry and providing the training, confidence and knowledge for transitioning into duct cleaning and the entire home performance industry.