HVAC Residential Market / HVAC Light Commercial Market / HVAC Commercial Market / Business Services

ACCA Examines Performance Contracting

Meetings Focus on Comprehensive Contracting Energy Solutions

November 11, 2013
Trans

AUSTIN, Texas — Home- and building-performance contracting is gaining momentum, as illustrated by the recent Air Conditioning Contractors of America (ACCA) Building Performance Forum sponsored by The NEWS. The second annual event, which took place in Austin, Texas, saw a 19 percent increase in contractor attendance.

Performance-Based Contracting

Allison Bailes, president, Energy Vanguard, Decatur, Ga., began the program, speaking about the importance of home performance in regards to energy savings and profitability.

“The industry is changing. By the time you have it figured out, you are wrong because things are changing that quickly,” he said. “You have to keep up with what is changing. We know a lot more about how houses work than we used to, so we have to incorporate that. The best HVAC contractors are getting into home performance, and they understand that comfort and efficiency is determined by more than just the HVAC system.”

Bailes preached the idea of viewing the house as a system. In addition to the normal HVAC work, he highlighted insulation and air sealing as items a home-performance contractor should investigate.

“Insulation contractors could be your enemy or they could be your ally. There are many ways to do home performance,” he said. “One of them, if you don’t want to take that work into your business, is you can align yourself with an insulation contractor who does the work so you can cover all the bases. You work out an agreement so you both make money at it and the home gets fixed properly. Here is another thing; they are highly interested in home performance, and they are looking to find an HVAC contractor to partner with.”

Bailes also pointed out that the only way to fully solve a customer’s comfort complaints is to become a home-performance contractor. By looking at the house as a system, a contractor can solve IAQ and efficiency problems also.

While some contractors just look at the mechanical system, Bailes told the attendees to make sure they look at the distribution systems also.

“And that means ducts. Ducts are horrible in most houses,” he said. “Some people think they can make more money just switching out boxes. But guess what, if that is your business model, you are in a race to the bottom because that is what everyone wants to do. That is the old way. Homeowners are getting smarter. They go to the Internet and search for answers to their questions rather than just searching for a company. You are doing them a disservice if you are just switching out boxes.”

HVAC Learning Labs

In addition to the opening general session, attendees also sat in on learning labs where they were educated by their peers. Adam Gloss, vice president of Bel Red Energy Solutions, Mukilteo, Wash., talked to his fellow contractors about how to generate home-performance leads. Gloss said the best customers are the ones you already have. He stated this because:

• They cost you nothing;

• Competition is limited or nonexistent if you do a good job; and

• Home performance moves the sale cycle from a single transaction to multiple purchases.

Gloss recommended that once you have identified these individuals, you need to make them an offer they can’t refuse. Bel Red Energy Solutions has found the best response is a call to action that is low-cost and high-impact. In this case, people are looking for product and services they need anyway. The company is looking to get in the door through tune-ups or plumbing inspections.

“Ultimately I don’t want to give my time away. I don’t do anything for free. We tried. My closing rate went to 20 percent and I will never do it again,” said Gloss. “I think the customer needs to have skin in the game. He needs to give something up that shows he has serious interest. I will make him a good deal, but nothing comes for free. If he won’t pay for something, then he won’t pay for anything,” Gloss said.

The company has found that consumers rarely buy the entire project at once, due to cost. They piecemeal it together, but, over a few years, the project can cost tens of thousands of dollars, said Gloss. Bel Red boasts grand success in target and direct marketing.

“For pricing, you want to find the sweet spot. Our sales conversions for home performance average between 85-93 percent,” said Gloss, acknowledging multiple gasps from the contractor crowd. “That is a real number. It is real because I don’t give things away. I am going out to talk to people who have real problems and they want to solve them. For us, the price point is $99-$150. Trial and error will tell you your number,” Gloss said.

Additional learning labs focused on creating a customer experience, transitioning to a building-performance contractor, and selling the commercial side. The event ended with ACCA Building Performance council chairman Ellis Guiles, vice president of TAG Mechanical Systems Inc., Syracuse, N.Y., providing a wrap-up presentation on what everyone learned from the event.

The contractor response to the event was overwhelmingly positive.

“It was really beneficial to have contractors share information on how they have been successful doing home performance,” said Bernie Sweeney, vice president of sales and marketing, Oliver Heating and Cooling, Morton, Pa. “There were several contractors who provided a wealth of information that I can put into action when I get back to my business.”

SIDEBAR: Service Forum Sees Spike

In conjunction with the Building Performance Forum, Air Conditioning Contractors of America (ACCA) and The NEWS also hosted the sixth annual Service Managers Forum. This event saw a 12 percent increase in attendance over the previous year.

The day-and-a-half event kicked off on Oct. 3 with an entertaining opening session that featured Jason Young, a former high-level manager for Southwest Airlines, discussing building teams that can grow and succeed together. He shared his experiences working with Southwest and showed attendees how they could take those lessons back to their companies and inspire their teams and move to new levels of success.

The event also featured 10 learning labs that covered everything from how to hold service meetings and adding new services, to how to attract great salespeople and handle poor performers. The learning labs were presented by some of the top contractors and service managers in the country and leading industry consultants.

The Service Managers Forum wrapped up with one of ACCA’s most popular sessions, “I’ve Got An Idea!” featuring Vince DiFilippo, owner, DiFilippo’s Service Co., Paoli, Pa. During this session, attendees stood up and shared some of their best ideas for growing their businesses, rewarding their employees, and overcoming some of the toughest challenges they face on a daily basis.

“There was so much information available for service managers at this event. It was very helpful and I left with a lot of great ideas to implement back at my company,” said Louis Vannicolo of Brandywine Valley Heating & Air Conditioning in West Chester, Pa.

Publication date: 11/11/2013 

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