Here are a few of the things I’m referring to.

CONSOLIDATION PROCLAMATION

Many years ago, a few large entities started buying up all the larger well-known companies in some areas. At the time, it seemed that all the “little guys” were going to get squeezed out. They had lots of processes and capital to support the effort. A number of publicly traded utilities were creating subsidies and attempting to do the same thing. Lots of small town companies thought this was the end for them. They would never be able to compete with huge companies offering the same services at incredibly lower prices. Well, the fact is, they could simply not offer the same high-quality customer experience in their markets at that low of a price. In addition, it soon became obvious that a $1.5 million company added to a $2.3 million company did not become a $3.8 million company. The result was a far lower and more disappointing number. In a similar vein, there were, and still are, opportunities in franchising. It’s not uncommon for small companies to see franchises open up in their towns and start worrying about losing a good deal of their customer bases. A nationally known name and an excited new owner or branch manager with goals to achieve can be unsettling to the average small business owner with too much on his plate to begin with.

Now, most everyone has big-box stores in their towns. What happens when our neighbors go into these hardware stores or a warehouse conglomerates and walk by kiosks offering HVAC equipment? When this first began, contractors seemed to either yearn to sign on as participating contractors or lamented the demise of these booths. Our first thoughts are always, “How am I going to be able to compete with that?” In today’s reality, we all know our customers often walk past these displays and they’ve certainly failed to put us out of business.

OBSTACLE COURSE

It seems like every day we hear of a new idea or concept that is somehow going to disrupt our way of going to market and make our companies obsolete. Contractors today must deal with a number of obstacles, including technology, new refrigerants, climate change, government regulations, the U.S. Environmental Protection Agency (EPA), utility programs designed to drain us of all our administrative resources, union domination, manufacturers selling directly to our customers, one-truck companies low-balling our prices, local permitting offices and inspectors who are trying to shut us down with their endless paperwork and inspections, tech companies trying to get into our market with new thermostats, state licensing, Occupational Safety and Health Administration (OSHA) safety regulations, and, of course, the never-ending threat of that key employee who quits working for you and starts a business with a strangely familiar name and logo. Besides this incredible list of challenges, the very nature of the internet and the steady march of technology have the potential to produce even more havoc.

DIRECT SALES

The latest world-ending threat to cross my desk is the direct sale of parts and equipment to homeowners. We already have our customers coming to us asking if we are willing to install systems they bought online. We all know that when we run a service call and tell a customer they need a part, they’re looking up the part online and comparing the cost — with free two-day delivery — to our flat rate book. If you don’t already know it, the “Uberization” of HVAC installations is upon us. Anyone can go online, purchase a system, and obtain a willing contractor to install it with no more information than their address and square footage of the home. With a never-ending trail of competitive roadblocks, how are we supposed to stay in business and maintain our sanity?

It’s as simple as driving in a heavy rain storm. Calm down, keep your eyes straight ahead, hold fast to the steering wheel, concentrate, and keep doing what you know to do.

STAY THE COURSE

All these threats, real or imagined, have come and gone and will continue to come and go. I’m certainly not suggesting you stick your head in the sand and simply keep doing business as usual. Pay attention to trends and market changes and become the expert on new technologies, methods, and the latest products designed to enhance the efficiency and comfort of the systems we service and install. We have to be ever vigilant; however, there never will be a time when excellent high-quality service from a local, trusted company with a well-earned reputation of integrity will become obsolete. Your service department and the relationships it has garnered though a growing maintenance program with genuine high value is the cornerstone of your future success. If you’ve not been devoting a great deal of time and effort to ensure your service department is operating efficiently, profitably, and producing customer cheerleaders, you’re not preparing yourself or employees for solid futures. Make sure every policy and process in all your departments is specifically designed to produce high-quality experiences and the utmost in efficiency to keep your prices as low as possible. There is definitely a storm brewing out there. Instead of panicking, I suggest you work to keep your family of customers and coworkers safe and dry.

Publication date: 2/6/2017

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