Solving the Difficult HVAC Installation Equation
When a customer wants you to install stuff they bought online
Ah, the Saturday morning warriors. The do-it-yourself’ers (DIY’ers). The online shoppers browsing the internet for “deals” and “bargains” to shave a couple bucks off their home service bill — or so they think.
Until they realize that maybe HVAC equipment really was intended for certified technicians to install. So they start calling around, and it goes something like this.
“I got a Nest on Amazon. Can you come install it?”
Or perhaps: “I installed it, but now it won’t work. Can you fix it?”
Some contractors take these jobs; after all, a couple hours’ pay is a couple hours’ pay. Some dabble, and some flat-out refuse the work. Often, it’s less of a deal than it might seem — both for the contractor, who probably realizes that upfront, and the customer, who probably doesn’t.
JUST DO IT
Dave Abel, owner and head technician at Abel Air & Home Repair, falls into the first category. He runs a one-man business in Englewood, Florida, serving Charlotte and Sarasota counties, and he gets at least three or four calls a month asking if he’ll install something the caller purchased online. He takes the jobs, after explaining the implications of installing a product without being able to supply a manufacturer’s warranty.
“The reason I got on board is rather than have that whole battle with them about marking it up more than I actually am,” he said. “Usually, when I give them the price for a smart thermostat, they come back with, ‘I found the same model number on Amazon, and it’s only this much.’ A lot of cases, it’s $70 to $100 less than what I’m charging. I’ll usually state the warranty I have with [the manufacturer], and explain they are sacrificing warranty and possibly tech support buying a homeowner-grade product, compared to the contractor-grade models we offer and warranty.”
At that point, those who know and trust his reputation, and who value the warranty, tend to go with what he has. Those who want to spend the least amount of money upfront opt for purchasing it on their own; Abel tries to steer them toward certain brands and away from others.
“It’s about 50-50, I would say,” he said. “I can show them mine is better, I have the warranty … but I can come put theirs on.”
He offers a flat fee for installation. Details about the warranty (or lack thereof) go in writing.
“That’ll be in the invoice — that they chose to have me install their thermostat, and they’re responsible for dealing with any potential warranty, any defects with it,” Abel said.
When it comes to calls from people who tried, failed, and need to redo do-it-yourself installs, they’re not always very upfront about what happened.
“A lot of times, it’ll start out as a ‘service’ call,” Abel said. “They won’t tell you they tried to put them on. Then I’ll see wires in the wrong place … you can tell. Often they will tell me, ‘Oh, it worked for a few days’ … it’s kind of deceptive.”
In this case, since the customer already agreed to service fee, Abel usually just charges them to change the fuses they knocked out.
“A lot of people have put these thermostats on, had them all summer … finally go to put it in heat mode, and they’re finding out fuses are popping,” he said. “They never tested it.”
Again, there’s no warranty with this work — but that’s all right for some people, Abel said.
“I haven’t really had to go back, but if I did, I’d tell them they saved half the price on the first one, just buy another,” he said. “The people who don’t care about the warranty, that’s how they feel.”
NO SUCH THING AS A FREE LUNCH
Greg Crumpton is vice president – mission critical and technology at Service Logic, a commercial contractor in Charlotte, North Carolina. Contractors hate installing customer-supplied equipment, he said, “because you can’t make any money out of it.”
That’s due in large part to the high cost of labor.
“A guy who runs a building calls, says ‘I’ve got a thermostat to put in.’ All you’re charging for is labor,” he explained. “You charge a truck fee and two hours’ labor, maybe make $50. Had you been able to sell the product, you would have at least made $150, with the markup on the equipment. Contractors have to sell materials or equipment to make money.”
Cutting costs by bypassing contractor-supplied materials often backfires, Crumpton noted, because contractors carry the warranty dollars in the markup for the equipment.
“They think they’re going to avoid the markup from the contractor, but they’re going to wind up paying more for repeat service calls,” he said. “So when they call two days later, I’m gonna tell them, ‘I’m sorry, I’m glad to come out, but it will be on a time and material basis because I don’t have the warranty.’ I’m going to charge them the service — two hours — they’re gonna get a new one from Amazon, and then I’m going to charge them two more hours.”
Service Logic’s policy is to limit this kind of work to existing customers, or customers who have a maintenance agreement, in order to stay in their good graces.
“But hopefully, I’ll be able to explain ... by using us, we’re lessening your risk,” he said.
If someone’s looking for any company just to do an install, Service Logic will turn the job down.
“We have people buy chillers and call us, and we’ll say ‘No, thank you,’” he said.
Crumpton hasn’t seen a noticeable uptick of install requests in the commercial market; the residential market is another story, he said. Recently, he went out and bought an Oculus Go headset for a new virtual reality training program he’s doing at the company.
“As I was in the aisle, I saw all the Nest thermostats lined up in the case, right beside this VR headset. Somebody’s buying Nest thermostats, and they’re trying to go home and wire them,” he said.
For his part, Crumpton tries hard to discourage this. He tells customers a story of one of his employees who ran into a DIY disaster.
“She said, ‘Look, I hate to ask you this, but could I ask you to help me with my thermostat at home? My husband tried to wire it up, and it didn’t work.’ It would have cost her, to have a residential company come out there and do what I did for free, a couple hundred bucks.”
TAKE A PASS
Ask Jim Patterson, president of Orchard Valley Heating and Cooling — a family business in Southampton, Maryland — to install customer-purchased equipment, and he’s got a simple answer: no.
“I skip it,” he said. “I get a lot of emails from clients: ‘I just bought a furnace, can you put it in?’ I say no. For the most part, if somebody calls me, ‘I’ve got this,’ or ‘I’ve tried doing this, and I can’t stop the water from coming out of the wall; can you fix it?’ — I say no.”
Part of it is just good dollars and cents. Even 10, 15 years ago, if a client wanted to buy their own (for example) plumbing fixtures, he’d just skip the plumbing because there were no material costs associated. Plus, Patterson operates on a referral-only basis, and he has plenty of existing clients.
“A lot of guys, if they’ve got a full crew — 15, 20 people — they’ve got to keep the trucks moving,” Patterson said. “I’m not looking to take on another 50, 60, 70 people a year. For me, I really want to take business from a secure source because I don’t want to get burned with someone I’ve never seen before. It’s those who are doing it on the weekend, YouTube it ... I look at it as, if they didn’t hire me in the first place, am I gonna get paid? That 1 percent I do take, I usually regret.”
Patterson also sees his policy as helping protect the trades and the wholesalers.
“I just ran into a guy at my niece’s birthday party who buys mini splits on eBay and puts them in,” he said. “That’s where it’s going. They’re doing it for dirt cheap. No license, they’re not doing the evacuation part properly ... they’ll learn eventually it’s not such a bargain — when it falls apart.
“You’re always gonna get that group of people — I think more and more, because of the internet; there’s a video for everything in the world now,” he continued. “I see it as dangerous. People are doing things they shouldn’t have done in the first place.”
Publication date: 1/28/2019