The Real Reward of Consolidation Is for Those Who Hold Out
Customers will reward HVAC contractors who stick with time-tested values
I apologize for my absence from this great publication. The reasons are good. The first is that we have been extremely busy this year. But that means we have been dealing with the same issues of equipment, parts, and supplies shortages that I am sure all of you have experienced as well. However, don’t consider this as a complaint. It just makes the job a little more complicated.
The second reason is that we spent several months negotiating a new six-year labor contract with our sheet metal union (SMART) labor partners here in the St. Louis area. I mention that because I know there are those out there who don’t feel you can succeed and be profitable as a union contractor. When I hear reports from around the country of the shortages of technicians and the difficulty many contractors have finding qualified people, it makes me wonder. If you need equipment and supplies, you partner up with a local distributor or branch to help you obtain those items. Wouldn’t it seem to make sense to partner with someone who is in the business of providing labor if you are having trouble finding qualified personnel? That’s the business of a labor union.
We attribute our busyness to two factors. The first is that we have had a hot and humid summer. While not as hot as many in the past, it’s hotter than recent summers and therefore very noticeable to our customers. Therefore, the demand has been greater, especially for replacements, than in recent years.
The second factor is one that is almost hard for me to admit. As many of you may know, for many years, beginning back in the 1990s when consolidation first came to our industry, I have been a spokesperson against consolidation and a proponent for the locally owned and operated heating and air conditioning company. I have to backtrack slightly. This summer, we have found that, in fact, there are some benefits to consolidation.
I realize that many owners use selling their business as the exit strategy they have desired. They undoubtedly don’t have the long-term interest of their company name, or their employees, in mind. I don’t fault them for that. When it is time to retire and cash out and the opportunity is there, I suppose you take it. Without getting into my speech about consolidation, here are the ‘benefits’ we have seen to the consolidation taking place in our market.
1. More techs are entering the job market.
The consolidators here are operating under a different business philosophy than many of us. That process turns the service technician, who by training and instinct wants to help the customer by repairing their unit as quickly and cheaply as possible, into a salesperson. Those service technicians, from what we hear firsthand, are only paid on the items they sell to that customer. They are also put into a competitive environment in which their sales are compared to those of other service technicians.
Looking for quick answers on air conditioning, heating and refrigeration topics? Try Ask ACHR NEWS, our new smart AI search tool. Ask ACHR NEWS
For many service technicians, that is not in their DNA. As a result, we have had a number of service technicians put in that position, coming to us seeking employment. They realize that the tactics which they are being required to use are questionable. That has been a positive.
2. Customers are realizing who’s really service-driven.
Another positive has come from the customers of those purchased companies. They are finding out about these new policies and don’t appreciate that treatment. A great example occurred to me last week. I was in a grocery store wearing a shirt with our company logo, and a gentleman approached me. He said he had used a small but reputable company for many years. Although he heard they had been purchased, he didn’t really consider that. However, the service technician who came out for routine maintenance told the homeowner that he recommended replacing the owner’s 10-year-old system. The man asked if there was something wrong with the unit, and the service technician told him that there was nothing wrong, but the unit was 10 years old, had an “old” refrigerant, and should be replaced. (Note: In our area, we find expected life of an a/c to be between 15-20+ years.) The service technician continued his sales pitch, during which the doorbell rang and a salesman, who had received a text from the service technician, arrived to sell the homeowner a new unit. Needless to say the man was very upset as he told the story, and as I gave him my card, we picked up a new customer.
So there: I said it. There can be some value in consolidation — for those of us who continue with the same, honest to the customer policies we have always used. Long live the contractor who sees the customer and not today’s profit as his biggest asset.
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!
