John R. Hall

I’d like a little sympathy, please. I live in Michigan, the incredibly beautiful state with an abundance of lakes and streams. It has a sparsely populated and beautiful ‘Up North’ country, and a busy, bustling metropolis in the southeastern corner (otherwise known as metro Detroit). For that I expect no sympathy (maybe a little envy).

But for all of its beauty and natural resources, Michigan is a troubled state. We rank at or near the bottom in economic growth among U.S. states and at or near the top in unemployment among U.S. states. Many businesses have closed and left thousands of workers to fend for themselves. Property values have dropped and foreclosures are up. People have found that they have little or no equity in their homes since the values have gone down.

In other words, Michigan is in a mess economically. Thank goodness for the tourist dollars - they keep the economy going. But for people who live and work in the Great Lakes State, these are tough times. OK, cue the violin music now. Let the symphony, er, sympathy begin.

I have spoken with HVAC contractors in Michigan and there has not been a lot of optimism in their voices. While many should be rejoicing for the above-normal temperatures we’ve had this summer, it has done little to pump up the revenue levels to what one might consider healthy profitability. It could be better classified as unhealthy survivor-ability.


I can only imagine what other parts of the United States and Canada are feeling right now. Consumers have been walking a fragile line - economically speaking - for the last couple of years. New housing starts are down in many areas of the country, and while the commercial real estate markets have shown some encouraging signs of a rebound lately, there is still too much negativity and not enough optimism for an economic turnaround.

I’m curious how all of this bad news is affecting the HVAC trade. Has it been bad enough for businesses to lay off people or cut back on their hours? Do contractors and distributors have to rethink how they compensate their employees, i.e., wages and benefit packages? What about marketing and advertising? These are usually the first things to be scaled back during tough economic times and, as many experts will say, are the last things that should be scaled back.

But all of these things added up cannot be as bad as having to close a business because of economic conditions. It’s a fact that most businesses will fail within the first five years of existence but often because the owners didn’t know the marketplace, didn’t have the experience to run a business, or were underfunded to begin with. Seeing an established business go under because of the local economy has to be heartbreaking and discouraging. Yet I am sure - without any concrete evidence - that some HVAC businesses have gone this route.


If I had a cure for economic woes I’d be laying on a beach somewhere with my wireless laptop, sipping on margaritas, and not answering to anyone anymore (except my wife). But there have to be things that businesses do to fight a downturn in the economy.

One of the most obvious counterpunches is to have an established service agreement program where you can lock in customers for a multitude of years, ensuring that you will be in their homes at least once a year to perform routine service and maintenance and getting the inside track on installing replacement equipment when service is no longer an option.The NEWShas published many success stories about service agreement selling, which can be found in our online archives at

Other businesses have added extra services or products to fight the ill effects of a slumping economy. For example, I know of contractors who offer generators and fuel cells, which complement the product lines they already sell. Others have added services like IAQ testing and whole-house diagnostics. Being able to sell energy efficiency and fuel savings is a big deal, especially in tough economic times.

I’d like to know what you do to keep your employees busy and keep the black ink flowing. Please e-mail me with some of your good ideas and I’ll share them in future columns. Or maybe I won’t share them - if the economy turns around.

Publication date:09/17/2007