Decisions 2012. A look back, a look ahead.
You always hear from all the pundits and predictors about the economy. And, that advice can change at the drop of a hat, depending on the latest news, rumor, or who’s leading in the polls that day. When it comes to the HVACR industry, we thought a good place to gain some insights would be right at the frontline. These are the people who sell, install, repair, and replace HVACR equipment every day here in the Northeast and across America. The one fact that everyone agrees on is that you can strike a chord with homeowners if you acknowledge their perception of where the economy is headed.
G. Andrew Smith of Bob Smith Air Conditioning, Inc. left no doubt about his biggest concern “The biggest impact on our residential service and replacement business in 2011 was people’s concerns about the economy, and the reduction of energy tax credits,” he said. “We had customers with equipment that was not cooling well or needed major repairs. In the past they would replace the system with a high efficiency system with little encouragement. However, this year they often chose high dollar repairs hoping it buys them a couple of more years.”
In a number of cases customers would review the replacement options and ask about energy tax credits. Then they would take one of the following steps:
- Suffer with a warmer home to get through the hottest months
- Consider high efficient replacement but the $300 credit was not enough to push to higher efficiency
- Settle for either a low efficient R410A system, or
- Replace only the condenser with a dry R22 know the risk of future higher R22 refrigerant prices.”
Dalton Dunbar of Commonwealth Heating & Cooling agrees said that “Going forward I believe we need stability in the market and people’s fears of government standoffs put aside.”
Scott Basso of Steve Basso Plumbing Heating & A/C LLC has a very optimistic viewpoint. “Repairs will soon turn into replacements. We have seen business improve year after year. A lot of delayed service in years past has resulted in more replacement sales. There is pent up demand that will continue to follow through into next year.” Basso added some other thoughts. “The Northern Efficiency standards should push quite a few 80% furnace replacements forward ahead of its implementation next year. This will be a sales focus for us. We would also love to see an end to the dry ship R22 units.”
Andy Ward of Republic Plumbing listed what he considers the most important industry trends to him. “For us, having to compete against unlicensed contractors has been our biggest challenge,” he said. The lack of enforcement with contractor requirements and laws has been a big concern. ABCO shares this concern. Our mission is to exceed expectations and maintain the highest standards. This applies not only to the products we sell, but to whom we sell to. We only do businesses with companies and professionals that are licensed, trained and properly certified.
Other notable ideas keeping HVAC contractors on their toes include:
- Flat rate pricing. A contractor said, We did not fear the “recession” and grew 35%+ YTD. Our goal was 30% for 2011. Also we had growth in the last 5 years with each following year improving over the previous.
- Home performance contracting. Here is what one HVACR contractor had to say. “We wanted to be involved with the home performance contracting side of the home repair industry, especially since a great deal of it revolves around HVACR,” he said. “I did not want to be behind the curve on this coming trend. This is a real eye opener and if HVACR contractors don’t start now they will become subcontractors to that industry.”
Brian Braley of Guymon Heating and Air Inc. said that all of the events of the past few years have made him a better contractor going into 2012. “These conditions have created a climate that has made us better as a business. We have become better at providing service for more customers than ever before. Service sales have rocketed which have made us step up.“This has been a blessing in disguise because it forced us to be better and more efficient at what we do.”
At ABCO, we look forward to taking on whatever the New Year brings by always striving to find better ways to help your business. We invite you to take full advantage of our Package Deals, our innovative Mitsubishi and Luxaire Dealer programs, the expanded training available at ABCO University, and to share in our experience and knowledge in HVAC and Refrigeration. Here’s to a prosperous 2012.
