An article by Court Cunningham in the ACH & R news recently revealed some interesting statistics about mobile marketing. In it, Court noted that many contractors remain skeptical about the importance of mobile marketing for their business. In it, she said the prevailing wisdom is that people only use mobile devices to search for restaurants, bars, movie theaters etc. However, according to Google's own data, every month there are several hundred thousand searches on mobile devices related to HVAC contractors, air conditioning or heating repair, and installation. The searches could mean a lot of new customers for your business. If a customer in your area were to conduct such a search, would they find you and your website?
Some tips to make sure you're optimizing the answer to this question include:
- Elect mobile distribution for search advertising campaigns. Many major search engine platforms allow advertisers to opt in to have their advertisements appear on mobile searches. Make sure you select this option.
- Verify business information on popular directories. Don't stop with popular search engines like Google or Bing, make sure you include in-app searches on mobile applications a popular mobile Internet brands like Yelp and City.
- Make sure your website renders properly on mobile devices. If you don't have a website, get one now. There is no excuse for today's HVAC contractor not to have a website. Make sure your website is mobile optimized, so that visitors viewing your site from a mobile device see a mobile friendly site. Studies have shown that sites from businesses which don't appear friendly or easy to use on mobile applications are less likely to be contacted.
- Get to the point. Make sure the mobile version of your website features your contact information prominently and doesn't feature a lot of unnecessary text.
Court Cunningham is CEO of yodel, a local online marketing company. For more information call 877-276-5104 or visit www.yodel.com.
By now, everyone in the HVAC industry is (or should be) aware of a rule issued by the Department Of Energy commonly known as regional standards. The standards would mandate minimum efficiencies for gas furnaces, air conditioners and heat pumps for various parts of the country. Various aspects of the industry have been at odds with this law for a variety of reasons, but on March 11 the parties in this case filed a joint settlement motion with the US Court of Appeals for the DC circuit. The settlement agreement now awaits court approval, and the agreement would vacate the regional furnace efficiency standards and restart the rulemaking process, giving stakeholders more opportunities to provide input throughout the rulemaking process. The settlement provides for the following.
The 90% AFUE standard for non-weatherized furnaces in the northern part of the US will be sent back to DOE to begin a new rulemaking process. Part of the problem the first time around was that the industry claimed it was not sufficiently involved and that the proposed law did not adequately address a number of key issues such as how it would be enforced and by whom. The current national 78% AFUE minimum efficiency will still go to 80% in November of 2015, but any new standard on furnaces won't be enforced until 2021 at the earliest.
As far as air conditioners and heat pumps the new regional standard of 14 SEER will go into effect on January 1, 2015 as previously ordered. However, distributors in the South and Southwest will now have an 18 month "sell through" period to purge any 13 SEER equipment manufactured before January 1, 2015. Under the original rule, the industry did not believe that DOE considered the cost of stranded inventory which is now remedied under this agreement.
Under the settlement DOE also agreed not to penalize distributors as part of the enforcement of regional standards. There was a strong feeling among certain aspects within the industry that distributors should not be part of the enforcement process, and under the original law they would have been subject to civil penalties.
Three key industry groups came together to make the settlement possible, HARDI (heating, air conditioning, and refrigeration distributors international) AHRI (air-conditioning, heating and refrigeration institute) and ACCA (air-conditioning contractors association) Now the hope is that the court approves the settlement so the industry can move forward with the process of writing new standards for furnace efficiency and developing and enforcement plan for central air conditioners.
Sources: ACH&R news and Emerson technologies website
A recent survey by Emerson climate technologies found that the majority of contractors participating are unaware of the upcoming standards for residential unitary air conditioning and heat pump systems. In addition to these standards, new part load efficiency requirements for light commercial split, package, and rooftop systems as well as new chiller standards for air and water cooled chillers will be coming into effect.
The survey, which was conducted by e-mail showed the majority of contractors were either unaware of the standards or had little idea of how the standards would affect their business. Very few had started training their technicians or had formulated an inventory or marketing plan.
Even though there are some legal challenges to the exact implementation date, the next round of efficiency standards for residential air conditioning is still expected to apply to air conditioners and heat pumps installed on or after January 1, 2015. Even if these challenges are successful in delaying enforcement date by a few months, contractors should still become familiar with the structure of the new regulation because that is not likely to change.
The last time the industry had an increase in standards was in 2006, there was a large build of 10 seer systems ahead of the implementation of 13 seer efficiency standards. That is unlikely to happen this time because the magnitude of the move from 13 seer to 14 seer is less dramatic and the cost increases driven by this change will be much smaller. The most significant product changes in 2015 will involve moving all split system heat pumps in all regions to the new national heat pump efficiency minimum of 14 seer and 8.2 HSPF. Depending on the outcome of the legal debate going on, contractors can expect to see the planned elimination of 13 seer heat pumps from OEM lines.
Although it is unclear what the specific roles and responsibilities of the contractor, distributor and manufacturer will be in enforcing these new regulations, it is likely all parties will be involved with some aspect of enforcement. In any case, contractors should be able to verify that the equipment they are installing meets the minimum standards provided by the new regulations, and one of the most useful tools to determine this is the AHRI directory which contains the database of all system performance certifications.
"Contractors cannot afford to be unprepared for these regulatory updates. They need to be researching the changes that are coming to their region, talking to OEMs, wholesalers and manufacturers to identify opportunities for their businesses," said Frank Landwehr, vice president air-conditioning marketing for Emerson Climate Technologies. "Now is the time for contractors to be actively seeking information from trustworthy sources."
Sources: ACH & R news; Emerson Climate Technologies website
In the last blog post, we wrote about rule-making from the Department of Energy. In this blog we will talk about The EPA and other agencies that are impacting the regulatory climate affecting the HVAC industry.
The EPA has proposed a modified phase out of hydrochloroflurocarbons (HCFC) that will accelerate the R-22 phase out, according to an article in the News by Kimberly Schwartz. This could also affect the availability of R-22 in the next three years according to Brian Rocky, Dir. residential product management for Johnson Controls. This latest proposal means there wouldn't be any new virgin R-22 manufactured after 2017, which represents an accelerated phaseout from current law. Many have worried about what this will do to the pricing of refrigerants for the residential market.
What are some other worries? According to Fred Kobie, president of a contracting firm in Fort Myers Florida, "the failure to reach efficiency is already rampant and it will only get worse. The changes should be less frequent," he said. Martin Hoover, president of a Decatur Georgia contracting firm said that the EPA's changing allocations on R-22 and the loophole that allowed dry shipping of R-22 units make you sound like a crazy person trying to explain the situation.
Non-DOE or EPA burdens on the mind of contractors include the effects of the affordable care act. One contractor mentioned concerns about rates spiking in 2015 while another cited concerns about overhead costs like healthcare taxes and tax incentives being taken away. For yet another contractor, OSHA training requirements were difficult for his small business to deal with. For a North Carolina contractor, it was his state's Department of environment and natural resources that cause problems relative to restrictive regulations on closed loop ground bores. And finally, Brian Kobie stated "the penalty for unlicensed activity lacks any real teeth, and the lack of enforcement for unpermitted work is a disgrace."
There is one other way to look at all this, as exhibited by Steve Saunders, CEO of Tempo Mechanical in Dallas. "We waste no time at Tempo by being frustrated with or trying to determine which regulations are good and which are bad. We don’t frustrate ourselves with the government because they don’t make some things easy or because they are making other things too expensive.This is simply wasted effort and wasted brainpower," he said. "Our time is spent trying to figure out how best to be above the baseline for performance and ahead of the curve of regulatory change. If we are in front of what the government is doing, then their changes do not impact our business, nor our customers’ problems."
So there you have it. However you feel, this all demonstrates the need to stay informed!
Articles courtesy of Kimberly Schwartz, the News, February 10
In recent articles published in the ACH & R news, Kimberly Schwartz details regulations contractors need to keep their eye on as we move through 2014.
A recent blog we wrote talked about making your voice heard on legislative items of importance. If you told yourself "I don't have time for that" or "That won't have any effect on my business," this article will tell you why you need to pay attention.
According to AHRI, the Department of Energy has issued 86 rules for the HVAC industry in the past 13 years. Looking at the current landscape, regional efficiency standards is still an unresolved issue and it looks like DOE will be moving forward with a new furnace rulemaking process this year. According to Bryan Rocky, director of residential product management for Johnson Controls, "Changes in both Energy Star and the Consortium for Energy Efficiency tier levels have not yet been finalized as part of the delay in regional efficiency standards. In addition, energy efficiency test procedures and calculation methods will impact residential furnaces and air conditioners. The DOE has been under the gun in meeting mandated statutory requirements for new or revised efficiency standards relative to energy metrics. As a result, they are trying to fast-track a lot of activity to meet the laws as mandated in Congress, and in the process much of the economic analysis and impact on customers and the HVAC industry is being rushed" he said
Karen Myers, corporate director of government relations for Rheem Manufacturing said her company is currently monitoring 14 rulemakings that affect HVAC, water heating, commercial refrigeration, pool/spa heating and boilers. Industry manufacturers are particularly concerned this year with DOE's furnace fan efficiency rulemaking. Myers explained, "Recently, the DOE issued test procedure requirements for testing the efficiency of furnace fans, which is just one component of an overall unit." DOE is also in the process of establishing efficiency standards for furnaces as a whole. Establishing efficiency standards for product components as well as requiring a product meet over all efficiency standard increases test requirements, hinders speed to market and has a huge impact on costs. The furnace fan efficiency rulemaking also impacts air handlers, modular blowers and other equipment. In addition to all of the above, DOE is planning to issue appliance standard rules for walk-in coolers, freezers and commercial refrigeration.
Does this have your attention yet?
Reference Residential Regulations to Watch, ACH & R news, February 10, 2014 by Kimberly Schwartz
Have New Year's resolutions become a thing you love to hate? How often have you made them only to find yourself well behind plan by mid February? It is not uncommon, it has happened to us all. There are however a few HVAC resolutions that Kyle Gargaro suggests you take into account for 2014, as outlined in his January 20 article in the News.
First, take a serious look at home performance contracting. This blog has featured a number of articles regarding this topic in recent months, and Kyle cites talk with a lot of contractors who are making good money in this area. ACCA is doing a great job providing training in this area according to Kyle, and the trend is one that has proven legs.
Another resolution to look at is the improvement of your SEO. (Search engine optimization) Does the name of your company come up in a Google search? Customers are not turning to the Yellow Pages to find HVAC contractors, they are turning to Google.
Third, make sure your voice is heard on legislative items of importance. There are any number of ways to do this on the national level, participation in groups such as ACCA, MCAA, and HARDI are just a few. Given this however, don't forget about the local level. You will likely have much greater influence on your business by getting involved here than at the national level. Local politicians often know nothing about what you do for living, educate them and make them realize how the legislative item they support will affect you and your employees.
A fourth is to keep up with important news in your industry. There are numerous ways to do this, how you do it is not as important is the fact that you do it.
Finally, beef up your social media presence. You do not need to be on every medium, but the ones you believe work for your company should be highly populated.
At first glance, this list might look intimidating. If you are doing none of these things then make a pledge to start doing one or two of them. You'll not only be more educated, your company will become more professional. It is never too late to start – however you do it!
There are some that say it's too difficult to compete with the "big guys." After all, they have the wherewithal to fund a big marketing budget or take advantage of volume discounts in their purchasing. So what's a small company to do? How do you not only compete but thrive in the market if you happen to be located in the same locale as a large firm? The News Matt Bishop tackled that subject recently with some contractors whose size ranged from 7-25 employees. Here is what they said.
Amy Turnbull of Blue Flame Heating and Air-Conditioning, Mount Terrace, Washington says "We are a company of integrity and stand behind everything we do. Sometimes I think it's harder for the larger companies to do that. We do a great job with having repeat customers and really having them connect with Blue Flame" she said. With word-of-mouth and referrals being such a big component of helping small business thrive, does it each job inherently bring more pressure? According to Turnbull, it does. "There's definitely more pressure," she said. "There's a huge pressure that we have to do the job right. If it's something we messed up on or missed, we'll make it right."
Brian Schraut of R.F. Schraut Heating and Cooling in St. Louis agrees. "We're going to go out of our way to make sure our customers are happy and satisfied, "he said. He believes there is absolutely more pressure with each job because of how reliant the company is on referrals. "In the residential marketplace, we do everything extremely well, if not better compared to a larger company," Schraut said. "The large companies are usually trained to get in and get out. We might take an extra two hours to get something done, but it's going to look and perform a lot better. With the Internet and social media, you have to be very proactive in addressing any negative reviews," he continued. "It's not only that though, a company's website and social media channels need to give off the right impression – a professional one."
It's funny how it always seems to go back to the one key thing – taking care of the customer better than the next guy.
Article published by Matt Bishop in The News, November 11, 2013
Thanks to a briefing from ACH & R news, we are passing on the latest regarding legislation which will likely have an impact on your business.
Affordable Care Act
In December, the US Court of Appeals for the DC circuit adopted a briefing schedule for parties involved in the regional standards lawsuit. Major players in the suit include The Department of Energy, the American Public Gas Association (APGA), Ai which r Conditioning Contractors of America (ACCA); and the Heating, Air Conditioning, Refrigeration Distributors International (HARDI). By April 15 those involved in the lawsuit must provide a brief to the court on three issues; the settlement agreement between APGA and DOE; HARDI's motion to continue the case and the merits of the lawsuit itself. The real fear is that the lawsuit may not be settled by the end of 2014. The reason this matters is that manufacturers and distributors are supposed to implement regional standards for air conditioners and heat pumps on January 1, 2015. At least two groups have indicated however they would file a motion to stay the implementation date of the air conditioner standards, and that filing may come in early 2014. Stay tuned.
HCFC – 22 Phase out
In 2012 the EPA allowed 55 million pounds of R-22 to be produced or imported. In 2013, production increased to 62.8 million pounds and then was dropped back to 51 million pounds for 2014. Due to the surplus of R-22 in 2013 and the subsequent price drop, the industry has seen demand for alternative refrigerants decrease. At the end of 2013 the US Environmental Protection Agency proposed the final step in the phase out of virgin HCFC -22. The proposed drawdown going forward allows for 30 million pounds in 2015, 24 million pounds in 2016, 18 million pounds in 2017, 12 million pounds in 2018, 6 million pounds in 2019 and zero in 2020.
Late last year Senate Finance Committee Chairman Max Baucus released a series of discussion drafts detailing proposals to overhaul the nation's tax code. While it isn't a final plan by any stretch, discussion drafts are intended to create conversation on tax reform between Republicans and Democrats. "This is the first serious conversation on tax reform we've had in a while," said Charlie McCrudden of ACCA. "Whether it goes anywhere or not as yet to be decided, but everybody is watching this one much more closely than I've seen in a long time." Whether or not Republicans and Democrats actually have a serious discussion of this remains to be seen, but they may be stirred to action in fear of backlash from voters this fall if they don't. Another one to stay tuned on.
There was a great article in the November 11 issue of The News by Adams Hudson that talked about thermometer marketing. That of course refers to having your leads be a function of the weather. How many times have we asked someone "How's business", and get the reply "it picked up a couple of weeks ago when the weather was hot, but now that it's cooled off things have slowed down," or something similar. Meanwhile, you have rent, utilities, employees and more that have to be paid regardless of whether business comes through the door or not.
According to Hudson, 60-65% of your leads should be coming from your customers. What is the percentage for your firm? "Many contractors make no retention effort, and just hope their customers remain with them. Sadly, these contractors still think these are his customers. HVAC contractors are in the costly habit of servicing the customer's wants and then thinking they'll stay as customers. Will they do stay – right in the customer files, rarely to hear from the contractor again. If they do, it's generally because the contractor wants to sell them something," according to Hudson.
Numerous studies show that it costs considerably more to attract a new customer than to retain an existing one. In addition, existing loyal customers spend materially more than first-timers, and referrals among loyal customers produce more buyers than shoppers. "Only a small amount of contractors report having a year-round customer retention program. In other words, you can clobber the majority if you put such a program in place, " Hudson said.
Keeping customers starts with regular communication, and a customer newsletter is a means to achieve that end. "They're simple to use, quick and they typically have some shelf life. Best of all, if it is well-written and not purely advertising, you'll instantly forge a better image and strengthen the relationship. Better relationship equals better retention," Hudson continued.
You don't have to re-create the wheel in order to start up a good customer newsletter. Two sources to investigate would be Hudson Inc., a creative marketing firm which can be reached at 1-800-489-9099. Another source is The Newsletter Company, a firm which has been publishing newsletters for 30+ years in the HVAC industry. They can be found at thenewslettercompany.com.
No two homeowners are alike. One plans to stay in their home for a long time while another plans to move in a few years. Energy efficiency is important to one and not at all to another. One has a plan for upgrades to the house and the resources to implement while another does not. According to Hal Smith, co-owner of Halco Energy in Phelps, New York, "This situation illustrates the beauty of home performance contracting. It gives you the ability to solve homeowners comfort and efficiency issues and really focus on doing what is best for them within their budget."
According to Robin LeBaron and Kara Saul-Rinaldi, authors of national home performance council’s white paper, the budget is often the sticking point for homeowners, which is why some contractors are more successful when they offer a staged approach to HPC. The authors several significant advantages to a staged approach, such as:
- it reflects the way homeowners typically undertake home improvements
- it can keep costs low, because energy efficiency measures can be bundled with other work that would be done anyway
- it reduces the need for financing, as improvements are paid overtime
Jerry Unruh, owner of ABC Cooling and Heating in Fresno, California adds that developing an energy audit on the home helps the homeowner prioritize on the upgrades that are necessary, as well as which one gives the best bang for the buck. "We stress that it's not necessary for homeowners to do everything at once." He also noted this approach differentiates them from the competition because no one else in the area is doing what they do.
According to Cook Heating and Air of Crawfordsville, Indiana, safety is always the first priority, because a lot of their customers have gas heat. Duct sealing is usually second on the list, as that has the largest return on investment. From there, they recommend upgrades in the attic, followed by the crawlspace or basement. "Once those are done, we can replace their equipment, then address ventilation and/or humidity control in the home" according to Garrett Cook, Gen. Sales manager.
Home performance contracting is about much more than simply replacing the mechanical equipment. It's a comprehensive approach that looks at energy savings and comfort in a way that provides the consumer a good return on their investment.
For more information about this subject, please see Joanna Turpin's article in the December 16, 2013 ACH & R news.