“It’s been an odd year.”
That's what I have been hearing consistently from HVAC contractors.
“It’s been hot, but the calls aren’t coming in like they were last year.”
The expectations were high after coming off of the COVID-era growth rates, but the reality is many contractors are finding themselves confronting an unanticipated slumber to summer. AHRI released that there has been a minus 14.6% change year-over-year, as of May, in the shipment of air conditioners and heat pumps. The slowdown can be attributed to many things, including inflating prices, interest rate hikes, a hesitant consumer market, and even weather in some areas. But the best contractors aren’t participating in any of the above excuses and are going on offense. Here are five strategies being used to wake up growth in the face of a slowdown.
- Embrace the maintenance membership model — One unmistakable trend that has emerged is the shift in homeowner preference toward maintenance/repair over replacement. The last few years, contractors saw homeowners who were spending more time at home elect to replace versus repair. This fueled growth, along with the rising prices of materials. Consumers had pent-up savings and elected to use it to stay comfortable. But that's not necessarily the case now. Consumer credit is climbing, savings have diminished, interest rates are higher, and consumers are electing to repair versus replace. Given that many business models were built around burning through leads to get replacements, this is a call to get back to serving. Embracing this data and revving up your maintenance membership model is key. Serve them really well, keep them connected to you via your membership, and get back to nurturing the relationship until the replacement is inevitable. Then you will be their only call. Making it easy to be a customer by offering a monthly membership is a best practice many are using. I’ve even seen some contractors using a predictive maintenance model that involves monitoring their system and only servicing when needed.
- Win the neighborhood — In challenging times, many contractors start to cut expenses. Labor and marketing are two common cuts that are a big mistake. This is the time to go on offense and gain the market share other contractors are giving up. Even if you are on a tight budget, the best contractors I know use guerilla marketing. These simple yet highly effective tactics can help you win a neighborhood. It starts with identifying a target area where you are already getting the type of calls you want. Then, have technicians drive your branded company vehicle through this area on their way to work, when they don’t have calls, and on their way home. When doing a job in the area, always put out a yard sign, sticker the equipment, and ask the homeowner to leave a review and post to the local social media neighborhood group about their service. By doing this, it will appear that you are everywhere and it makes sense for the neighbors to call you. If you can put some extra budget behind this, also geotarget a digital ad and social media campaign, followed by a series of direct mail and email. Win the neighborhood and use profits to target the next one that also has your target customer. Go small to get big.
- Mine the gold — Chances are you gave a lot of estimates that did not close this year. If you don’t have someone dedicated to following up, you could be leaving $1 million or more on the table. That’s what I realized after implementing a crucial new position: follow-up coordinator. Once trained, this person sold over $1 million in the first year just by working the follow-up tab on ServiceTitan. It blew my mind that we left that much out there, yet I was also super excited that we now had a system in place to recover it.
- Make it easy to buy — The economic landscape has shifted, and if we want to continue to grow, we have to make it easy for people to buy from us. At this point, you would think that everyone offers financing on repairs and replacements. But I visit with countless contractors that don’t or aren’t offering it on every call. The ones that are presenting multiple options, and also the option to finance anything, are still growing. They made it easy for people to buy. Build the cost to finance into your pricing, integrate financing into your service software, and watch what happens when you empower technicians with the ability to finance anything. Average tickets and closing percentages will rise.
- Double down on training — I mentioned earlier that some contractors cut labor in slow times. There are times when a company must rightsize the labor force, but in most cases, the one with the skilled labor force wins. When properly trained, a CSR or technician can not only generate work but can also leave such a great impression on customers that they go on to become evangelists for your company. This produces countless referrals and future work. The best companies realize this and make training a scheduled and prioritized item. One of the most overlooked areas of training that I see is that of the CSR. I get the opportunity to look at many dashboards, and the first thing I look at is the call booking rate. When the owners learn that the average call booking rate is only 42%, it encourages them to look at theirs. Oftentimes they realize that they don’t need more leads — they need to actually capture the leads they are already generating.
Bottom line, it’s time to go on offense and control your own destiny. Learn from what the best are doing and take massive action to achieve your success! It’s go time!
