Most of us don’t think about HVAC until it gets hot, or our heating or cooling system fails
It’s at about this time of year when the heating, ventilation and air-conditioning (HVAC) industry comes into its own. But it’s what happens over the rest of the year that keeps them in business. The HVAC industry faces two imperatives: keeping that regular maintenance work coming in, and growing the business. A significant part of the latter comes from being able to persuade customers to “do the right thing”. As a rule, those in the HVAC industry prefer to work with companies that take a proactive approach to maintenance and have their equipment inspected and serviced, cleaned and dealt with on a regular basis.
PUTTING AN END TO 2AM PHONE CALLS
They try to create a relationship based on their customers doing the right thing which allows them to do the right thing in return. That’s a far cry from the alternative which is becoming a reactive company where a customer can pick up the phone up at 2am and say ‘come and fix this for us’.
HVAC services companies that consider themselves leaders have worked hard to educate customers about taking this proactive approach. However, they’re caught between reactive customers and a confused regulatory environment.
Customers that focus on the short term are more reluctant to spend on new plant; they’ll stick with what they’ve got till one day the system’s use-by date comes up and it has to be replaced. Companies with more vision (and generally more money) are more receptive to the notion that they’ll save in the longer term by having modern, clean, efficient cooling systems in their building.
As it’s a piece of equipment that runs 24/7 if it’s not maintained it will have a shorter life; even correctly maintained it has a finite life or you get to the point where energy efficiencies on new systems make it economically viable to make the change
CUSTOMER SATISFACTION DRIVES GROWTH
While awareness around global warming has placed some onus on businesses to look at energy efficiency, the regulations tend to vary widely between countries. Some impose taxes, others use carbon trading, and some industry organisations have embarked on information programs to improve understanding.
However, the highly political nature of the warming debate tends to mean that the HVAC industry’s customers will ultimately determine their response by cost. They also expect HVAC service to be quick and cost-effective.
Good field service returns major dividends. A survey of more than 150 service and manufacturing organisations found that organisations that reached a 90%+ customer satisfaction rate achieved an annual 6.1% growth in service revenue, 3.7% growth in overall revenue and an 89% level of customer retention.
DON’T WAIT ‘TIL IT’S TOO LATE
HVAC service companies therefore have to keep a close eye on their key performance indicators (KPIs). Bob Wilkins, vice president of International Service Leadership (ISL), told a contractors’ seminar that they need to measure their performance figures on a daily basis.
“The bottom line is that business owners need to identify what information they need to get every day,” Wilkins said. “You can’t wait until the end of the month to make a decision because it will be too late to make adjustments.”
Having a business system that can deliver that sort of intelligence on demand is therefore essential.
“We’re trying to turn our cost base and resources into cash as quickly as we can, so having a business operating system that can assist with smoothing that whole pathway forward is obviously something that service companies would have a high degree of interest in,” says Bill.
PUTTING PERFUME ON A PIG
However, the HVAC industry has either been slow to pick up on modern business systems, or has gone completely the wrong way about it.
“I know companies that have gone in for new, smart systems, and they’re either struggling or have failed,” Bill says. “They’ve done it to look good, and that’s the wrong reason. You want it to improve how competitive your business can be for your customer.
Doing it right is much more important than just doing it. They got swept away with being able to boast to customers that they had all this flash technology, but didn’t actually make them work better. For instance, some of them equipped mobile staff with iPads, but then their data was being manually entered into the ERP system by someone else. They were just putting perfume on a pig.”
A CRITICAL ROLE IN PUBLIC HEALTH
The other key performance area for the HVAC industry is the crucial role it plays in public health. Since it was first identified in the late 1970s, Legionnaires’ disease has killed more than 175 people worldwide and put over 2500 in hospital.
Obviously, the disease is taken very seriously by health authorities, and businesses rely on specialist water treatment companies to keep their water-cooled air conditioning systems free of bacteria such as legionella. Failure to do so can result in heavy fines for the offending business.
“You’re dealing with an organism that is so prevalent in nature, it’s not whether you get an adverse result once a year; it’s more like whether you get one or two or 10 a week,” explains Michelle Lawler, Administration and Finance at treatment company Tandex Pty Ltd. “It would be very rare to go a month and not have any high results.”
GREENTREE ENABLES ACCURATE TESTING
Tandex relies heavily on Greentree to ensure accurate testing and prompt response. It services hundreds of companies and its system generates automated alerts to tell it when a client’s system requires inspection.
Tandex also works continually on reducing unnecessary expenses and wastage when providing the service to the customer, thereby being able to keep service costs down. Its business system works 24/7, monitoring service requirements and also providing daily performance reports.
“We can see and fix problems immediately, change our systems if needed and achieve much faster improvements in quality, production and services,” Michelle says.
Another air conditioning service firm, Airfirst, has used Greentree to make maintenance cycles easier for its customers. It’s able to schedule maintenance at times of the year when air-con usage is lowest and servicing is therefore less disruptive. It’s also meant less unproductive downtime for Airfirst’s staff and thus a smoother revenue stream.
THINGS DON’T GET MISSED
“From an administrative point of view it’s certainly much easier to manage than it ever was,” says Finance & Administration Director Beth Borzi. “Things don’t get missed because we’ve got them all set up as recurring events. Our maintenance schedule is constantly growing, so it’s absolutely important to have a decent system to cope with the amount of information and to ensure that we’re not losing out on revenue.”
Integration and single-source data entry also ensure that all job costs are captured and allocated to jobs. Project Managers have greater visibility of costs, which translates into more accurate job costing.
KEEPING PACE WITH ECONOMIC GROWTH
The HVAC industry experienced its share of hard times due to the economic downturn, which curbed new construction work for a time, but it’s now forecast to generally keep pace with economic growth. The companies that lead the way will be those with modern business management practices and systems. “As life gets busier and customers get more demanding, it gets harder to keep doing things the old way,” Bill says. “That’s where having a system that is smarter, more automated and ensures that things happen correctly is going to be valuable for businesses, I’m sure.
*This blog feature was originally produced by Greentree. We recommend that you visit their site and sign up to their blog here for regular updates.
