Contractor Spotlight: Diving Deep into Performance-Based Contracting

When you search for Control Point Mechanical, Inc. using the Google Earth app, you dive into a twisting, spinning plunge from space that spirals down toward New England, homing in on Massachusetts, then swooping into the town of Shrewsbury. Shrewsbury is a suburb of Worcester, located about 45 minutes from Boston.

Named for Shrewsbury, England, this American suburban community has, as of the 2010 Census, a population of 35,608 people living in more than 12,000 households. It is a town with a lot of history, dating back to 1722. It is where Nick Lupo founded Control Point Mechanical, Inc. (CPM) in 2007.

When he started Control Point that April, it was after serving in the U.S. Navy, going to college, and working for a few other HVAC companies. While in the Navy, Lupo received highly specialized training in nuclear energy and worked on nuclear reactors in submarines. Afterwards, in college, he studied air conditioning, refrigeration, and thermodynamics.

‘I used to tell people that if I can fix a nuclear reactor, I can probably take care of your air conditioning system,’ he says.

In those early days, CPM focused on the commercial and industrial markets. According to Lupo, his new company operated out of his garage and one van. Ten years later CPM is a $2.8 million-dollar venture that employs 11 people. It serves clients out of seven installation and service vehicles. The company has expanded and now serves both the residential and commercial markets.

Lupo will tell you that he always had an affinity for commercial work, probably because of all the nuclear training. But he adds that they also always dabbled in residential. He made that part of the core company in 2014 when he hired his current operations manager, John Fullen. Fullen’s experience and expertise was in residential service and replacement.

‘John has taken the lead in creating Control Point Mechanical’s internal procedures and training. This is key to our implementation of performance-based contracting in our company,’ Lupo says.

The NCI Connection

Prior to starting CPM, Lupo was introduced to National Comfort Institute, Inc. (NCI) while working for another HVAC company. In fact, he became a member of NCI in 2000.

‘While I was working for this other company, I attended one of NCI’s air balancing seminars and a light bulb went off in my head. It made so much sense. In fact, it was where I first understood that the type of work I was already doing was performance-based.’

He adds that from the very start of his HVAC career, he measured and tested every system on every job. ‘It’s just always been how I operated. When I started Control Point, it became part of our culture. Then I found an organization (NCI) that formalized what I was already doing and is helping me take it to the next level.’

In that light, today, five of CPM’s 11 employees hold NCI certifications in Combustion Performance and CO Safety, Airflow Testing and Diagnostics, System Redesign and Renovation, Residential Air Balancing, and Residential HVAC System Performance.

Performance-Based Contracting the CPM Way

‘We have some excellent competitors just up the road and they do some performance-based testing. Because of our training and our background, I think CPM’s approach is completely different than 90% of the HVAC industry,’ Lupo explains. ‘From the minute we take a call in the office, to the consumer interface from our technicians or comfort advisors, we are talking about how we look at the total system, not just the box.’

Lupo says that though CPM’s prices are higher than his competitors’, they aren’t crazy high; and consumers are buying.

‘We do air upgrades and complete system renovations on just about every piece of equipment we sell. At the minimum, we do an air upgrade.

‘If the consumer isn’t interested in making their system run better, if they only want us to slap in a piece of equipment, then we are not the company for them. We are in a position where we don’t need to chase after every furnace sale,’ Lupo adds.

He also says that as they master their air upgrades and systems renovation skills, they get smarter, and more efficient. They become better able to present their product offerings and will be even more successful.

The presentation skills are equally important to the technical skills. According to CPM Office Manager Erin Morrisey, it is all about educating the customer. ‘We help them to understand what an air upgrade means and how it can benefit them, their system, and their comfort,’ she says.

Differentiation with ComfortMaxx™

‘The ComfortMaxx reports are a game changer,’ says Lupo. He explains how they use ComfortMaxx as a tool in a more consultative sales approach.

‘Typically, our technicians don’t use it. We have them fill out the data and send it in. Our inside team fills in the data, then produces the report which goes to the customer, along with a cover letter. We also use the reports as part of our sales process: ‘Here are your test results, here is where we can help you.’?

According to Lupo and Morrisey, CPM customers are often very surprised by the reports.’ “They create a visual that explains exactly how their mechanical systems operate and, more importantly, how they’re NOT operating,’ Morrisey says.

Lupo adds that the ComfortMaxx reports alone set them far above any companies that they compete with.

‘And we still don’t use the software anywhere near what it is capable of doing,’ he continues. ‘We are still learning and experimenting. But it has already paid for itself in sales we might not have closed without it.’

Supporting Performance-Based Contracting?

Another aspect of their NCI membership is the support they get setting up the systems necessary to support a performance-based contracting culture. Lupo says they get a lot of help from NCI trainers to develop the necessary back office processes.

‘We are at the point now where we have a maintenance agreement system in place. Control Point has a good process beginning with how we answer maintenance calls, using the residential flat rate pricing, and refining our sales process. The company is also working on getting better at documentation as well.

‘So, we are not yet ready to fully scale up. We don’t have the people or the processes totally in place, but we are almost there,’ he says. ‘Without NCI training and certification, there is no way we’d be where we are today. NCI helps to keep us focused.

‘I haven’t liked to use the word ‘pride’ because I try to stay away from being prideful. But I do have a lot of pride in being associated with NCI,’ Lupo adds. ‘I know we are doing the best for our customers, for our employees, and for the industry at large. By aligning ourselves with organizations that help us grow, we can better provide for customers, employees, and our families. I feel like I am in lockstep with the best of the best.’

Making the Right Choice

He says all HVAC contractors have choices with how they want to go to market and who they are aligned with. Those choices also include opening their minds to new technologies, new business approaches, new opportunities.

‘Once you find those, you just have to jump in with both feet and do it. Once you do that, you’ll figure out how to swim better so your business can really leave others in its wake. Just don’t get caught up in analysis paralysis. Start implementing that one next thing, and focus on it. Once done, move on to the next thing. Do that until you are fully up-to-speed.’

For Nick Lupo and his team at Control Point Mechanical, Inc., it takes a team working toward a complete performance-based approach. This is how they rise above the box changers. Congratulations on being the High-Performance HVAC Today October 2017 Contractor Spotlight.