< Previous10 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAYHIGH-PERFORMANCE NEWSwith offices in Mount Laurel, NJ and suburban Washington, DC.BUILDING A HIGHER STANDARD DEALER/DISTRIBUTOR AWARDSAmerican Standard announced the winners of its 2018 “Building a Higher Standard” awards, for dealer commit-ment to customers, employees, and their communities.The manufacturer launched this awards program in 2018 to recognize independent HVAC dealers across the country for exemplifying American Standard’s core values, including in-tegrity, community involvement, team-work, and a focus on continuous im-provement in the pursuit of excellence.Winners include: z Florida Keys Air Conditioning and Gemaire Distributors, Marathon, FL z Andrews Heating & Air Condition-ing, Clinton, IN z Shafer Services Plus, San Antonio, TX z Cary Heating & Air Conditioning, La Crosse, WI.“This award is our new, highest honor for the highly skilled contractors who represent our brand,” said John Hofmann, Vice President for American Standard. “We are proud to recognize these inaugural winners.”Winners were selected from a com-petitive pool of nominations and are featured in a video series playing across national and regional media through January 2019. kilowatt hours annually. This is equiva-lent to eliminating greenhouse gas emis-sions from 2,000 cars.The project focused on moderniz-ing TowerJazz’s chiller plant and replac-ing aging and outdated equipment. The plant has more than 800 employees and fabricates 200-millimeter wafers (silicon material used in electronics for the man-ufacture of integrated circuits).Completed in November 2017, the upgrades reduced HVAC energy use by nearly 50% while improving the man-ufacturing and working environment. The plant, previously the organization’s second-to-worst energy user, is now the second most efficient energy user.For more information, please click on this link: ncilink.com/SoCalRebate.ASHRAE REALIGNS RELATIONSHIP WITH IAQAASHRAE recently announced they reached an agreement with the Indoor Air Quality Association (IAQA) for IAQA to transition them to an association management firm.IAQA became an affiliate of ASHRAE in 2015. In that relationship, IAQA’s oper-ational base became integrated within ASHRAE’s operations in Atlanta, GA. With this new change, IAQA will take on a more independent management position. Both organizations are committed to continue collaborative programming that benefits all members involved.During its affiliation, IAQA operated independently within ASHRAE’s organi-zational structure, maintaining its own brand and Board of Directors. IAQA will now be managed by AH, an association management company on its innovative design, creativity, application, value, and market impact. All winners will be formally recognized during the 2019 AHR Expo, Jan. 14-16 at the Georgia World Congress in Atlan-ta. The ceremony is open to all Show at-tendees and is slated for January 15 at 1:00 PM EST. The AHR Expo will also announce this year’s winner of their Product of the Year Award at the ceremony. To see a complete list of winners, go to ncilink.com/19AHRWin.Meanwhile, if you plan on attend-ing the expo, be sure to stop by booth BC4929 and say hello to the National Comfort Institute team.SOCAL EDISON PRESENTS $1.8 MILLION REBATE TO CALIFORNIA MANUFACTURERThe Southern California Edison utility recently presented a $1.85 million check – one of its largest incentive rebates to date – to leaders at circuit manufacturer TowerJazz for upgrades to their plant in Newport Beach, CA. TowerJazz manufac-tures next-generation integrated circuits (ICs) in growing markets such as con-sumer, industrial, automotive, medical, and aerospace.TowerJazz collaborated with Trane® (ncilink.com/TraneComm) to complete energy-saving upgrades which reduced peak energy demand by more than 1.3 megawatts, saving about 12.5 million NOVEMBER 2018 11HVACTODAY.COMdevice can be installed on any style water heater to shut off incoming water supply and prevent more water flow to a damaged water heater. Alerts are now also sent via text or email.The unit’s plumb-and-plug design – with full-port valve and easily-removed actuator – is perfect for new or retrofit installation.For more information, please visit TacoComfort.com.HAIER DUCTLESS WIFI ADAPTERHaier ductless mini-splits now can be controlled via your mobile device. It’s simple to install -- just plug the USB WiFi module into the indoor unit, download the app to your mobile device, and sync up the equipment to your smart device.This allows consumers to control their comfort systems from wherever they are whenever they want. The adapter’s dimensions are 3.15-in. wide X 2.36-in. deep and is compatible with the following Haeir ductless series: yArctic yAdvanced yTempo yFlexFit.For more information, please visit ncilink.com/haier.TACO WATER HEATER SHUT-OFF WITH ELINK™The LeakBreaker, which guards against flood damage from a leaking water heat-er, is now available with Taco Comfort Solutions’ eLink wireless technology. It consists of a control unit, a valve with an actuator, a sensor, and WiFi capa-bility. This allows status alerts to be sent directly to a user’s mobile device when-ever a change occurs. This resettable, testable, protection HIGH-PERFORMANCE PRODUCTS12 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAYnew construction market. As that mar-ket grew, so did Smiths’ company.One day, three years after starting the company, John Smith stopped into a local gas station and met a young ser-vice attendant named Jim Altman. Al-tman was looking to improve his work conditions and Smith needed a helper for the air conditioning business. The rest, as they say, is history.LEARNING THE TRADESays Altman, “In 1969, John put me to work sweeping floors. I knew noth-ing about air conditioning and won-dered what was going on. Within a few months I was doing rough-ins on new construction jobs. For whatev-er reason the work came easily to me and John Smith was hap-py with my performance. In fact he soon entrusted me to run the rough-in jobs. I was making $1.80 an hour and thought I was doing really great.“I enjoyed the work very much. My promotions progressed from Installer, to Install Lead Man, to Install Man-ager, to Service Technician to Service Manager,” he says.A CHANGING MARKETPLACEDuring those early days in Altman’s career, the marketplace began chang-ing mightily as new construction began to wane and service and replacement became king. The Smiths recognized the change and slowly began increas-ing the amount of service and re-placement work they did. During this phase, Jim Altman moved more to the service side of the business.“I had to learn many new and differ-ent things to be successful on the service/replacement side,” he explains.For 10 years his job was to go into older homes and Ask anyone if they know where Kingsville, Texas is located, and I’ll guarantee you’ll get a different answer from all of them. Unless you ask a Texan, of course. They know the city of Kingsville is along the Gulf Coast not far from Corpus Christi – a city built in the early 20th Century to help bring the railroad close to the King Ranch (which remains the largest ranch in Texas with more than 825,000 acres).Of course, people in the know will tell you the late, great Jim Morrison, lead balladeer for the incredible rock band, The Doors, hails from Kings-ville. As does actress Eva Longoria.It is also the city where, in 1966, Four Seasons Air Conditioning and Heat-ing Co. (FSAC) was founded by hus-band and wife team John and Johan-na Smith. The fledgling residential and light commercial air conditioning firm focused on the fast-paced and growing 12 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAYFour Seasons Air Conditioning: Taking Their Market by StormCONTRACTOR SPOTLIGHTBy Mike WeilFour Seasons Air Conditioning is the home of Performance-Based Contracting in Kingsville, TX.Jim AltmanNOVEMBER 2018 13HVACTODAY.COMis FSAC’s 50th anniversary being a Lennox contracting firm.Over his 30 years of ownership, the company has begun adapting the high-performance HVAC approach to doing business. The company motto, “Measure Everything, Assume Nothing,” tells that story. Through training and continuing education, Al-tman’s team learns to interpret those measurements and diagnose prob-lems in ways that leave their competi-tors scratching their heads.TRAINING IS THE KEY TO SUCCESS“Our mission statement is, ‘The Endless Pursuit of Excellence,’” Altman explains. Training is the oper-ative word here. It is through on-going training that we stand out and fulfill our customers’ expectations.”He points out that when manufac-turers and suppliers offer classroom training sessions, FSAC technicians attend. This costs the company valu-able resources, but Altman explains that “staying up-to-date with fast-paced industry advances allows us to sleep at night.”Altman adds, “Our secret is knowing we do all we can to help our customers with new innovations as well as stay-ing abreast of the latest tools and test-ing strategies to keep them comfort-able, safe, and energy efficient.”In 2008, FSAC upped the ante and brought in National Comfort Insti-tute, Inc. to train the team in Perfor-mance-Based Contracting™. He says this was their first step onto the per-formance path.“This revolutionized our modus operandi – that is, we now measure air conditioning performance just like a doctor measures blood pressure. We have actual numbers that prove if a system is performing or not. “Ten years later we have “Certified Professionals” in the field, which re-quires ongoing training for bi-annual renewal,” he says proudly.“We call ourselves “air-heads” be-cause we recognize the importance the “air-side” of the system plays in com-fort system success. Our training and certification vastly improve our ability to analyze and fine-tune duct systems as well as furnaces and air condition-ing units.“Our motto forces us to also deliv-er on a new system, not just install and walk away. We must diagnose the complete system, not just that broken part. This is key to our success.”SYSTEM RENOVATIONS AND UPGRADESAltman tells a story about his ear-ly days installing air conditioning. He says John Smith used to take him into a newly constructed house and con-duct a room-by-room walk through. Smith would say, ‘Give me a 10 – 6 grill here, an 8 – 4 there,’ and so on. Altman would ask, ‘How do you know what to put where?’ Smith’s answer was, ‘I just know from experience.’ “Because of our exposure to the convert them to central air and heat.He says, “I spent 10 years of my life in attics in South Texas. It was hot. There were days when I questioned my intelligence as I crawled around in attics that were 140 degrees. I was sweat soaked every day. But as it turns out, I liked the work. I liked taking a building or house that had no air con-ditioning in it and totally converting it to central air and heat. I thought that was pretty cool.”BECOMING AN OWNERFast forward to 1988, Altman is working as a lead technician. The Smiths are looking to retire and sell him the company. When he first bought the compa-ny, the staff consisted of Altman, a bookkeeper and several employees. The business was grossing around $300,000 annually.“I thought about changing the com-pany name because we really only have two seasons down here – hot and hotter,” Altman says. “Then I thought better of it because the com-pany was already well established and growing.”Today, FSAC grosses around $2.2 million with 24 employees. They field six service and three installation trucks out of a 10,000 sq. ft. facility. And Altman says they have thousands of loyal customers stretching over four counties in South Texas. FSAC is a Lennox dealer and has been since its beginning. In fact, 2018 NOVEMBER 2018 13HVACTODAY.COMFour Season’s Field Service and Installation team has the mindset that there isn’t a home out there that they cannot fix.14 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAYstandards followed by Four Seasons and continue our tra-dition of being excellent duct system installers/designers who match up mechanical air requirements appropriately.”But he adds that the techni-cal part is really just the ba-sics. “You need to know how to sell it,” Altman explains. “You need to know how to talk with customers and ask questions about hot and cold spots in their home, wheth-er anyone suffers from allergies, how many pets do they have, and so on. Just asking these questions has led to profits in excess of $100,000 for Four Seasons over the years. More importantly, it has led to ecstatic customers.”By this, he means that customers regularly tell him that other contrac-tors tell them there is nothing to be done about their comfort or energy concerns. Others, he says, tell him that they never thought their indoor air could be the source for many of their health and comfort problems.MONEY LEFT ON THE TABLEBy addressing customers’ issue, Alt-man says he usually can offer a menu of four or five options beyond just fix-ing the mechanical equipment. He says on average he can sell three or more right along with the equipment purchase. “No one else in our area is taking the time to address these customer con-cerns,” he says, “because so many are only focused on making quick equip-ment swap outs. For them, that is just leaving money on the table and po-tentially a bad taste in the customer’s mouth. For us, in many cases, this additional work is our most prof-itable.”One tool that FSAC comfort consultants use to help sell jobs is the NCI CoolMaxx™ forms. These forms are filled out by service technicians (and some-times the sales staff) with all the measure-ments and diagnoses, which sets the table for explaining to customers what is going on in their home and what options they have for resolving issues.“We’ve finally got our technicians to where they do a CoolMaxx report on every maintenance call. It took us a while to convince them on how im-portant it was. Then we had to get those reports into the hands of our comfort consultants who use them to convert leads to sales. “They do this by making compari-sons between medical blood pressure and HVAC static pressure, delivered versus rated performance of existing equipment, and so on,” he explains.“This information is the basis on which our customers make the de-cisions that transform their homes and even lives, in some cases,” Alt-man says. “Everything is backed up by load calculations with Manual D and J, as well as additional live mea-surements made with things like ‘hu-midity sticks,’ flow hoods, and more. These tools are all our stock and trade. When we bring out the big guns (blow-er door, duct blaster, CoolMaxx) it just solidifies our position (and sale) with our customers.”concepts of Performance-Based Con-tracting,” Altman continues, “I know that experience isn’t enough. It needs to be backed up by some design de-tails including load and duct-size calculations. These practices are Judy Lutz manages the Four Seasons ware-house and is in charge of parts procurement.Rose Morrow is the front line for running the maintenance department.Cindy DeLaPaz is at the dispatch command cen-ter. She also serves as assistant service manager.CONTRACTOR SPOTLIGHTMetalMan is Jim Alt-man’s silent partner at home shows.NOVEMBER 2018 15HVACTODAY.COMThe training NCI provides in Residen-tial System Performance, Residential Air Balancing, Commercial Air Bal-ancing, Combustion Analysis, along with our own in-the-field experience, has made us just about bullet-proof.“The secret now is to keep our eyes on the ball and continue down the Per-formance Path.”That sound strangely like the lyrics to Jim Morrison’s song, Roadhouse Blues: “Keep your eyes on the road, your hands upon the wheel.” We have no doubt that Jim Altman and the entire team at Four Seasons Air Conditioning and Heating will success-fully do that, which is why High-Per-formance HVAC Today selected them as the Contractor Spotlight for November 2018. cannot afford to back-slide on.”Though it took time and is some-thing they work on every day, Altman says he believes FSAC is firmly estab-lished as a Performance-Based HVAC contracting firm now. His company can show the value of properly operat-ing standard, medium, AND high-ef-ficiency equipment. They can assure great airflow and humidity control. And finally, in Altman’s own words, “We are now in a league of our own. There are a lot of clients out there who recognize the value we bring to the ta-ble and will spend the money it takes to keep their family comfortable, safe, healthy, and happy.“Over these last 10 years, my team and I have developed a mindset that there is not a home that we cannot fix. GETTING STAFF BUY-INJim Altman is the first to tell you that Performance-Based Contracting isn’t easy or inexpensive to implement into an HVAC business. It takes time and perseverance. Sometimes it takes bringing in outside experts to help show your team members the light. For FSAC, that outside expert was Paul Wieboldt of NCI. Altman brought Wie-boldt to town for several days of ses-sions on system performance testing. To make it more affordable, Altman says he opened the class and invited contractors from around a 120-mile ra-dius to come to share in the knowledge (and expense) of the class. He says, “It was great and we hav-en’t looked back. These NCI proce-dures are business-getters that we 16 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAY4. Process and Culture Change.Let’s take a look at each factor and examine how it relates to the bigger picture.YOUR TRAINING INVESTMENTYour investment in training goes well beyond the cost of sending people to a class or bringing in a trainer for onsite training.High quality training usually runs between $300-$400 per day per person. Believe it or not, this is not your biggest expense. One of the big-gest costs is loss of income during the training. I bring this up not to deter you from sending peo-ple to training, but to help you get a realistic pic-ture of your training investment.Why is understanding these real costs import-ant? Because as a good business person, you should always look at your return on any training investment, and how long it will take to pay for it-self. Sure, there are many intangible, sometimes tough-to-quantify benefits of training, but when comparing one class to another, you must be able to evaluate the tangible, quantifiable returns for that investment. Everything else is a bonus.One benefit of Performance-Based training is your ROI can be immediate and tangible. A con-tractor from Phoenix, Arizona recently emailed me saying he’s selling air diagnostics at $295. He’s setting up duct renovation jobs 2-3 months out, filling in his slower times with high margin work. He wrote, “Since I started using some simple static pressure and airflow tools, things are explod-ing for me. I have fixed many problems other con-tractors said couldn’t be solved - and I’ve gained customers for life as a result!” Now there are some tangible, quantifiable returns on his investment! Not only is he getting paid well for his time to do the diagnostic work and solve problems, he’s es-sentially getting paid $295 to perform a sales call!When’s the last time a customer called you and asked if he or she could pay you for an estimate? Any major change in a company’s busi-ness model usually requires an associ-ated investment in time, money, and other resources. Transforming your business into a High-Performance HVAC organi-zation requires all three, but done right, your ROI (Return on Investment) will be fast and plentiful.There are several variables that affect what it takes to build a Performance-Based Contract-ing™ (PBC) company. These include the size of your organization, your mix of service versus re-placement, residential versus commercial, add-on replacement versus new construction, and so forth. The examples in this article are based on the typical investment for a service/replacement company with 10-15 employees. You should be able to adjust the numbers based on your compa-ny size and business mix.The four key factors that impact your invest-ment in time, money, and human resources are:1. Training2. Tools and Instruments3. MarketingYour Investment in PerformanceBy Dominick Guarino, PublisherMANAGEMENT The ABCs of High-Performance HVAC Contracting: PART 5NOVEMBER 2018 17HVACTODAY.COMpsychrometer, an infrared thermome-ter, and a few other tools. Your invest-ment in these tools will run around $5,000. At some point there’s no way around making this investment. You may be able to borrow or rent some tools to get started, but you’ll quickly find it impossible to conduct a perfor-mance-based sales call without own-ing the right tools.In addition, you’ll want to equip your ser-vice techs and install-ers with a few key test instruments, including a static pressure test kit, and a good quality in-strument to check tem-peratures and wet bulb in ductwork. Remember, “If You Don’t Measure, You’re Just Guessing!”Each of your technicians should also carry a high-quality com-bustion analyzer and draft gauge. It makes sense for your field people to own these tools, as they will take bet-ter care of their instruments when they invest in them personally. As you begin spreading diagnostics through your company, your invest-ment in new tools and instruments will increase. But if done right, your payback should also increase tremendously.YOUR MARKETING INVESTMENTOne of the great things about sell-ing High-Performance HVAC is it re-quires a much smaller investment in marketing than other products and services. Most of your leads for diag-nostics, Air Upgrades, and renovation work will come from existing custom-ers and referrals. Your existing service customers and your maintenance agreement custom-ers are your best source of leads that should give you the highest closing rates. When properly trained to test and share findings with customers, your service technicians can generate more leads than any other marketing investment. Once customers experience the ben-efits of a highly performing system, they will gladly refer you to their fam-ily, friends, and neighbors. Be sure to ask for referrals as part of your post-sale follow-up process.If you decide to invest addition-al marketing dollars to gain new cus-tomers, consider investing in market-ing High-Performance tune-ups. Your messaging should explain the bene-fits your customers will get in terms of safety, health, comfort, and saving money on utility bills. Keep it simple and to the point, with slogans like, “Experience the High-Performance Service Difference with ABC Heating and Air.” Make no mistake, this contractor is providing real value with document-ed testing and suggested corrective actions. The difference is he’s getting paid for what he knows. A company with 10-15 employees in-cluding salespeople, typically invests be-tween $10,000 and $15,000 a year in Performance-Based training and edu-cation. Remember, training is a never- ending process. In addition to attend-ing formal classes that include certifi-cations, it’s important to set up internal reinforcement training on an ongoing basis – preferably weekly. It can be as basic as a half hour Friday morning class reviewing static pressure testing, or as involved as a half day in the field with three to four techs at a time. Don’t forget about online training. High-quality web-based reinforcement training can really pay off. The key is to develop a culture of rewarding ongoing improvement through education.INVESTING IN TOOLS AND INSTRUMENTSA set of quality diagnostic instru-ments for your salesperson and/or testing-and-balancing person in-cludes a flow hood, high-quality dig-ital anemometer, static pressure kit, Catch up on all the installments of this series:Part 1: What is High-Performance HVAC and Why Do It? ncilink.com/ABCs-1Part 2: Is It the Right Fit for Your Company? ncilink.com/ABCs-2Part 3: Five Steps for Becoming A Performance-Based Contractor. ncilink.com/ABCs-3Part 4: Five More Steps to Becoming a Performance-Based Contractor. ncilink.com/ABCs-418 NOVEMBER 2018HIGH PERFORMANCE HVAC TODAYple are hard to attract and keep. They are by far your most precious asset. Continuous investment and encour-agement to grow their knowledge and skills is vital to your success, not only in selling performance, but in all as-pects of your business.Figure 1 illustrates the typical steps contractors take as they progress up the path of High Performance, along with the investment in training and tools needed along the way.You can take these steps slight-ly out of sequence, but try to follow them as closely as possible - they are based on the experience of many peo-ple before you. This example is based on a company currently doing $1 million in annual Service and Replacement sales. Done right, a company this size could expe-rience as much as $600,000/year in very profitable additional Service, Re-placement, and System Renovation revenue within the first two years. Each step shows the approximate investment, and the cumulative Re-turn on Investment (ROI) you should experience as you achieve each goal. Of course, every company will ex-perience different results based on the pace they implement, the length of their technical and sales learning curve, and how well their team em-braces the culture change required for implementation.There’s no doubt that creating a High-Performance contracting busi-ness requires investment, but what sustainable long-term business An additional marketing campaign could market your company as the problem solver for people with Com-fort and Indoor Air Quality problems and high utility bills. Here you share how your installations are perfor-mance tested for guaranteed results. Once you’ve trained your people and have the methods, tools, and in-struments to stand behind this guar-antee, you can truly rise above your competition.PROCESS AND CULTURE CHANGEThis is by far the largest investment you’ll make in High-Performance Con-tracting, but it’s also the most import-ant and valuable one. Tools can always be purchased, formal training will al-ways be there, but knowledgeable peo-MANAGEMENTNOVEMBER 2018 19HVACTODAY.COMNext month we’ll dig deeper into the specific training needed to get and keep your company on the prof-itable and rewarding path to High Performance! doesn’t? Once you’ve made it through the learning curve, your investment will continue to pay off, month after month, year after year, with your re-turns increasing exponentially.Dominick Guarino is publisher of HVAC Today magazine and CEO of National Comfort Institute, Inc. He can be reached at domg@ncihvac.comFIGURE 1: Performance-Based Contracting Investment and ROIExample: Residential Company with $1 Million in Sales - 2 Service Techs and 2 installers, $600,000 Additional Annual Revenue with 20-25% Net ProfitCumulative Annual Net ProfitTrainingApproximate Investment Action/Tools NeededApproximate InvestmentTotal Investment15-20KStep 1: Air Testing and Diagnostics$500/field person x 4 $2,000.00 Static Pressure Kits$200/field person x 4 $800.00 $2,800.00 30-40KStep 2:Duct System Optimization $600/field person x4 $2,400.00 NCI Membership and ComfortMaxx $100/month x 12 $1,200.00 $3,600.00 40-60KStep 3:Air Balancing 1 Lead Balancer $800.00 Air Balancing Instruments for Balancer1 Pro-pack $5,000.00 $5,800.00 70-80KStep 4:HVAC System Performance $600/field person x 4 $2,400.00 Temperature/Humidity Instruments$250/field person x 4 $1,000.00 $3,400.00 80-90KStep 5:Combustion and CO $800/field person x 4 $3,200.00 Combustion Analyzers $1,000/field person x 4 $4,000.00 $7,200.00 100-120KStep 6:Performance-Based Selling 1 Salesperson $800.00 Set up PricingInternal $800.00 130-150KStep 7:Implementation1 Owner/ Manager $1,200.00 Update Systems, Processes, etc.Internal $800.00 $12,800.00 $12,000.00 $24,800.00 Next >