HIGH-PERFORMANCE HVAC TODAYHVAC TODAY TM If You Don’t Measure, You’re Just Guessing! ™ hvactoday.comFEBRUARY 2021 Attract and Retain Good Salespeople ALSO IN THIS ISSUE: Residential Market Review and Forecast: 2021 Is a Year for Optimism Translate Data into Solutions Your Customers Seek The Flue is Too Big? FEBRUARY 2021 3HVACTODAY.COM FEBRUARY 2021 VOLUME 5 NUMBER 2 HIGH-PERFORMANCE HVAC TODAYHVAC TODAY TM SALES: How to Attract and Keep Good Salespeople Isaac Heating Sales Manager Andrew Torres explains how their culture makes a sales position one to covet. MANAGEMENT: Residential Market Review and Forecast Editor-in-Chief Mike Weil sees silver linings in 2020 with an economic upturn in 2021. Buckle your seat belts! TECHNICAL: The Flue is Too Big? What makes older commercial building flues the target of code officials regarding ventilation & condensation? Jim Davis shares his thoughts. SALES: Translate Test Data into Solutions Your Customers Seek Offering measureable HVAC system solutions requires you to become a translator, a good listener, and a teacher. 1713 106 DEPARTMENTS Today’s Word .........................................................................................4 High-Performance Product Review ...............................................5 Member Update ...............................................................................19 HVAC Smart Mart ...............................................................................20 Ad Index ................................................................................................21 One More Thing ................................................................................224 FEBRUARY 2021HIGH-PERFORMANCE HVAC TODAY meet the incredible new demand for delivery and pickup services. And of course, other parcels of land are being set up and used for medical over- flow and vaccine delivery. This move toward re-purposing buildings is good news. Why? Because every one of these buildings will need HVAC system renovations as well. For the High-Performance HVAC contract- ing community, this is a wonderful opportunity. PREPARATION IS KEY Like everything else in our industry, competi- tion for this work will be fierce. Applying a per- formance-based approach to testing, measuring, and diagnosing airflow and comfort issues can be a huge advantage. It doesn’t matter if the buildings have all new uses or are being renovated by existing business- es looking to reopen when they can. The need for superior HVAC service and installation is grow- ing, and will continue to do so. DON’T FORGET ABOUT RESIDENTIAL As good as the commercial sector is, don’t for- get about the giant growth in residential renova- tion and service opportunities. With more people working from home, there is a demand for HVAC systems that operate efficiently and comfortably. Systems that provide safe indoor environments and air quality are more important than ever. Oh yeah, one more thing: with the COVID vac- cines now beginning to circulate, many experts see our economy poised for a serious rebound later in 2021 and beyond. So let the hits keep on coming. If you set your goals, train your team, and adapt a high perfor- mance approach to HVAC contracting, your abil- ity to win in this very changed environment is al- most a foregone conclusion. O ver the course of the last year, with the pandemic raging hard in the North- eastern Ohio area, I’ve opted to not go out that much. On those rare occa- sions that I do, I get hit with the reality of COVID’s impact on our world, and in my neighborhood. For example, the other day I went out to run a few errands. One of my stops was to my local bank to grab a cash infusion from the ATM ma- chine. When I got there, the building was empty. My bank was gone. I had just been there a few weeks previously and all was “normal,” at least as far as I could tell. Furthermore, across the street from the bank looms the empty hulk of a once-vibrant shopping mall that fell onto hard times (pre-pandemic) and now all the stores and restaurants are also gone. Today, it too is just an empty shell. Up and down the main drag I saw how many stores and small businesses were shuttered and dark. I felt like I was in an old Twilight Zone episode. The hits from the pandemic just keep on com- ing. All across the country commercial buildings, schools, libraries, and so many businesses are simply no longer operating. Either they have fall- en by the wayside or have transitioned to a digi- tal/online business model. So the question is, what will happen to all those empty buildings? RE-PURPOSING GIVES HVAC CONTRACTORS NEW PURPOSE The good news is that nothing ever kills the American entrepreneurial spirit. In Cleveland, for example, some building owners are renovat- ing structures to better accommodate the new rules for social distancing and safety. Other buildings are being taken over for things like community kitchens to help local restaurants Will the Hits Keep Coming? For HVAC Contractors, Let’s Hope So! Mike Weil is editor-in- chief and director of communications & publications at National Comfort Institute, Inc. To reach him, go to ncilink.com/ContactMe TODAY’S WORD By Mike WeilFEBRUARY 2021 5HVACTODAY.COM the customer and say, “To make sure I de- sign a system that best suits your needs, please read these cards and arrange them in order of their importance to you and your family.” In most cases, we find that custom- ers prioritize them in this order: Safety, Health, Comfort, and Efficiency. Once they’re done, you simply say “Thanks. Let me tell you how our compa- ny helps you enjoy each of these important benefits.” Then, start with their top priority. Flip the card over and share how your recom- mendations address the benefit. Close the current card discussion with, “Can you see how we’re going to make sure your sys- tem is the safest solution for you and your family?” Change “safest” to “healthiest”, “most comfortable”, or “energy-efficient”, NATIONAL COMFORT INSTITUTE “PRIORITY CARDS” Here is something to help you simpli- fy your sales presentation by highlight- ing the features and benefits of your high-performance HVAC approach in an easy-to-understand way. After all, don’t your customers deserve the saf- est, healthiest, most comfortable, and energy-efficient indoor comfort system they can afford? The National Comfort Institute (NCI) Priority Cards help your customers un- derstand everything they get through your indoor comfort solution. This helps eliminate competition and win you more jobs. Here is how they work: Comfort Ad- visors place the cards (with the “defini- tions” facing up) on the table in front of HIGH-PERFORMANCE PRODUCT REVIEW Written By HVAC Professionals for HVAC Professionals depending on the card being discussed. Continue with the next card until each has been discussed in order. When customers clearly see that your approach provides superior value, you eliminate the competition and win more jobs! To learn more about NCI Priority cards, and/or order them for your team, just go to ncilink.com/priority . – By David Holt, NCI Director of National Accounts6 FEBRUARY 2021HIGH-PERFORMANCE HVAC TODAY By Mike Weil MANAGEMENT 20212021 : A Year to Be Optimistic: A Year to Be Optimistic to October 2019. Year-to-date U.S. HVAC equip- ment shipments decreased by 6.5%. These are the latest figures released by AHRI in December 2020. Shipments are based on num- bers provided by the HVAC product manufactur- er members. Furthermore, central air conditioners and air- source heat pump shipments also saw an increase in October, up 57.8% from October 2019. Year- to-date combined shipments of central air condi- tioners and air-source heat pumps increased by 8.9% during the same period in 2019. Overall, this was great news for HVAC manu- facturers. Yet plenty of contractors began feeling a pinch as the supply chain seemed to shrink. It became harder to obtain the products necessary to service their customers. Blame COVID for the number of workers either out due to illness or working remotely and unable to process orders efficiently. But that is changing, and the channels should be freeing up as the Pfizer and Moderna vaccines reach more Americans. THE 2020 CONTRACTOR IMPACT HVAC companies had to make major changes to how they did business as consumer and worker safety within the Pandemic restrictions became the order of the day. High-Performance Contrac- tors had to adapt how they provided continuing education and training to their field service and installation technicians. Early adopters didn’t miss a beat. Even so, unemployment was high toward the end of 2020 and remains so during this first quar- ter of 2021. Still, ITR Economics’ Saidel-Baker concluded that overall, consumer finances are relatively healthy and have been supplemented WW ell, 2020 certainly didn’t turn out the way everyone predicted in January and February last year. We had this little thing called the COVID-19 Pandemic turn the economy on its head. Or did it? From my perspective, if one only relied on the reports from mainstream media, the economy is a picture of endless doom and gloom. Truth be told, shutting down the country to bat- tle the virus did lead to mass unemployment, the likes of which haven’t been seen since the crip- pling recessions of the late 1970s and early 1980s. But there is a difference. In a press release published in mid-Decem- ber 2020 by ITR Economics, Economist Lauren Saidel-Baker stated that “Unlike the Great Reces- sion of 2008, which was triggered by underlying economic factors, the 2020 recession was not so triggered.” She said, “The recession of 2020 can be quan- tified as a natural disaster rather than the result of a regular, fundamentals-driven business cycle. The current economic contraction was triggered by a global pandemic, not by economic imbalanc- es that demanded a correction. Recent economic data corroborates the fact that this case really is different.” While small businesses took the brunt of the disruptions, many large corporations weathered the Pandemic quite well and even prospered in these difficult times. HVAC INDUSTRY OVERVIEW Case-in-point: The latest HVAC shipment figures, as compiled by the Air Condition- ing, Heating, and Refrigeration Institute (AHRI), shows a 21.6% increase in warm-air furnace shipments in October 2020 as compared Residential Market Review and ForecastFEBRUARY 2021 7HVACTODAY.COM unemployment benefits. “Unemployment has dispropor- tionately affected low-wage workers, who are typically young and renters. “According to data from mortgage finance agency Freddie Mac, the 30- year fixed mortgage rate is around an average of 2.81%,” the report says. “Growth estimates for the July-Sep- tember quarter are as high as a 35.2% annualized rate, which would recoup roughly two-thirds of the output lost because of the Covid-19 pandemic.” MORE GOOD NEWS In a recent Forbes magazine arti- cle, office construction numbers are down, and Forbes attributes that to the fact that the pandemic has forced so many to work from home. The mag- azine also says that is great news for the HVACR Industry. “As more people work from home, demand for home improvements — including HVACR upgrades — has soared due to the pandemic. IBIS- World (an international industry re- search firm founded in 1971) expects 1% average growth in this $47.6 bil- lion (estimated 2020 revenue) indus- try through 2025,” writes Forbes guest columnist Peter Cohen in an October 2020 article titled, 3 Ways to Invest in the Future of Air Conditioning (ncil- ink.com/ForbesHVACInvest). Cohen interviewed executives from several key HVAC manufacturing companies. In his interview with Chris Nelson, president of Carrier HVAC, he quotes Nelson saying the pandemic shined a spotlight on the importance of indoor air quality and put it “cen- ter-stage.” Nelson told Forbes this bodes well for the HVAC Industry, which was modestly hurt by the shutdowns. He is quoted as saying the HVAC Industry will likely benefit from future growth in IAQ and home renovations. REPLACEMENT MARKET REMAINS KEY GROWTH DRIVER All is not about the impact of COVID-19. The HVAC Industry has enjoyed continuous growth in the re- placement sector due to aging me- chanical system equipment in resi- dential and commercial arenas for decades. Today, advances in technol- ogy, connectivity, low or no-interest financing options, and other factors play well for contractors and consum- with the two stimulus packages issued by the Trump administration. There is an even bigger supplement that could be coming from the in-coming Biden administration. She adds that consumer spending wasn’t nearly as high as pre-pandem- ic spending because of lockdown mea- sures. That means overall savings in the U.S. today are historically high- er than normal and will be available to “feed pent-up demand,” which will fuel economic recovery. OFF TO THE RACES IN 2021 At the midway point of the first quar- ter of 2021, residential building activi- ty should continue enjoying an upward trend that began several years ago. So says the December 17th, 2020 U.S. Census Bureau report. It shows privately-owned housing starts in No- vember increased 1.2% above the re- vised October estimate of 1,528,000 housing units, which is 12.8% above the November 2019 rate. Furthermore, according to a recent CNBC report (ncilink.com/CN- BCHousing), “The housing market has been a bright spot in the economy despite 25.3 million people being on 8 FEBRUARY 2021HIGH-PERFORMANCE HVAC TODAY MANAGEMENT the talking heads in the media drum on about doom and gloom, things are looking up, and High-Performance HVAC contractors should approach the new year with that in mind. From training to how you run your business, to how you interact with cus- tomers, close more sales, and increase profits, I believe 2021 will be an excel- lent year for the HVACR Industry. So get ready and be optimistic. The indicators are all pointing up. lessons learned during the shut- downs and with changes in how they work with customers (ncilink.com/ ICYMI0113). A STRANGE NEW WORLD If you go strictly by the numbers, 2021 has enough potential for us to be optimistic. When you add in the addi- tional value that Performance-Based Contractors bring to the table, and the renewed focus on improving indoor air quality, the potential can not only make up for any ground lost last year, but go well beyond that. As more Americans get inoculated against COVID-19, and the country begins to settle back into more pre- pandemic normalcy, the opportunities will continue to grow. Despite what ers when it comes to replacing existing equipment that has reached the end of its operational lifespan. Market research company, The Free- donia Group (ncilink.com/Freedo- nia2021) sees air conditioning equip- ment accounting for the largest share of demand, while heating equipment will post tremendous sales growth. They say the largest growth region in the U.S. in 2021 will be in the south. For Performance-Based Contract- ing™ firms, this bodes even better in that their focus isn’t only on the equip- ment, but also on the comfort delivery systems. Last month, I spoke with several performance-based contractors who had positive outlooks on the com- ing year. They had big-time takeaway Mike Weil is Editor-in-Chief of High-Performance HVAC Today magazine as well as director of communi- cations for National Comfort Institute. He has served the HVAC Industry for nearly 40 years in various editorial positions. He can be reached at ncilink.com/ContactMe.Next >