< Previoustwo sets of eyes helps reduce errors. So, which of us designs our duct systems depends on time and availability. There are several ways to lower your cost. If you’re not comfortable designing a system, you can look for an engineer to help with some of the load calcs or design. Just ask the engineer how the two of you can make it work. KEY CONSIDERATIONS ON RESIDENTIAL SYSTEM DESIGN When designing a High-Performance HVAC system, we consider several key issues: house de- sign, space for ducting, Indoor Air Quality (IAQ), proper equipment sizing, and other areas of- ten overlooked, such as exhaust fan fenestration and more. IAQ has become more important than ever, but so has its cost, and if you have taken NCI’s Duct Optimization Class, you know all too well that IAQ is like a dam holding back the water! The cli- ent is the throttle on the system. What I mean is they set the budget, then pick the accessories and equipment quality. We also think about how our duct designs translate to field conditions when installing it. Is it better to have three or four smaller ducts for return air rather than one large, restricted duct? What about crush factors because of space issues in framing? We also have bare minimums because some of our systems come with a 12-year or lifetime war- ranty. Warranties like this mean you need to in- stall the system properly. The owner must pur- chase certain parts of the design, like all new sheet metal ducting, new refrigeration line size, and so on. In our area, the government mandates that I receive many calls from contractors who ask me about the verifying aspects of a comfort system design. Their questions sometimes put me in a position to analyze a non-per- forming system. Here are some insights on how we do home sys- tem design and installation that have worked for us for over 50 years. From a design standpoint, Tetra Mechanical doesn’t have an on-staff Professional Engineer (PE) or work with a third party. I have a degree in engineering focused on HVAC and a degree in electronic engineering, along with 120,000 hours of HVACR field experience. I oversee all our designs, and our vice presi- dent of construction runs the installation side of the business. He also understands most aspects of design. He will check with me and I with him, What it Takes to Do Proper Residential System Design By Kent Donnelly TECHNICAL 10 JULY 2022HIGH-PERFORMANCE HVAC TODAYwho wants his home temperature set at 63°F during sleeping hours (5 am to 12:30 pm), which means that sys- tem needs to be custom designed and built. Custom design is what Tetra is all about. When laying out the duct system, we use a program called Bluebeam Revu, which allows us to do overlays or just about anything else. For a quick snapshot, we use EDS HVAC Load Calculation software to give insight into what a load calculation would look like for the home. Then we select equipment and accessories based on the customers’ desires. TRAINING MAKES OUR WORK BETTER Because we regularly train with National Comfort Institute (NCI), I believe it is hard to do an installation wrong. Because of NCI’s duct renova- tion and system performance training, we know NOT to take shortcuts! However, sometimes there are no options, and you face doing something that’s not optimal. That is when we know we are going above and beyond because our belief is to do everything possible to find a proper solution. We try to have everything laid out and planned. It’s tough fighting the box swappers who low-ball prices and take shortcuts. I see and get paid to fix the problem after those box swappers come and go. Once, I was asked to go into a home that had seven total HVAC systems. They shined like new pennies! Two did not cool at all; their compressors were damaged. The reason was poor duct design. All the other equipment had furnace troubles, and one had a fan literally coming apart. Within an hour of sending in my re- port, I found myself talking to some- one’s lawyer. Shortcuts don’t do your reputation any good, nor are they good for the equipment or the power grid. Lord Kelvin once said, “if you can- not measure it, you can not im- prove it.” He also said, “…when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsat- isfactory kind.” I had the numbers; I did the math as Lord Kelvin taught. So when I spoke, I knew I was 100% correct. We stay out of defense mode by be- ing honest and showing customers all their options based on science and measurements. We show them the test results from AirMaxx or Comfort- Maxx. That goes a long way, especially after you practice explaining it two or three dozen times to your dog or who- ever will listen. we use Low NOx heaters. These heat- ers have flame temperatures that ex- ceed 2800°F. Airflow is key to keeping the unit running. Therefore ductwork must be on point. WHERE TO START? Here at Tetra Mechanical, our de- sign strategy begins during the sales call. Our service technicians test, mea- sure, and collect as much data as pos- sible. Data includes pictures, sys- tem measurements, and whether the system is a planned replacement. We then use National Comfort Insti- tute’s (NCI) ComfortMaxx™ or Air- Maxx™ software to understand how the ducting is performing and what the equipment Btus are. We look at the ducting situation in all rooms, grill types and sizes, exhaust fans with total cfm, insulation, fenes- tration type and size, and the electrical panel. We also include any equipment model numbers. Other data includes whether the equipment uses propane, natural gas, or electricity for heating. Don’t forget to include the exhaust fans. Those fans remove air. That air must be made up. It can be pulled from ceiling light fixtures, the flue in the chimney, the furnace, or the wa- ter heater. The tighter the home, the more prevalent it becomes. Consider that you’re building a potential health problem. I have fixed dozens of sys- tems with this issue. Once we have all that information, our sales team gets the homeowner in- volved by discussing dust issues, noise problems, comfort level expectations, and power consumption concerns. NCI’s sales class with David Holt helped us in this area. For example, we have one client Kent Donnelly owns Tetra Mechanical, a $3.5 million HVAC contracting firm in Simi Valley, CA. This High-Performance HVAC contracting firm serves both commer- cial and residential air conditioning markets. If you’d like to learn more about Kent and his company, read their Contractor Spotlight here: ncilink.com/ tetra . Questions? You can reach out to him at ncilink.com/ContactMe . JULY 2022 11HVACTODAY.COMJULY 2022 13HVACTODAY.COM wanted to be the best we could be. So after tak- ing the classes, I realized Lakeside was missing an important design and installation perspec- tive. Airflow is the foundation of diagnostics, not a supplement. There was so much more we could accomplish through testing and measuring static pressures, doing combustion analysis, and even more that wasn’t in our heads yet. I wanted to do it all at once, but that was easier to dream than it was to implement. So, I became the guinea pig. I’d take the class- es and then use what I learned in the field. As I gained experience, we expanded to have a few of our top techs who understood static pressure prac- tice it in the field. I personally gained a lot of expe- rience and skill. However, we just didn’t seem to get the traction to make this our business model. An unfortunate result is that we created an un- intended technician mindset where high perfor- mance was for specialists only. Worse, the techs felt it didn’t need to be done every time. Half the guys didn’t understand what we were doing or why we were doing it. This division became a real leadership chal- lenge when we reached almost 20 techs but only four or five were certified. Imagine coaching a team and only letting the best players learn and practice the plays. How do you think they would perform together on the field? It doesn’t make much sense when I look back on it now, but my hindsight has always been better than my actual vision. A DIFFERENT APPROACH So, after almost a decade, we changed course in 2012 by doing a National Comfort Institute (NCI) onsite training session for the entire team. Onsite training is where the NCI instructor comes to your C raftsmanship is a skill in a particular craft that creates something elegant and high-quality. It delivers a lot of value and, within the HVAC industry, a lot of performance. Being craftsmen helps our compa- ny, Lakeside Service, build better systems, and to be better in-home service professionals. The transition didn’t just happen. In fact, it took five to 10 years to get to where we are today, and I don’t know if we will ever truly finish. We first discovered the high-performance approach to HVAC almost two decades ago. At the time, we had no idea where that first airflow class was go- ing to lead us. Looking back at the road to implementing high performance into our business, we learned many lessons. One that really stuck was we had to build our technicians into craftsmen, not just laborers who punch a clock. CRAFTSMANSHIP BEGINS WITH TRAINING Everything starts with train- ing. In 2004, I attended my first NCI airflow class. Short- ly after that, we got into per- formance-based training, but not at a companywide level. I would go to classes with a few of our techs to learn what we didn’t know. We believed this training was the way to go, but we lacked a plan to implement it on a company-wide scale. As a company, we always Build Craftsmen, Not Laborers By John Boylan MANAGEMENT NCI’s David Richardson teaching one of Lakeside Service’s onsite classes.14 JULY 2022HIGH-PERFORMANCE HVAC TODAY Lakeside Service uses this data collection form - a digital, fillable, PDF - that is built into their Service Titan management software. business and conducts the exact train- ing they do all across the country. The difference: only your team attends. Now it seems so obvious. We had hired consultants multiple times over the years to come in and teach man- agement about the business side of things. Why didn’t we take this on-site, all hands on deck approach earlier? I suppose partly because Lakeside never invested in this level of techni- cian training, and I’m sure there were concerns about the cost. It certainly wasn’t part of any long-term plan the first time we did it. We just knew that we needed to do something different. It didn’t take long to realize our techs LOVED it. Because of our on- site training, we now have all of our technicians certified. Everyone knows how to do static pressure testing and some air-side diagnostics, not just the privileged few. CREATING PROCESSES We soon realized that if we didn’t change our internal processes and didn’t include our air diagnostics ser- vice on our documents, forms, and dai- ly routines, high-performance testing would never get fully implemented. Even after the onsite training, we still had techs who weren’t comfort- able testing. Plus, there was the is- sue regarding which tools and instru- ments to use. I think we had some unrealistic ex- pectations at first. We assumed that once trained, technicians could hop in their truck and start using the knowl- edge. We found that might work for a few of them, but to really get every- one onboard a little planning went a long way. We knew craftsmen need proper tools for the job, so our first goal was to figure out what those tools should be. Right off the bat, the team need- ed manometers. We settled on some- thing simple that everyone could af- ford. It was digital, and we made sure that each tech had one. The next step was to focus on things we could control the most. We started to document static pressure on every maintenance call. Once that became routine, we added static pressure testing to every installa- tion startup. And just to give some per- spective, the amount of time from the first on-site training to every installa- tion was probably two to three years. DATA COLLECTION AND ANALYSIS With the guys finally doing regular testing, we needed to gather that data for analysis. We decided the smart- est and quickest way was to use the NCI HeatMaxx™ and CoolMaxx™ forms. Because almost none of our techs had tablets at that time, we opted out of using apps and other software. We filled out those forms on every maintenance call and anytime there was an issue. I loved those forms! They were easy to use and let us record our measure- ments and make carbon copies so we could leave one with the customer. It was a few years into testing be- fore we customized our forms to fit our needs. Even then, they were a combination of data recommended by equipment manufacturers and the data points on the NCI forms. Today, we use a digital fillable PDF that we built into our Service Titan service management system. Whichever way you decide to re- cord the data, the important thing is that someone makes sure the testing is done, recorded, and verified on ev- ery invoice. It takes time and energy, but it needs to be done. FIRST BUILDING PERFORMANCE. THEN HIGH PERFORMANCE Going back before testing was com- pany wide, near the end of 2009, my father had encouraged me to get Building Performance Institute (BPI) trained and certified. Once I complet- ed that training, I added energy au- dits to my sales responsibilities. I sure learned a lot and we improved a lot of houses, but without combining static pressure testing or airflow to the pro- cess, I was missing the big picture. It wasn’t long before I realized we were overlooking the ductwork. As a home energy tester/auditor, I could help customers achieve Ener- gy Star specifications, but addressing the building envelope without the duct system wasn’t solving any real issues. I think every NCI member knows if JULY 2022 15HVACTODAY.COM MANAGEMENT that should come with performing this level of service. When they feel and express this in their work, the cus- tomers who always complain about price seem to disappear. At Lakeside, we believe you cannot leave testing, measuring, and struc- tured diagnostics out of the equation and solve the real problem. The ques- tion is, how do you get your team to sell this for its value? It comes down to your ability to communicate with your team effectively. John Garofalo often told me “lead- ers are not born, they are made.” Ev- ery leader’s ability to motivate boils down to trust, and trust is earned through consistent action. The con- sistency of someone’s actions equals their integrity. Our craftsman approach was born from the intention to be the best we could be. The unintended result is our culture today helps us win awards and build confidence. It makes Lakeside an attractive employer for young peo- ple who like our ‘cool factor.’ Success requires our leadership to create a craftsmanship culture with buy-in and passion from the top down. So that is how Lakeside Service craft- ed our High-Performance HVAC cul- ture and changed our business. into our daily rou- tines, adding test- ing to all mainte- nance, service, and installation procedures. At this point we experienced so much positive feed- back that we budgeted for at least one NCI onsite per year. One of the most significant rewards for me was being able to listen to cus- tomers share what our techs did that directly affected their comfort, and how no other contractor ever talked about these things. From our techs’ viewpoint, espe- cially the younger guys right out of school, we were doing things they nev- er learned. For example, no one else was leaving a tune-up or maintenance report with customers. They are doing next-level work, and that was some- thing cool that changed their per- spectives. It built excitement in their careers. The high-performance approach has helped us instill a level of pride that comes with working at Lakeside. It en- ables our team to create something el- egant and high-quality that delivers a lot of value to our customers. And that is something that anyone can go home feeling good about. SELLING YOUR VALUE You deserve to be paid for what you do. High-Performance contracting is for those who want to be the best. Craftsmanship is elite contractor stuff. It’s not the same as running service calls to make a buck. Be sure to let your team know this when you talk to them. Don’t just say it, make them feel it. Use how you connect with your team on a person- al level, and let them feel the pride you don’t work on the heating and cooling systems, other major appli- ances, and ductwork, there is no way to achieve significant energy savings. Why? Because the HVAC system con- sumes over 60% of the energy in a typical home. So, we used the HeatMaxx and Cool- Maxx forms in combination with our BPI processes while participating in the Home Performance with En- ergy Star program from 2010 to 2014. We would use the program soft- ware to rate the building envelope, and the NCI forms to see the other side of the performance story by rat- ing installed HVAC system efficiency. The turning point in Home Perfor- mance occurred when our energy au- dits led to us selling duct renovation jobs that began making Lakeside real money. When Lakeside was busy, we sold duct renovations and then scheduled work for the off-season. That leveled out our labor and ultimately led to keeping the field team busy all year. We saw our tech turnover drop signifi- cantly. That was a huge win. LEADING THE WAY Once our management team saw the economic advantages of airflow diag- nostics and duct renovation, they be- gan focusing on building a culture of craftsmanship. Now our technicians could truly ex- cel at solving customers’ comfort and energy issues. This also opened our minds to investing in that first on-site training in 2012. To quote the late great John Garofalo, “The juice was worth the squeeze.” Our leadership set expectations and implemented testing and diagnostics John Boylan is the gen- eral manager of Lake- side Service Company in Brighton, MI. The company specializes in designing, engineering, and installing complete comfort systems in new and existing homes. To contact John, go to ncilink.com/Contact Me.16 JULY 2022HIGH-PERFORMANCE HVAC TODAYJULY 2022 17HVACTODAY.COM Pricing Profitable Air Upgrades and Duct Renovations By David Holt SALES MANAGEMENT W hen pricing high-performance air upgrades and duct system reno- vations, you must focus more on the lifetime value delivered to the customer, and less on the estimated job cost. When you only consider raw costs, you mini- mize the craftsmanship involved in creating the high-performance results associated with your custom-built solutions. The recipe for success when pricing these im- portant products includes three main ingredi- ents: Mindset, Toolset, and Skillset. You may be thinking, “yeah, I’ve heard that message before, so I can just skip this arti- cle.” Not so fast! Read on for a fresh per- spective on proper pricing strategies for these valuable products that only your team can deliver. The juice will definitely be worth the squeeze. PROFITABLE PRICING BE- GINS WITH THE PROPER MINDSET In his article entitled, “What Are You Worth?” (ncilink.com/Worth), Matt Michel wrote: “Fail to charge enough and you tell the world you aren’t worth much. Worse, you tell your cus- tomers you aren’t worth much. “Even worse, you tell your employees you ar- en’t worth much. Worst of all, you tell yourself you aren’t worth much. That’s a horrible mes- sage to send.” So, what are YOU worth? Aren’t you a high-performance HVAC contrac- tor? Haven’t you heavily invested in the tools and training required to be a craftsman in this trade? As a result of these investments, aren’t you worth more than “low-bid Larry”, the guy who just re- places equipment without ensuring that the en- tire HVAC system is operating as it should? Of course, you are! A LOW-BID MENTALITY HOLDS EVERYONE BACK This low-bid attitude has everyone in the in- dustry fighting for survival and puts the entire industry in a scarcity mindset. It forces you to focus on immediate gratification (closing a sale right now, even when they aren’t profit- able jobs) and short-term problem solving (fixing immediate problems without consid- ering long-term safety, health, comfort, and efficiency impacts). The low-bid mindset perpetuates the false perception that this is a dog-eat-dog industry operating from an “us-versus-them” men- tality. This price-based com- petitive tactic continues the narrative that the HVAC in- dustry is tough and toxic, and everyone is scraping the barrel just to get by. It doesn’t have to be that way. DO YOU BELIEVE THE HIGH-PERFORMANCE HVAC APPROACH IS WORTH IT? If you don’t believe you are worth more, how do you expect anyone else to pay you more? High-Performance HVAC professionals are worth more, but only you can demonstrate that to your team and your marketplace. If that little voice in your head keeps saying “everybody in my market only buys the low-bid option,” you need to change your mind! That “lit- tle voice” is a liar and needs to be exposed to the 18 JULY 2022HIGH-PERFORMANCE HVAC TODAY truth that, believe it or not, most buy- ers DO NOT have a low-bid mentality. Sure, building contractors and prop- erty managers have a low-bid mindset, but Mr. & Mrs. Smith on Elm Street are customers who literally live with their HVAC decisions. They are willing to in- vest more to enjoy the safety, health, comfort, and energy efficiency bene- fits that you offer. Those low-bid build- ing contractors and property managers don’t really care about that – they just want to keep initial costs down. THE RIGHT TOOLS FOR THE JOB Multiple studies prove that the Pa- reto principle (the 80/20 rule - roughly 80% of consequences come from 20% of causes) also applies to pricing strategies. When using a well-crafted Good-Better-Best ap- proach, experience demonstrates: z 10% of buyers select the “good” op- tion (lowest initial cost, minimum performance) z80% of buyers choose the “bet- ter” option (higher initial cost, im- proved performance) z10% of buyers invest in the “best” option (highest initial cost, ulti- mate performance). That means that 90% of buyers choose based on the perceived value of the contractor’s qualifications, ex- perience, processes, past results, rec- ommendations, reputation, and per- formance benefits of the offer, NOT lowest price. That’s good news for high-performance HVAC contractors like you! You must focus on high-per- formance value, not lowest price. THE POWER OF CHOICE You must change YOUR mind about your pricing methods because most of your customers are already primed for performance-based decisions. Cus- tomers have difficulty determining the true value of your offer unless they have something to compare it with. When you only offer one price, they are psy- chologically compelled to compare it to another contractor’s price. When you offer multiple options, customers can easily compare the prices and decide based on their per- ceived value of each offer. This can eliminate getting other bids because you have satisfied their psychological need to comparison shop. When you make it easy for them to comparison shop, you win more jobs. The good-better-best pricing ap- proach is a tool that has satisfied the psychological need for comparison shopping for decades. The strategy is simple. Charge a little, deliver a lit- tle. Charge a little more, deliver a little more. Charge a lot more, deliver a lot more. What could be easier? We used this pricing method at my Dad’s HVAC business. In 1998 (the last full year we owned the compa- ny) our average sale price was $7,600 while our typical competitor was hov- ering around $3,500. Offering a menu of choices with increasing value in each option really works! PROPER PRICING MAKES MANY PROBLEMS SOLVABLE In Michel’s article, he stated “Prop- er pricing will not solve all problems, but it will make many problems solv- able.” He is 100% correct. When you sell jobs at the “right” price, you will have the money to hire and train the right people; you can equip them with the right tools and instruments; you can stand behind your work; you can build a business that works, so you don’t just have a job. In the customer’s mind, your price defines your product. Everyone knows you get what you pay for. Customers want and deserve great products. By offering and delivering great solutions that solve customers’ short- and long- term problems, you earn the great re- wards that you deserve. Think about it — can you fix dust problems, uncomfortable rooms, pressure imbalances, and other com- mon customer complaints by simply changing out the condenser, evapora- tor, and furnace? Of course not! Re- solving those problems requires more tools, training, products, and ser- vices. Solving more problems means more money must be invested. Isn’t this easy? HIGH-PERFORMANCE HVAC IS NOT A COMMODITY Let’s face it... HVAC equipment is a commodity item. Almost all units produced in our industry are assem- bled using components manufactured by Copeland, ICM, Fasco, Honeywell, Emerson, and so on. They are almost identical to each other in many ways. That’s what makes them a commodity. The High-Performance HVAC ap- proach is unique. You must use ad- vanced diagnostics skills; determine the real problem using the right tools; understandably communicate truthful findings and recommendations; price the solutions appropriately; solve the customer’s problems; and stand by your end-product. That is a real spe- cialty, not a basic commodity. EDUCATION IS THE KEY The key component in the high-JULY 2022 19HVACTODAY.COM SALES MANAGEMENT FIGURE 1: Net Profit Maximizer equation performance approach is your educat- ed people. Without investing in em- ployee education, you’re just like the rest of the industry. In a “revolving door” world where employees come and go, many people fear investing in education. Many contractors ask, “what if I train them and they leave?” My question to them is, “what if you don’t train them and they stay?” When my Dad’s business got se- rious about training our people, our employee door quit revolving. We en- joyed better loyalty and our team was more cohesive because everyone was empowered and equipped with the tools and training needed to be suc- cessful in the role for which they were being paid. In addition, we got multiple employment applications from good people who wanted to work for a Next >