< PreviousAs a result of all this and more, we will continue seeing price increases throughout the HVAC value chain. A byproduct of supply chain is- sues and price increases is that many HVAC contracting businesses serv- ing the residential service and re- placement markets are selling out to private equity firms. Private equi- ty firms are creating bigger nation- al companies that can more easily work through supply chain and other issues. As a result, this may be the best time in HVAC Industry history for contrac- tors to sell their businesses. THE CONTINUING IMPACT OF TECHNOLOGY Because more people are working from home today, and with the con- tinuing spread of respiratory illnesses, Indoor Air Quality (IAQ) is more im- portant than ever before. The good news, according to the 2022 American Home Comfort Survey, is that homeowners are will- ing to spend 65% more on IAQ than they were five years ago! Plus, they are willing to pay more for Smart Tech- nology that allows them to squeeze more value from every energy dollar they spend. In a recent CMS NextTech blog post, Matthew Jones says, “In the U.S., 24% of households already own a smart thermostat, and 80% of those people plan on buying another in the future, as the Consumer Technolo- gy Association reported.” Furthermore, advancements in emerging technologies like artificial intelligence and virtual reality are changing everything in HVAC. Some other technologies to watch include: zIce-Powered or Thermal Stor- age-based Air Conditioning. Learn more about this in a January 2023 article by Jeff Sturgeon of National Comfort Institute zState-of-the-art High-Perfor- mance HVAC Testing and Di- agnosis tools and training – The technology behind these tools and instruments continues to evolve to help trained and certified HVAC pro- fessionals test and measure HVAC systems. This ensures those systems, including ductwork, operate at peak performance and deliver the highest energy and comfort value to home- owners z Smart Air Conditioning Sys- tems are part of what is known as “The Internet of Things.” HVAC equipment can connect, over the In- ternet, to other smart appliances in a home to allow homeowners AND contractors to monitor and control energy use and comfort zSome manufacturers are starting to use 3D printers to create parts and supplies that are in short supply be- cause of supply chain issues. Some HVAC manufacturers are exploring this technology and more to help al- leviate shortages z Digital Payment Technology. I’m not talking about credit card swiping here. Technology from company and service management systems can enable digital invoic- ing and accepting payments from systems like PayPal, Apple Pay, and others zDigital Communications with your field service, installation techs, and customers increase productivity and improve customer relationship building. He writes, “Manufacturer price in- creases across 2022 resulted in price increases greater than the reduction of installations. Overall revenue jumped, labor fell (fewer jobs), and profit soared. The same thing that happened in 2022 will happen in 2023, thanks to price increases from SEER2. Fewer in- stallations for more money will mean record profits.” Supply chain issues will continue through this year, though many logis- tics experts say that this situation may substantially ease by the third quarter. However, in an October 2022 Bloomberg Newsletter, author Bren- dan Murray warns that this might be overly optimistic. He quotes one Ja- son Miller – an associate professor of logistics at Michigan State University – who says that we should be wary of excessively confident predictions of a return to supply chain norms in 2023. “Across all manufacturers, an insuf- ficient supply of labor and raw mate- rials has been effectively unchanged since the third quarter of 2021 in terms of severity,” says Miller. HVAC manufacturers and distribu- tors recognize that things remain tight and are taking steps to battle short- ages. In the recently published AHR Expo 2023 Trend Report, Steve Yurek, president and CEO of AHRI, says, “The current situation is unsus- tainable and is leading members to re-evaluate the sourcing of compo- nents to better ensure reliable avail- ability in the future.” This, combined with the industry’s need to ensure that next-generation refrigerants can be used safely in residential applications across all 50 states by mid-decade, are the top priorities at AHRI right now, according to Yurek. 20 FEBRUARY 2023HIGH-PERFORMANCE HVAC TODAYMANAGEMENT thumb training approaches. As an in- dustry, we must focus on field testing and measuring entire systems, includ- ing the ductwork, to ensure consumers achieve the efficiency and comfort they want and deserve. Every member of the HVAC supply chain must be responsi- ble for improving training and using it to attract younger people who love it. Measuring goes beyond the num- bers. It also includes interpretation of those numbers and communicating them to customers in easy-to-under- stand language that helps them in their purchase decision-making. To quote the late Rob Falke of National Com- fort Institute, “If you’re not measuring, you’re just guessing.” Since more consumers are willing to pay higher prices for eco-friend- ly systems, this is a golden oppor- tunity for High-Performance HVAC Contractors. 2023 LOOKING GOOD Overall, 2023 is poised to be a huge year for the HVAC industry, with the central issue in meeting the increas- ing demand for products and services across the nation. Creativity, commu- nication, and the willingness to test every service and installation project can help you set your business ahead of competitors and meet customers’ demands. And, oh yes, you must charge the correct prices to continue successful- ly serving your customers in 2023 and beyond. seen heat pump demand strengthen significantly in recent years. Since 2017, air-source heat pumps have grown from 21 to 25% of HARDI dis- tributors’ annual unitary sales.” He adds that demand for gas-fired furnaces could drop if electrification takes root. “We have already seen an annual rate of heat pump shipments exceed furnace shipments,” Gee says. Decarbonization – Also in the AHR Trend Report, David Budzinski, VP and general manager of Johnson Controls’ residential and light com- mercial divisions, says, “The push to- ward decarbonization and electrifica- tion is accelerating, driven by climate change, the insecurity of world energy supplies and new legislation, like the Inflation Reduction Act.” ONE FINAL THOUGHT – WORKFORCE DEVELOPMENT Workforce development remains a nagging issue for the overall HVAC In- dustry. While the Green Wave push- es America further toward sustainable net-zero energy use and environmen- tal conservatism, the Grey Wave push- es Baby Boomer workers and man- agers into retirement, leaving great chasms in the HVAC workforce across all the value chains. The industry must get better at at- tracting young people, veterans, wom- en, and minorities into the HVAC trade. The collective mindset must move away from the current hit-or- miss recruitment tactics and rules-of- You can’t talk about technology without addressing a growing prob- lem that directly results from it: Cy- bersecurity. As more HVAC equip- ment and tools rely on Smart tech and the Internet of Things, the chances of breaches increase significantly. Though the cybersecurity focus on commercial buildings is essential, the industry should also pay attention to residential homes. Look for more cov- erage of potential residential HVAC threat considerations and how to plan for the connected future throughout 2023 and beyond. SUSTAINABILITY AND THE GREENING OF AMERICA The Green Wave continues wash- ing over the U.S. with more efforts focused on energy and sustainabili- ty. This trend affects our industry in many ways. Again, several recent sur- veys find that more than 50% of HVAC customers will pay for more expen- sive, eco-friendly systems. Look for energy prices to contin- ue climbing throughout the year and as mentioned earlier, increasing pric- es for new HVAC equipment. Add to this the fact that with the newly im- plemented SEER2 energy efficiency standards, sustainable energy conser- vation becomes more important than ever. With that in mind, it may be worth looking into some eco-friendly offerings for your customers in the up- coming years. Other trends include: Electrification – In the AHR Expo 2023 Trend Report, Talbot Gee, CEO of HARDI, says, “The push to decar- bonize the U.S. economy is inextrica- bly tied to grid and building electrifi- cation, and as a consequence, we’ve FEBRUARY 2023 21HVACTODAY.COM22 FEBRUARY 2023HIGH-PERFORMANCE HVAC TODAYand identify total revenue, total percentage of growth, extreme weather patterns, and other out- liers that could have affected business. The exact data that you should consider should be: zNumber of new customers year-to-year z Average installation ticket zAverage overall closing rate percentage z Average service ticket by season zHow much you previously spent on marketing overall and quarterly z Overall average daily call count and seasonal call count z Overall membership conversion rate (How of- ten do you successfully convert customers to your maintenance plan?). Once you review these numbers and identify trends, possible weaknesses to address, and your current call capacity, you can begin calculating your new marketing budget to accomplish this year’s growth goals. 2. COVER ALL YOUR BASES Pay attention to all your products and services, not just equipment replacements. I understand that the big-ticket installations make the most money and demand the most attention, but don’t lose sight of your service offerings. New custom- ers are the lifeblood needed to grow your busi- ness. Your service calls are the easiest and most cost-effective way to sell “club” agreements and new systems. In addition to service, don’t forget the sub- sidiary products and services you offer, such as plumbing, IAQ (Indoor Air Quality), generators, fireplaces, water heaters, blower door testing, in- sulation, duct cleaning, and electrical. Spend time creating a schedule to highlight these addition- al services, especially to your existing customer E very HVAC business must have a market- ing strategy as a plan of action designed to promote and sell its products and ser- vices. The ultimate goal of a marketing strategy is to identify solutions by understanding the needs and wants of your customers. To do this effectively, you must create a budget and a plan for your business. Generally, most business owners tend to be re- active rather than proactive. Many tend to take on the entire burden of marketing themselves rather than having another employee, part-time or full-time, take ownership of marketing tasks and vendor relationships. There should always be someone in the business who can fully take own- ership of marketing so the owner can focus on the rest of the business demands. Your marketing plan needs to lay out a blue- print for everyone to follow quarter by quarter. Having a predetermined plan for all your market- ing campaigns laid out ahead of time allows your team to stay on top of opportunities and have “levers” ready to pull during slow and shoulder times throughout the year. This also reduces the last-minute stress of throwing something togeth- er and generally can save your company money by avoiding the extra costs of rush design jobs and services. When creating your annual marketing plan, be sure to consider these five items: 1. KNOW YOUR NUMBERS TO DEFINE YOUR GOAL Knowing your numbers is most important. Be- fore you can create a budget for the upcoming year, you must first know your sales and revenue growth goals for the current year. Look at your historical data for the last three years in business Five Key Considerations for Building Your Annual Marketing Plan By Colleen Keyworth MARKETING FEBRUARY 2023 23HVACTODAY.COM24 FEBRUARY 2023HIGH-PERFORMANCE HVAC TODAY co-op or distributor loyalty pro- grams/rewards? You would not believe how many panicked calls we get at year’s end because contractors have thousands of dollars of co-op or rebate mon- ey left on the table to use before January 1st. Work with local dis- tributors and manufacturer reps to find out what help they can offer. Again, do not only focus on your main equipment line. Be sure to work with the manufacturers and distribu- tors of your additional products and services to determine what resources are available to you for everything you sell. Most manufacturers will have spe- cialized financing offers that change quarterly, along with the marketing materials you can use to help advertise these programs. Does your local distributor offer equipment that you can use for contest giveaways or charitable giving? Find out at the beginning of the year if this is available. Distributors are a great re- source if you plan a “gift of heat” cam- paign during the holidays. Are there any local organizations or charities you already work with or want to work with? Again, identify these or- ganizations ahead of time and have a budget set aside for them. You should consider which local or- ganizations align with your business and its values. For example, if animals are a big deal for your company brand, prioritize any causes that help animals. Focus on one cause you want people to associate with your brand. Then use this metric to help you decide which local events to get involved in. 4. EXPECT THE UNEXPECTED Even your best-educated guesses will not prepare you for every un- known obstacle this year. The good news is that if the last few years have taught us anything, it is that “stuff happens.” We live in some exciting times: extreme weather, equipment shortages, drastic regulatory changes, labor shortages, and inflation. In addi- tion to your primary marketing cam- paigns, have at least two to three oth- er campaigns ready for emergencies. Examples of this may be an addition- al direct mail piece or a customer let- ter ready to drop when things look like they are slowing down. By the way, you should always plan on using some of your marketing for hiring. If your goal is for growth, your labor force will also need to grow. One excellent option to increase the effec- tiveness of any Indeed ad or social media job posting is to ensure you have an actively updated career op- portunities page on your website. This page should include video testimoni- als from current employees, an em- ployee referral program, and branded business cards with a QR code linked to your career opportunities page. 5. COMMUNICATE WITH YOUR VENDORS! Your vendors are vital to your mar- keting success. They are your partners in executing marketing plans. No mar- keting plan will work if you don’t com- municate with vendors what the plans are in advance. Evaluate your vendors and clearly understand what services they offer and what you signed up for. Examples of such vendors include: zYour website company and/or digi- tal advertising company zLocal advertising agencies z Local radio stations base who already appreciate you and may not know you offer them. Use special offers to generate more maintenance agreements every quar- ter but be careful not to undercut your current annual agreements. Last but certainly not least, be sure not to forget existing VIPs. Your club/ maintenance members are your de- voted customers and should always have their own exclusive offers for their loyalty. You should have special offers quar- terly targeted to these five groups of customers: installation, service, oth- er products and services, membership growth, and existing club members. 3. IDENTIFY ALL OF YOUR OPPORTUNITIES EARLY In which annual local community events do you plan to become involved? Create a calendar of these events and identify them by quarter and potential cost. Now is a great time to reference your historical marketing spending data. Do you want your business to participate in any new or additional events? Think about local marathons, firework dis- plays, farmers’ markets, festivals, pa- rades, high school sports, and county fairs. By identifying these events and opportunities early, you can budget accordingly and be more creative and proactive with your participation and advertising. Are you using any manufacturer This is an example of what a quarterly marketing special offers planning chart looks like, courtesy of Crystal Williams of LemonSeed Marketing.FEBRUARY 2023 25HVACTODAY.COM Colleen Keyworth is the director of sales and mar- keting for Online Access, Inc., an HVAC web mar- keting company located in Michigan. She is also president of the Women in HVACR organization and newly-elected president of the Interna- tional Network for Women in Cooling. You can reach her at ncilink.com/ContactMe. zYour direct mail/social media mar- keting providers z Full-service marketing management company. Make sure you know what your costs are and budget accordingly. By considering all five of the above points as you plan your marketing for the year, you will be well on your way. However, success only comes with im- plementation and consistency. The most significant difference I find be- tween contractors who grow their businesses and those who stagnate are these two things: Implementation is the key to any best practices or plans for your busi- ness; they only work if you activate them. Consistency is the other most cru- cial piece. Far too often, we are expect- ing instant results from a long-term game. So many contractors try some- thing once and drop it after two or three weeks because it didn’t instantly produce. This is a huge mistake. Marketing and branding are a series of touch points and impressions that build awareness and trust with your customers. Don’t be afraid to stick to your plans. Switching campaigns con- stantly is drastic and often costly. Being intentional about planning your marketing will pay off, especially if you stay focused and actively imple- ment your strategies.26 FEBRUARY 2023HIGH-PERFORMANCE HVAC TODAYmance HVAC contractor peers in Branson, MO, from April 16th to 20th, 2023. Get all the details here: gotosummit.com . SUMMIT 2023 REACH FOR THE SUMMIT GAME IS BACK! The interactive Opening General Ses- sion that kicks off NCI’s High-Perfor- mance HVAC Summit 2023 will include a multimedia introduction, immediate- ly followed by an interactive game show called “ Reach for the Summit .” This game show begins with the NCI team picking two random contrac- tors from the audience to answer mul- tiple-choice questions from real-world installation, service scenarios, and more from the realm of High-Performance HVAC Contracting. Then, everyone in the audience has the opportunity to vote via the NCI Summit 2023 mobile app for the an- swer they think is correct. After the correct answer is announced and the point given, our ‘commentators’ David Richardson and David Holt (the “Davids”) will expand on why that an- swer is correct. The contractor contestants earn points for correct answers as they climb the Summit scoreboard. The winner who reaches the top will take home a new NSI 6000 Low-Level CO Monitor. A gift card will be given to the person who comes in second. Click gotosummit.com to learn more, take advantage of early bird discounts, and register today. NCI ANNOUNCES TWO NEW PARTNERSHIPS In December, National Comfort Insti- tute (NCI) announced a new partner- ship with Tru Tech Tools, Ltd . to provide tools and instruments to the HVAC and building performance industries. NCI CEO and President Dominick Guarino is pleased to announce two additional new tool and instrument partners: The Ener- gy Conser- vatory (TEC) and the Sauer- mann Group . As a result, TEC and Sauermann join Tru Tech Tools in the ranks of partners in the NCI Member Rewards Program and will join the NCI team in Branson, MO, as part of the High-Performance HVAC Summit 2023. As part of these partnerships, NCI no longer directly sells tools and instru- ments through its own website. Instead, they link to an NCI-branded page on the TruTech website at nclink.com/trutech and ncilink.com/Sauermann . TEC products will be sold directly from the TEC website, especially their Digital TrueFlow® Solution. Through its website, NCI will continue selling resale products and proprietary support materials, including CO moni- tors, duct saddles, clipboards, labels and tags, and brochures. They will also con- tinue to sell hats, shirts, mugs, and other NCI-branded products through their Swag Store . If you have any questions concern- ing this announcement or how the NCI Member Rewards Program works, be sure to call our Customer Care line at 800-633-7058. SUMMIT EARLY BIRD DEADLINE IS FAST APPROACHING Have you made plans to join the High-Performance HVAC family for Na- tional Comfort Institute’s (NCI) 21st An- nual Summit? If not, now is the time to do so. Our early bird registration dis- counts end on February 18th. Here is the breakdown for our early bird pricing: NCI has special registration pricing. If you bring three or more people, you qual- ify for the biggest discounts available. NCI Premium members get a free registration for the first attendee. A sec- ond registration saves you $100 off the standard member $645 price. If you bring three or more attendees, you qualify for our three-pack price which saves you an additional $50 ($495) per attendee. Again the deadline for registering to get these discounts is Feb, 18, 2023. NCI Learning Excellence members pay only $595 for the first attendee. A second attendee will only cost $545. If you bring three or more attendees you’ll pay only $495 each. This offer ends on Feb. 18, 2023. Regular NCI Members only pay $695 for the first attendee, $645 for the sec- ond attendee, and $595 each for three or more attendees. Non-Members only pay $895 for the first attendee, $745 for the second, and $695 each for three or more attendees. This pricing ends on February 18, 2023. So don’t wait. Time for discounts is running out. Join your fellow High-Perfor- NCI UPDATE FEBRUARY 2023 27HVACTODAY.COMHVAC SMART MART 28 FEBRUARY 2023HIGH-PERFORMANCE HVAC TODAYAD INDEX HIGH-PERFORMANCE HVAC TODAY TM Publisher Dominick Guarino Editor-in-Chief and Associate Publisher Mike Weil Art Director Judy Marquardt Online Development Director Brian Roseman Circulation Manager Andrea Begany-Garsed To Subscribe to High-Performance HVAC Today: ONLINE: Visit HVACToday.com/subscribe for a FREE digital subscription. PRINT: 1 year/$72; single copy $7. Canada: 1 year/$92; single copy $9. Payable in advance with U.S. funds. Prepaid subscriptions may be sent to: High-Performance HVAC Today, PO Box 147, Avon Lake, OH 44012. Phone: 440-949-1850; toll free 800-633-7058; or visit HVACToday.com/subscribe to order online. Go to ncilink.com/ContactMe with your comments and questions. FEBRUARY 2023 29HVACTODAY.COM Arzel Zoning Technology, Inc. | www.ArzelZoning.com ...................................................... 5 Baker Distributing Company | www.BakerDist.com ........................................................... 28 Duct Saddles | www.DuctSaddles.com ..................................................................................... 22 Evergreen Telemetry | www.EvergreenTelemetry.com ........................................................ 9 Goodman Manufacturing | www.GoodmanMfg.com ....................................................... 26 Lazco Corporation | www.Lazcocorp.com ............................................................................. 29 R.E. Michel Company | www.REMichel.com .......................................................................... 31 Sauermann | www.sauermanngroup.com ............................................................................ 25 TEC (The Energy Conservatory) | www.energyconservatory.com ............................... 22 The New Flat Rate | www.TheNewFlatRate.com ................................................................ 28 To Your Success | www.ToYourSuccess.com .......................................................................... 28 Tru Tech Tools | www.TruTechTools.com ...................................................................................14 Advertiser IndexAdvertiser IndexNext >