Market up...employment down...your earnings??

As the title states, that modus operandi seems to be the rule of thumb right now. So while your 401(k) - or at least what's left of it - is rebounding nicely now, it's unfortunately happening because companies are realizing profits while revenues are sliding. And that can only happen when costs are dropping lower than those aforementioned revenues. To accomplish that trick (and not have former accountants working on the payroll who are using math formulas that no one has ever heard of), you generally have to reduce services and/or employees. Rick Newman has some interesting and very good insight into these current trends on one of his recent money-management articles on U.S. News & World Report.

What does this mean for today's HVACR service professional? Well, I don't have to tell you that the market is considerably tougher today than it was a few years ago. Convincing a homeowner to put in a high-efficiency heat pump or a building owner to replace their current system with a new ductless mini-split setup is no easy sell these days. But there still are opportunities out there. And from the people I've been talking to in the trade, there is revenue to be had - if you and your company can be nimble on your feet to grab it.

• Get online. If you (or your boss' company) don't have a presence on the Web, get one. Consumers are using the Internet more than ever to review purchase options, gather information and make intelligent buys. This is increasingly apparent when they are purchasing "big ticket" items such as HD televisions, appliances and - yes - heating and air-conditioning equipment. If you don't have a presence on the Web and your competitor does, who is getting more visibility?
• Offer options. Money is tight. We all know this. But if you give your customers' choices on how they can pay (credit, installment payments, options based on tax rebates earned), and supply options on what kind of work should vs. could be performed, you can increase your bottom line.
• Know the rebates. There are a myriad of tax rebates and incentives out there for consumers to purchase more energy-efficient systems. In addition to Federal programs, most states - and even some municipalities and utility companies - have additional dollars available to hand back to consumers if they upgrade or make changes. Do you know what programs are available in your service area? Can you or your technicians communicate these effectively to you customers? Doing so could mean the difference between making a sale or upgrading a customer, or walking away with nothing at all. To find out more about what programs are available for customers in your area, check out the Energy Star rebate information page. There is a lot of useful information to be had there.

Got a service idea or way to help take the question marks from behind your earnings? I'd love to hear them! Feel free to leave a comment, or send me an e-mail over at the RSES Journal. The more we can share in this forum, the more we all can work to make more positive things happen in 2010.

Customer honesty...or else

For today's small business owner (which would include many of those contractors out there in the HVACR world), it's tough sledding right now. While we've heard over and over about how the recession is ending, the stock market is recovering, etc., the reality is that the market recovery on Wall Street isn't helping those on Main Street find new customers. The overwhelming perception right now is that consumers continue to hunker down, save and conserve. Businesses, too, are finding that while there is work out there, things certainly are the same way they were in the free-spending, no-limit-to-credit days of 2007 (Chicago Tribune columnist Greg Burns has some great thoughts on this in one of his recent columns.)

All the more reason why it is so vital to RETAIN your customer base. We've all heard how easy it is to lose a customer, as well as how great repeat customers are to your word-of-mouth advertising base (still one of the best ways to promote your business!). But just as important, from a business perspective, is honesty and integrity with your customers. Because once you lose your credibility with them, you aren't getting it back.

This brings me to the point of my random diatribe here today. The last two months, I've received some obscenely high electric bills from ComEd. For those of you not fortunate enough to live in Chicago and privy to monopoly that ComEd has on its customers, they supply us with energy. And in my rehabbed condo building, the access to read those ComEd meters is in the basement, which unfortunately remains locked. So when they come to read the meter, they need someone to open it. This, in and of itself, is not a problem.

The problem arises when I called today to find out that the reason for my high bills is that ComEd ESTIMATES owner usage when they can't access the building (I'm still trying to figure out how they got the numbers they did for estimates, when my previous bills were so low, but that's a topic for a whole different day). Unfortunately, no one from ComEd has contacted me or explained that to me. And to say that I was irate when I opened my bill would be an understatement. Especially when I called someone last month, and the answer I got then from customer service was "You must have had your air-conditioner on a lot. That explains the high usage rate."

So what does all this mean? Simply put, be honest and upfront with your customers. If you are going to have to perform work that is going to exceed an estimate, or reach beyond the scope of what was originally proposed, explain why. The customer might not like hearing the TOTAL, but they will appreciate your honesty and why you are reviewing it with them. And instead of having an upset customer who is ready to jump ship and head to another contractor, you may have just added someone one who will not only specify that high-SEER unit, but also sign on for the three-year service agreement you've offered.

Now as for ComEd......

A Change in Climate

Today, for those of you who are unaware (and I'm sure many are...heck, I was until I heard about this a couple days ago!), is Blog Action Day. Around the world, 1,000's of my fellow journalists, literary hacks - and those who just want to share an opinion - are doing so on one particular topic: climate change.

This certainly is an area that the HVACR arena is very, VERY familar with. The Montreal Protocol, Clean Air Act and other pieces of legislation impact the way our industry does business everyday. The focus on reducing ODP-causing refrigerants is the driving force behind the elimination of HCFCs (hydrochlorfluorocarbons) from HVACR equipment. This will begin in earnest in 2010 when new HVACR equipment can no longer be shipped with an HCFC in the unit. After Jan. 1, equipment manufacturers will have to use hydroflurocarbons (HFCs) such as R-410A or other alternative refrigerants. R-410A is poised right now to serve as the dominant replacement. We've been talking a lot about it on the pages of the RSES Journal and even put up a microsite to discuss the topic and share information with the industry on our Web site. Feel free to click here to find out more about it.

That phaseout of HCFCs - namely the refrigerant R-22, which has been an industry stalwart for decades - has drawn opinions from throughout the industry. And since the U.S. EPA still hasn't formulated final rules for how the implemenation of the phaseout will continue, there is a lot of apprhension and uncertainty in the industry. For more on the EPA's overview of the situation and the proposed rules, just click here.

These rules will certainly impact the legislation and debates going on in Washington, D.C. right now. And almost any bill relating to energy efficiency is sure to see some elements of refrigerant-regulation/taxation/cap-and-trade come in to play. The question will be how much of each of these elements will find their way into any bill that goes before the President.

Again, this is why it is so important to stay on top of these issues. Read relevant publications that are offering information and insight into what is going on. And most importantly, SHARE YOUR OPINIONS WITH YOUR ELECTED OFFICIALS. They can't know how you feel if you don't tell them. We live in the greatest country on Earth, and a big reason for that is because people's opinions do matter. Make sure you make yours count and be heard!

The World of Regulation

Many of us out there are familiar with regulation. Indeed, we encounter it daily, whether that's in the form of sales tax, parking tickets, or figuring out why even though we didn't turn our gas stove on for an entire month, there still are "usage fees" and "subsidy taxes" on our bill that we end up paying.

Still, in the realm of HVACR, we've been pretty blessed. The regulatory gods out there have for the most part, until the last few years, left us alone. Apparently, they figured they were missing out on something, because they've awoken with a vengence now.

Regionalized efficiency standards are something that we have been dealing with in our industry for the last few years. Some cities have even tried to place particular standards in place, Albuquerque, NM, being the most pronounced about it lately. Now there is a new agreement in place, signed by some of the leading manufacturers of HVACR equipment and organizations such as AHRI and other energy-efficiency promoting organizations, designed to establish regionalized efficiency standards for central air conditioners and gas furnaces. Several organizations that have signed this agreement have offered information on it, including the American Council for an Energy Efficient Economy. The goal is to make sure that the most efficient equipment is installed in each region. In theory it makes a lot of sense. You'd think that contractors and installers would already be making sure that such steps were taking place.

Unfortunately, however, that isn't always the case. Other organizations such as ACCA and HARDI have released statements stating they couldn't sign the agreement. They needed to get more input from members, and were concerned about what all this regulation could mean in the future. HARDI did note in its statement that it felt the organizations involved did have the best interest of the industry at heart. I'd have to agree with this. Unfortunately, as is often the case when it comes to legislation, agreements and regulatory issues, everyone has different opinions of what is best. It's that whole agreement thing that makes it tough.

No one is sure what this agreement will mean for future developments. And as we all know, regulations and stipulations usually take time to get sorted out (we're STILL waiting on the EPA's final decision regarding its proposed rules...I know manufacturers are thrilled about this). But one thing IS certain. Everyone in the industry must keep a watchful eye on what is going on out there, both in Washington, D.C., and their own backyard. At this rate, what might be legal when you get up in the morning and get in your truck might get you fined before you head home at the end of the day.

Getting Started

I've made forays into the world of blogging or, as my dad will sometimes say, "telling everyone else in the world what I'm doing all the time." That isn't the point of this endeavor though. Instead, I'd like to take the time to start sharing with you news from RSES (that would be the Refrigeration Service Engineers Society for those of you not familar with the world of HVACR), as well as some of the new things that we have on tap for its flagship publication, the RSES Journal (which I happen to be Publisher/Editor-in-Chief of).

In the next few months, we're going to be introducing a lot of new changes to our Web site, launching an electronic newsletter, and seeking out other ways to connect with our Membership and readers of the magazine. In addition, we're also looking to interact more directly with the HVACR community at large. I'm hoping that some of our new programs spark interest, intrigue and hopefully some commentary from throughout the trade.

In the meantime, I'm planning on updating this a couple times a week. Right now we're in the midst of pushing out our November issue and planning for the RSES 2009 Annual Conference in Minneapolis, taking place Oct. 27-31. The conference theme, "Lean & Green," is focused on green technology and ways that contractors/technicians can work to save customers money (while hopefully adding some to their pockets as well!). I hope that some of you out there can join us!

In the meantime, keep checking back for updates on what's new in the HVACR world...in this constantly changing and increasingly regulated environment, there is something new almost every day.

Cheers!