You and your competition are more alike than you think.
On the surface, you offer the same thing. But the connections run deeper than that. You’re the same because you likely experience the same pain points and problems every day – and no matter what you do, the jobs never seem to get any easier.
Here’s one issue almost every HVAC owner deals with: working harder to keep afloat.
In this industry, complacency doesn’t pay off. You must work hard just to maintain success. News flash: the average HVAC company loses 15-25% of its customer base every year.
Read that again: almost a quarter of your customer base won’t be back with you next year. One in every four jobs will be a one-time knockoff. All that effort to secure a new customer, all for one single transaction.
That said, there is a silver lining: the loss of these customers comes mostly through drift, not defection. They’re not mad at you; they just don’t remember who you are. You didn’t do anything wrong; they just forgot you exist.
How, exactly, can that be a silver lining? Simple: because you can fix it.
The Leaky Bucket and Transaction-Based HVAC Business
Your customer base is like a bucket. New customers go to the top, while previous customers – particularly those from years past – leak down to and out the bottom.
Cody Compton, Regional Account Manager for Comfort Connect, says that the main reason for this might seem obvious: new system installations pay the bills. But there’s more to it than that.
“Homeowner education is a huge reason why we see leaks in the proverbial bucket. Once that new system is installed, they suddenly have this assumption that they won’t need a dedicated HVAC contractor for at least a few years, so when the time does eventually come for necessary repairs, they find themselves back out on the open market searching for the best deal.”
That search often leads them to the least expensive option. With the sheer number of contractors located in any given area constantly competing on price, it’s no wonder why so many previous customers leak away after an initial job.
When there’s no loyalty or contractual attachments, it’s easy for everyone to forget about each other (or even to spend far too many marketing dollars trying to keep those customers with little success). If the customer does, in fact, move on, you can’t be there to solve their future problems because you won’t know whether there’s a problem to begin with.
This is what happens in a break-fix environment, one that focuses on transactions alone. And in a transaction-based HVAC business, the bucket never stops leaking. It happens every season, all the time.
It’s not always your fault, either. You might already be working to swing the pendulum back in your favor, only to feel stuck on a marketing treadmill not unlike your competition. This is merely part of an ongoing survival strategy that makes you feel comfortable. It might get your employees paid, but it won’t help your company grow.
Want to learn more about how to break free of this survival strategy? Download our free ebook →
Customer Acquisition vs. The Cost of Retention
Every year, you spend money and time bringing in new leads. Have you ever considered just how much this actually costs the business?
On average, the cost of acquiring a single new customer in the home-services industry is anywhere between $200-400. This means that just three new jobs in a single day can cost you over a thousand dollars. Why? Because you’re competing for every single job. You’re chasing leads and paying companies for good advertising. It’s expensive and exhausting.
What if these “new” customers were already loyal homeowners? The math on that is easy.
Get HVAC Customers to Call You Back
By now, you understand the value of retaining a customer. What HVAC contractors don’t always understand is how to do it (otherwise, this wouldn’t be a conversation).
Sometimes, people are simply reluctant to change. They’re used to the ever-increasing speed of the treadmill, and they care more about today’s cash flow than building the business for future success.
These are the companies that will fail in time. They are racing one another toward the bottom of that bucket, and it’s a race nobody wins.
But for every business owner adverse to change, there is another who is eager to adapt. They want to build strong relationships. They want to get off the treadmill. They want their revenue costs to decrease while working with more predictability. They just don’t know how to do it – yet.
Sooner or later, you’ll have to choose who you are: the former, or the latter.
A shift is coming. That shift is similar to what Reed Hastings, co-founder of Netflix, experienced in the early 2000s when seeking to fix the friction that came with home entertainment services. In his world, the solution was mail-in video rentals with no late fees, and later at-home streaming services.
In ours, it’s Home Comfort-as-a-Service.
This is how you stop chasing leads. This is how you get customers to call you back for their next upgrade or service. This is your fix for the leaky bucket. And now’s the time to make a change.
If this topic hits home, you’re ready for the solution.
Download our free Ebook — What Netflix Understood About Customers That HVAC Still Doesn’t —
and learn how to stop the leak for good,
or visit our Premier Program page to find out how our HCaaS solutions can
help you move into a modern era of contracting.
