Challenges in the HVAC industry and how to overcome them

The world will always need heating, ventilation, and air conditioning, making the HVAC industry an essential sector. With rising temperatures and unpredictable climate conditions, HVAC services are becoming increasingly critical. The U.S. market is projected to expand at a compound annual growth rate (CAGR) of more than 5% from 2020 to 2025. The industry is expected to see tremendous growth due to the growing number of connected home devices, increased construction, and other factors. 

However, the HVAC industry faces many challenges. Technology has made heating and cooling units smaller, smarter, and more efficient. The industry may also be facing a shortage of skilled workers. 

Keeping on top of these challenges will help you survive in an industry currently in a state of flux. Here's what to look out for and how to run an HVAC business in these challenging times. 

Competition in the HVAC Industry 

Of course, competition isn't new in the HVAC industry, but it is likely to increase. There are a lot of HVAC companies and service providers out there. This is great if you are a consumer since competition can help lower prices, but not so much for HVAC businesses looking for ways to survive. 

According to IBISWorld, no HVAC company has a dominant share of the market since no single business can claim more than 5% of total industry revenue. Most HVAC companies are small businesses—63% have four employees or fewer. These smaller companies tend to be regional or specialise in specific kinds of HVAC systems. 

With fierce competition between small local companies and national chains, you may be tempted to differentiate your company on price in order to win business. This may not be the most advantageous long-term strategy. Companies that bid too low often end up scrimping on labour and materials and not being able to get the work done right or not being able to get it done at a profit. They damage their reputation and may lose customers. 

A better strategy would be to differentiate your company by providing a high level of service. This would allow you to build a loyal customer base that will not only continue to give you their business but also refer you to their family, friends, and neighbours. This means meeting their expectations and going above and beyond to ensure they have the best customer experience possible. 

Communication and Customer Satisfaction 

You know how something always seems to go wrong at the worst possible moment? In the HVAC industry, there's never a good moment for your customer's heating or air conditioning system to fail. They are already irritated, impatient, and dissatisfied when they make that first phone call. These days, customers demand immediate action, and in the crowded HVAC field, they will easily turn to someone else if they feel that you can't or won't accommodate them right away. 

This means the speed and efficiency of your operations can make or break your business. Communicating with your fleet using the latest HVAC fleet tracking technology and putting your customer at the centre of your business will help keep you alive in a competitive market. Just as technology has changed many things about HVAC products, it has also changed business processes such as dispatching, invoicing, and technical support. 

New software and apps do more than make things easy and seamless. They also give you the tools to improve efficiency in ways that lead to greater customer satisfaction. Optimising your routes and scheduling can make a significant impact on your business. Poor communication, late arrivals, and no-shows due to scheduling snafus can lose you customers. A great way to improve scheduling, routing, and communication is HVAC telematics software. 

Accurate information about what is happening in real time can be obtained, and data can be reviewed in reports for use in making decisions. You can plan the best, most efficient routes so that your technicians arrive as scheduled. You can also change their routes in real time, sending the closest technician to an emergency call and quickly rerouting the others to maintain your schedule. If you haven't implemented software to help you automate scheduling, dispatching, and other tasks, now is the time to consider it. 

The HVAC industry urgently needs to build trust in addition to quick response times. Your ability to communicate honestly and clearly with your customers may set you apart. You can build trust by offering fair and accurate pricing, being transparent in operations, and making customers feel valued. 

For example, validating advice to replace an ageing and inefficient heating system with a record showing how the improvement has saved money on the energy bill builds trust. Creating a company culture that focuses on customer satisfaction as the ultimate objective also helps. Keep in mind that customer satisfaction equals customer retention. 

Cost Challenges in the HVAC Industry 

One of the biggest HVAC industry challenges is the cost of doing business. It takes an investment of anywhere from £2K to £10K just to get up and running. Costs include: 

• Fleet of vehicles 
• Specialised equipment 
• Skilled technicians 
• Insurance 
• Marketing 

HVAC fleet telematics solutions can help businesses manage and automate processes such as: 

• Vehicle maintenance schedules (and costs) 
• Vehicle security and driver safety 
• Real-time field technician scheduling (and customer service) 
• Fuel consumption and emissions 

Telematics data can show you how to reduce your fleet's fuel consumption, reduce aggressive driving, and more. In some instances, insurance companies will give you a discount if you are using telematics, so you not only reduce the number of accidents but may also be able to reduce your insurance premiums. 

Fuel takes a big chunk out of your budget, but fuel prices are beyond your control. They often rise and fall unpredictably and can kill your projected budget. With a telematics solution [HYPERLINK NEEDED], your technicians' fuel consumption can be in your control. You can get insight into your technicians' driving behaviour and give them the coaching they need to improve. Better driving often equals lower fuel consumption, which can improve your fuel costs. 

HVAC Workforce Shortages 

Like many industries, HVAC faces challenges related to the lack of skilled labour. The underlying reason for this is unclear. Are more high school students pursuing higher education? Is HVAC work less attractive than other trades? 

Regardless of the reason for the current workforce shortages, they may only get worse. Fewer young people are pursuing the trades as older technicians are retiring or otherwise leaving the workforce. This is bad news for customer satisfaction. If you don't have enough employees to get to all your customers or answer an emergency call, they'll find someone else who can. 

You can do a couple of things to combat this challenge in the HVAC industry. There is often a poaching culture in this industry. Reliable, experienced technicians are hard to find, and competitors often snatch valuable employees from each other. Offering incremental pay raises as well as attractive benefits such as sick time, PTO, and health insurance can attract potential employees and incentivise them to stay. Building a sustainable recruiting system for hiring and retaining talented employees and reliable employees will help keep workforce challenges to a minimum. 

Fluctuating Busy Periods 

Sure, your phone seems to never stop ringing when it's steaming hot or freezing cold. When the weather is at its most extreme, your business will be going like gangbusters. These are the times when your customers' HVAC systems are stressed to their maximum capacity, so they often show their limitations or break down completely. Other times, business may slow to a crawl as you wait hours between calls. 

Slow business means low earnings, but a flurry of calls doesn't always mean a huge revenue increase. If you can't manage a deluge of service calls, you may end up losing customers and income due to inefficiency. 

A solution is to use telematics software to optimise scheduling and dispatching. This can help boost productivity, improve efficiencies during peak times, and develop a backup plan for slow times. 

If you are not doing this already, start tracking the number of potential client calls you get every day. Track the type of queries you get, such as routine maintenance and emergencies. Over time, you can see trends and gain valuable insight that you can use to plan for the natural shifts in your work. 

Keeping Up with New Technologies 

There is so much happening in the HVAC industry that it can be hard to keep up. However, not keeping up can be detrimental to your business. 

New HVAC technology will most likely focus on renewable energy and system efficiency. Staying current with technologies such as smart thermostats and green technologies will help you remain competitive. Products such as geothermal heat pumps have been growing in popularity. Unless you are familiar with these products and can clearly outline their pros and cons, your customers may decide to find an HVAC company that knows more about these new technologies. 

Keep an eye on future developments and political policies that may cause challenges for the HVAC industry. This will give you a reputation as a true professional who knows the latest developments in the industry. 

More Benefits of Fleet Management and Tracking for the HVAC Industry 

Another way to keep up with new technologies is to use the latest fleet management telematics. You can turn HVAC industry challenges into opportunities to stay competitive. 

Keep Better Track of Your Fleet 

When your technicians are out on the road, no news isn't always good news. You hope everything is going smoothly, but you know that isn't always the case. Your techs may encounter unexpected road construction, heavy traffic, or even an accident that brings traffic to a standstill. While you may hope for an uneventful day, you have to plan for unexpected fleet delays. 

HVAC fleet management tracking can help you better monitor your fleet. When there is trouble, you can notify them and send them an alternate route or a different technician to the job. With two-way messaging and GPS tracking data, you can overcome challenges and provide a better customer experience. 

Track Driving Habits and Improve Safety 

While aggressive driving behaviour can use excess fuel and cost you money, it is also dangerous. Most crashes and accidents are caused by driver errors. If your drivers exhibit aggressive driving behaviour, it can cost you money in excess fuel use, raised insurance premiums, traffic fines, and damage to your vehicles. It is also bad for your business since it puts other people at risk and can affect your reputation. 

These risks and expenses can be avoided with real-time alerts from a telematics system. A visual or audio alert can let your technicians know when they are speeding, for instance, and give them the opportunity to change their behaviour. You can also get all your driver information in a report that you can use to develop a safety incentive programme that helps them learn better driving behaviours. 

You can assign scores and rank your drivers based on tracked events such as speeding, harsh braking, acceleration, and excessive idling. Implement a gamification system that, with the help of a driver-focused app, allows technicians to see their scores and how they rank compared to fellow technicians. This system can incentivize drivers to improve. When they can see their results on a leaderboard, it puts their actions into context and makes the consequences feel more significant. 

Schedule Vehicles for Preventive Maintenance 

There's nothing worse than an unexpected vehicle breakdown. It costs you time, money, and, in the long run, the customer. Scheduling preventive maintenance can help reduce unexpected breakdowns that affect your business. 

With regularly scheduled, proactive maintenance, you get benefits such as: 

• Save money—it costs less to keep your vehicles running well than it does to repair them after they break down. They'll use less fuel, and you won't have additional damage caused by excess wear and tear on parts. 
• Reduces risks—they are less likely to break down and cause accidents that could harm your technicians and others. 
• Decrease downtime—scheduling preventive maintenance doesn't affect your technician's performance. You can schedule it when it is convenient for your business or plan around the scheduled downtime. 
• Gives vehicles a professional look—as a visual representation of your business, your vehicles need to look neat and work well to make a professional impression on your customers. 
• Prevents future issues—with regular maintenance, you can discover minor problems before becoming bigger issues. 

A telematics solution lets you set up mileage—or time-based maintenance alerts to schedule maintenance at times that don't affect the operation of your HVAC business. A telematics device hooked up to your fleet vehicles' engines can also notify you about emerging problems and address them promptly. 

Keep Track of Driver Hours and Payroll 

Telematics solutions can help you monitor and manage your drivers' hours and logs. This helps you better manage overtime, payroll, and resource utilisation. 

Reduce Overtime 

You can reduce overtime significantly with a telematics system by monitoring their driver logs electronically and allocating your resources based on data-driven insights. For instance, if you have a customer who needs a last-minute service towards the end of the day, you can choose who to send based on the hours they have worked and their location. This keeps you from sending someone who is too far away from the customer's location or too close to working their maximum hours. You prevent fuel wastage and overtime hours, and your driver will get to your customers on time. 

Improve Payroll Accuracy 

Unfortunately, timesheet fraud happens, and technicians may get paid for work they haven't done or for time spent on activities that are not work-related. This occurs when drivers record more hours than they worked, retroactively edit driving hours, and log regular hours as overtime. Not only does this cost you money, but it can also end up with customers being incorrectly billed. This can be avoided by replacing paper logs with a telematics solution that generates reports on start and finish times, average hours, hours and days worked, and more. 

Better Asset Utilisation 

You can also use information about driving hours to improve the efficiency of your business operations. By reviewing arrival and departure times, travel time to jobs, stop duration, and the time a technician is inactive. 

This data indicates whether jobs are completed in a reasonable timeframe, if there are delays in reaching jobs, whether detours were taken for personal reasons or due to the technician getting lost, and if drivers are not utilized while having available hours. 

If you are looking for ways to overcome current and future challenges in the HVAC industry, telematics is a practical option.