Are you interested in a
piece of a $3.2 billion pie? Estimates from industry sources
place the potential size of the commercial national accounts
market in North America at anywhere from $1.8 to $3.2 billion.
In an effort to streamline operations and improve efficiency,
a growing number of large companies are looking to consolidate
their purchasing activities. For the HVAC industry, this means
more multi-location accounts are turning to a single HVAC provider
to handle all of their facilities regionally or nationally.
For the national account customer looking to single-source its
HVAC needs, the benefits include less paperwork, one point of
contact, standardization of services and procedures, closer
working relationships, cost savings, and increased consistency.
In the past, the majority of national accounts were primarily
retail-type businesses. Although many retailers still purchase
HVAC services nationally, they are no longer alone. Many other
industries, including technology companies, banks, and property
management firms are looking for HVAC contractors to handle
large regions—or even the entire country—for them.
What are these national account customers looking for? Increasingly,
they want more than just performance or maintenance and service
work. They’re looking for maintenance information, and
equipment service tracking. They want predictive maintenance
so they can plan for repairs and upgrades far in advance. In
short, they want their HVAC provider to become their HVAC consultant.
As a consultant, the HVAC contractor has the responsibility
to inform and educate national buyers. The contractor must quantify
and demonstrate the value of performing proper preventive maintenance,
planned equipment replacement programs, and life cycle cost
analyses.
Start With What You Know
Many contractors avoid getting involved with national work because
it seems like unfamiliar territory. Actually, performing HVAC
maintenance and service nationally is not all that different
from performing it locally. It involves most of the same activities
that we all do on a local level: performing preventive maintenance
inspections, responding to emergencies, scheduling invoicing,
and collecting.
Our involvement with national service began in earnest about
15 years ago with a telecommunications company. The company,
a prospect at the time, had requested that we propose a maintenance
agreement for several locations in the area. The prospect then
decided to entertain proposals for all of its 75 locations across
the country. Although we had no experience managing an account
nationally, we nevertheless decided to give it a shot.
We were successful at selling the agreement, and began putting
together a network of contractors to deliver the work, starting
with the contractors in our ACCA Management Information Exchange
(MIX) group. Our national accounts division has grown from that
one account sold 15 years ago into a separate profit center
in our company with several million dollars in annual sales.
We started with what we knew (how to estimate and sell maintenance
agreements), and with who we knew (the prospect that we were
pursuing and contractors from our MIX group in other parts of
the country). We figured the rest out as we went along.
Feel Their Pain
When talking to a national account prospect, find out the key
problems and challenges they’ve experienced in managing
the maintenance for multiple locations. This involves asking
many questions, and often probing beyond initial responses to
find the real issues. Not every prospect has the same issues,
but every prospect has pain—you just need to find it.
Remember, not every multi-location national account is going
to be a good prospect for the quality HVAC contractor. In fact,
many of these companies are just not willing to listen to the
kind of recommendations that quality-driven HVAC contractors
bring to the table. Sometimes this is due to their focus on
short-term cost cutting. Sometimes they lease their facilities
instead of own them, decreasing what they have invested in the
long –term life of the HVAC equipment. Whatever the case
may be, determine if you and the customer have a good “fit”
as early in the dialog as possible, and walk away if it isn’t
right.
You also may find that you must battle the “fix it when
it breaks” syndrome. Many customers don’t understand
or appreciate the value of a predictive and preventive maintenance
program.
As HVAC contractors, this situation is our fault. We haven’t
adequately quantified and demonstrated the return on investment
of proper maintenance. Therefore, our customers don’t
view it as an investment, but as a cost. They believe that by
not paying that cost, they’ll save money. Nothing is further
from the truth, but we need to demonstrate this fact.
We should first demonstrate how performing proper preventive
maintenance on a rooftop unit versus performing minimum maintenance
can extend the life of that equipment from, for example, 12
to 17 years. Then we can translate the appropriate cost of this
increased life into annual dollars that the customer can see.
Do this, and the customer will see the light regarding the importance
of preventive maintenance.
Closely Examine Pricing and Delivery
When pricing a multi-location preventive maintenance agreement
to a regional or national account, be sure to consider the costs
of administration and coordination. As the HVAC contractor responsible
for maintaining and servicing dozens of hundreds of locations
around the country, you’ll have additional cost to coordinate
the work, receive and dispatch service calls, schedule inspections,
invoice the customer, coordinate with partners and subcontractors,
etc.
Your pricing must go beyond the direct costs of preventive maintenance
inspection hours, filters, etc., and include some realistic
and informed estimate of these additional administrative costs.
Failure to do this will amount to giving away your services.
The net effect will be that what appeared to be a profitable
maintenance agreement on the surface actually will be costing
you more money than what you’re charging.
The delivery mechanism for your services is also critical. It’s
one thing to sell a national HVAC maintenance agreement, and
another to properly execute the work.
Many brokers simply subcontract the maintenance and service.
They search the Yellow Pages, find 20 HVAC contractors in a
given area, then sign up the one with the lowest labor rates.
This is fine if you want a short-term relationship with both
the customer and the subcontractor.
There’s a better approach: partner with like-minded, quality-driven
contractors. In our case, the delivery mechanism is The Unified
Group, a national alliance of independent contractors with similar
capabilities and a common commitment to quality.
Whatever the delivery mechanism, it’s important to standardize
procedures and services as much as possible and provide a uniform
level of quality. National accounts customers want all of their
locations to receive the same level of service. It’s also
important to you, as prime HVAC contractor, to facilitate the
coordination of a successful HVAC maintenance agreement on a
national basis.
Our involvement with The Unified Group has been instrumental
to our ability to provide consistent, quality service on a national
basis. As members of The Unified Group, we attend training sessions
on a quarterly basis, which ensures that we’re all on
the same page.
We’ve developed standardization of tasking and created
a code of conduct for national work, which spells out the practices
and performance standards we all have agreed to adhere to. Strong
bonds have developed among us, so that as members of The Unified
Group, we can truly work as partners to provide solutions for
our customers.
If you don’t have national contacts through an association
such as The Unified Group or an ACCA MIX Group, your road may
be more difficult. The goal, however, is the same: serving a
national client base with the same consistent service you provide
on a local level.
Remember, the bigger the potential reward, the bigger the risk.
The opportunities in the commercial national accounts market
are huge, but so are the pitfalls. Look before you leap.
|
