Maintenance: Full Stack HVAC

Written by Ben Reed

August 9, 2023

Data-Driven Profits, Efficiency & Best Practices

The Full Stack HVAC Approach

This is part 2 of 2 of our Open Letter on Residential HVAC Maintenance Programs. Read Part 1 here.

tl;dr: 

  • Digital technology has finally crossed the value/performance threshold which enables HVAC contractors of every size to seamlessly adopt best practices and increase profits
  • To stay competitive and offer profitable maintenance plans, you need to deploy a full “stack” of digital solutions within your company
  • It’s recommended that you update your business structure – breaking out “maintenance” apart from installation and service work
  • Get your ass kicked by a coach if you want to adopt change and get to the next level

Fixing Our leaky Bucket

In our last article, we challenged the assumptions which built our maintenance programs, revealing why they may be creating negative value for your business. Now, let’s explore the journey you must embark upon to create a data-driven, efficient maintenance program (and also a profitable HVAC service business).

The Power of Commissioning And Benchmarking

Commissioning is a common practice in the commercial building industry, but hasn’t been common in the residential HVAC industry. This was because HVAC equipment was traditionally simpler and less sensitive to improper installation. That is no longer the case:

We’ve crossed the threshold where our risk of equipment failure is too high and the commissioning technology is easy enough for anyone to use, resulting in increased profits & efficiency that HVAC businesses can no longer ignore.

Modern technology has made commissioning and benchmarking more accessible and efficient than ever before. Our team has spent years building the commissioning solution for residential HVAC systems – complete with real-time diagnostics, end-to-end system benchmarking, just-in-time education, CRM Integrations, and 24/7 monitoring integrations.

By ensuring that systems are properly installed and optimized from the outset, the likelihood of issues arising that require reactive maintenance is significantly reduced. This saves time and resources, and it also enhances customer satisfaction.

These advancements are not only streamlining processes but also opening up new opportunities for HVAC companies to enhance their services and increase their profitability. PNNL’s recent STEP Campaign has some pretty compelling case studies that prove how important commissioning is for residential systems.

The Shift Towards 24/7 Monitoring

The HVAC industry is transitioning from reactive to proactive maintenance, powered by 24/7 remote monitoring. This shift, facilitated by advancements in wireless technologies, sensors, and low-powered monitoring devices, allows HVAC companies to identify and address issues before they escalate, enhancing customer retention and satisfaction. Today’s IoT HVAC monitoring technologies, available in various forms and communication modes, claim to be affordable and user-friendly, making them a viable addition to maintenance programs and a game-changer in residential HVAC maintenance.

Today, there are dozens of professional remote management platforms available for you to offer to homeowners. Your business could try out products like Alert Labs, Keen Home, Sensi Predict, Ecoer, Aviexx, manufacturer specific solutions, or even leverage popular smart thermostats to create ad-hoc monitoring platforms. 

Each of these solutions have potential, but in our testing we’ve found that many fail to deliver adequate value to both the contractor and homeowner. They can prove difficult to deploy, difficult to keep connected to the internet, and difficult to derive value from the raw data. The risk does not always outweigh the reward, thus HVAC monitoring systems have not become commonplace as of yet.

We’ve polled hundreds of contractors about why they wanted to offer a remote monitoring solution, and the #1 reason that always came back was as follows: “achieve a better relationship with our customers”. The technical features are secondary – and can often be a liability – if the solution does increase customer engagement. 

Each option on the market has its pros & cons, but the best all-round solution is SmartAC.com – a leads-first platform with a rock-solid, friction-free hardware bundle. Earlier this year, we made a video series diving deep into the platform and value props to the business. 

But does SmartAC.com really stand up to the hype?

Smart Maintenance

Behind the curtain

SmartAC.com Sensor Placements

It’s the simplicity – not complexity – of the solution which revolutionizes the way HVAC systems are maintained. It uses just three sensors and a hub, all covered by a lifetime warranty, to monitor various parameters of your HVAC system and deliver insights to both the professional and homeowner. These insights and parameters include supply air temperature, pressure issues, filter pressure change, water in the drain pan, runtime by mode, envelope performance, high humidity, refrigerant leaks, and coil freezing, among others.

The technology is designed to auto-detect each individual cycle and provide information on the cycle type, cycle time, individual performance, trend performance, and performance relative to changing conditions (outside air). This data-driven approach allows for proactive maintenance, ensuring that issues are identified and addressed before they escalate into more significant problems. And the best thing about it? The system does all of the data interpretation for you – You just need to respond to alerts and pick which of the high-quality, data driven leads, already qualified and prioritized. 😎

In the Lab

At measureQuick, we always need to see the results of three separate test initiatives before we promote a solution: measureQuick lab testing, Jim’s home testing, and 3rd party lab testing. SmartAC.com has been put through that gauntlet and has passed with flying colors. We first started testing SmartAC.com in the office and at Jim’s home over a year ago and have been impressed with the performance and insights that are provided. 

In 2021, Constellation Home (formerly BGE HOME) hosted SmartAC.com out of a combined interest to test the product in their own facilities as well as get more familiar with the product prior to rolling it out to their customers. This pitted SmartAC.com’s wireless sensors against pro-grade instruments to validate if the measurements would track each other, and to review the diagnostics discovered. You can flip through the slide gallery below to see the testing results, which were as follows: 

  • Sensors were able to accurately detect temperatures and filter pressure.
  • Algorithms were able to detect system cycles and operation.
  • Alert logic successfully recognized trouble signs for common problems often encountered, providing actionable service opportunities for BGE.

Next, SmartAC.com pursued testing with Intertek – long regarded as the premier testing and certification laboratory for HVAC equipment. Equipment manufacturers use Intertek to certify equipment performance and safety. SmartAC.com chose to partner with Intertek for two solid weeks of testing to a) validate every aspect of data and measurement accuracy, and b) test common failure and issue scenarios in a fully-controlled laboratory environment where both temperature and humidity could be specified and controlled.  Data was gathered, analyzed, and compared by an objective 3rd party, proving SmartAC.com accuracy and reliability.

Intertek Testing

The ROI of Smart Maintenance 

SmartAC.com’s solution offers significant benefits to both HVAC contractors and homeowners. For contractors, it allows for efficient management of homes – often tripling maintenance plan take rates – and differentiates their brand, eliminates no-fee calls, and enhances sales. Homeowners gain the ability to schedule service, receive special offers, monitor system performance, reduce breakdown risk, detect leaks, replace filters based on data, and chat live with technicians.

Testimonials from HVAC professionals praise SmartAC.com for its easy installation, peace of mind, and early problem detection. Its effectiveness was demonstrated during Colorado’s December 2022 arctic blast, where it enabled proactive monitoring of heating systems, preventing malfunctions and ensuring customer comfort.

SmartAC.com sells their monitoring platform to contractors as a subscription (no hardware costs), where one kit monitors one HVAC system. Priced at $10 per kit per month, it allows a company to launch a new tier of maintenance change their maintenance model by offering plans with lower overhead, higher customer satisfaction, and higher ROI. The kit includes a co-branded app, sales collateral, setup and training, dashboard access, ongoing support, tech chat, and a web dashboard for automated lead management.

Improving Upon Our #betterhvac Framework

Going Beyond Diagnostics

Back in February of this year, we had proposed a “Framework for #betterhvac” – a set of processes and technologies that technicians could follow to guarantee results during installation and service work. But that iteration of the framework focused on just the technical aspects of diagnostics and problem solving.

We now need to go beyond the technical guidance, and integrate the social and economic requirements of both our businesses and our customers. All aspects of our business processes – sales, marketing, training, operations – need to be assessed and challenged to identify the true level of waste and rework caused through building our businesses on assumptions.

We want a future where the following is true:

  • We transform our maintenance programs from net loss to net profit, and we can measure that shift
  • 60%+ of all customers are taken care of through proactive – not reactive – maintenance plans
  • Churn rates for maintenance programs drop from ~50% to <30%
  • We achieve zero callbacks on new installations
  • All technicians and sales staff are empowered and incentivized to follow best practices
  • Data entry is never duplicated, and measurements are never “pencil-whipped”
  • There is enough quantified opportunity year-round to keep both senior and junior staff busy without sending them on blind maintenance calls

And remember: you can’t manage what you can’t measure. With the availability of digital tools today, you’d be a fool to measure your business without software – which is now plentiful and economically viable for contractors of every size.

So, let’s dive into the options available for your business.

The Digital Seven Of #betterhvac

While some tools – like field service management or CRM software – have already become commonplace for profitable HVAC contractors, there are entirely new platforms emerging that you may-not yet be aware of.  We call the seven categories of software and digital tool solutions “The Digital Seven” of #betterhvac, and we view them to be essential when running efficient HVAC business. The Digital Seven are as follows:

  1. Sales Software – Increases ticket size, promotes whole-home solutions, while also removing the need for every technician to sell things they’re not comfortable selling
  2. Design Software – Reduces friction when creating load calcs, and promotes whole-home solutions instead of just diagnosing part of the problem
  3. Field Service Management – Streamlines business operations, reporting, customer interactions and job management
  4. Connected Tool Solutions – Ensures that every tech has the right tools, for the right job, at the right time 
  5. Commissioning & Diagnostics Software – Ensures every job is done right the first time, unlocks every billable opportunity, and simplifies reporting and record keeping through integrations
  6. Connected Pro Tools – Multiplies a technician’s efficiency and accuracy when diagnosing and solving any HVACR problem in the field, and eliminates pencil-whipping
  7. Remote Monitoring – Allows a company to be connected to their customer and home 24/7, identifying problems before a customer knows they have occurred

Below, we’ve compiled a table of software and solutions which can take your business paperless and achieve our goals listed in the previous section.

The Digital Seven of #betterhvac

Note – this list doesn’t include all vendor solutions in each category, it’s just meant as a general overview.

You likely already have a few of these tools integrated into your business, but without a solution in each of the Digital Seven, you will be suffering inefficiencies and missing opportunities, likely to see your opportunities scooped up by a modernized competitor. When adopted correctly, these technologies can also help and retain an energetic and youthful workforce – digital-first tech nerds that will thrive in a paperless environment.

So now let’s explore how the Digital Seven of #betterhvac can be used to benefit our business.

Your Path Toward A #betterhvac Future

It should be clear by now that the waste, rework, and missed opportunities which abound in most maintenance programs should be avoided, but it may still be unclear on how to get you maintenance program to a profitable state. Well, we can help with that, and below you can find four steps to turn your maintenance program from net loss to an ethical, data-driven, money-making machine. We’ve seen multiple companies follow this path and achieve growth at much faster rates than average contractors, and we hope that your company can achieve this goal too.

1. Build & Deploy Your #betterhvac Stack

I love a good analogy, so let’s start with one.

A basic software stack example

A software stack is “a collection of independent components that work together to support the execution of an application”. This term is usually applied to describe the technology beneath software or SaaS products, and there are websites you can use to see what tech stacks leading software companies choose to build their industry leading platforms. Software engineers who can work on all levels of the stack are referred to as “full stack” developers.

We will borrow the term “stack” to describe the combination of digital tools that an HVAC contractor chooses to run a data-driven #betterhvac business. A #betterhvac stack.

In the previous section, we introduced you to the Digital Seven, which is what you will use to build your own #betterhvac stack. The goal is not to adopt all of the software in each category; you just need to choose the combination that works for you.

Here’s is an example of the  #betterhvac stacks selected by a few excellent HVAC contractors different sizes across the US:

The #betterhvac stacks of 8 modern HVAC companies

As you can see, not everyone has a solution deployed for every category. It takes time to deploy new technology, and adoption is most successful when you focus on only a few major organizational changes at once. Your organization is not a set of numbers or tools – it’s people, serving people. And compared to numbers, people can be messy, inconsistent, and irrational at times – even if they want what’s best for the business and customers. And the place where adoption of new tools and technologies usually fails is at the people level

You don’t have time to fail. What you really need to implement here is a lightweight version of “Change Management” – the application of a structured process and set of tools for leading the people-side of change to achieve a desired outcome. FSM software providers like ServiceTitan and Housecall Pro understand this dilemma, and invest heavily in onboarding and training HVAC contractors since most aren’t capable of self-onboarding. We’re happy to announce that measureQuick is now doing the same.

Our team has recently brought on additional staff to help you with onboarding and change management, right-sized for your HVAC business. We’ve heard time and time again from our clients that they believe in measureQuick, but struggle with getting their cross-functional teams to all row in the same direction. What’s required to be successful in this digital transition is the detailed focus on onboarding, coaching, and customer success. 

Furthermore, implementation of a #betterhvac stack not only needs accountability, change management, and execution, but there needs to be an overarching mentorship to keep things on track. If you are struggling to get things over the finish line, you owe it to yourself to take that extra step to invest in the mentorship that comes from our new implementation services.

Feel free to book a free discovery meeting with us to discuss which #betterhvac stack is right-sized for your business.

2. Quantify your Business

You can’t improve if you don’t know the state of your business, but now your #betterhvac stack lets you measure every part of your business. The next important step is to identify and measure the most important metrics or KPIs. Your specific metrics will vary depending on your company size and business model, but here’s a few examples of key metrics that should be tracked using your new #betterhvac stack:

  • Customer acquisition cost (CAC). This is the cost of acquiring a new customer.
  • Customer churn. This is the percentage of customers who cancel their service each year.
  • Customer lifetime value (LTV). This is the total revenue that a customer generates over their lifetime.
  • Callback rates
  • Marketing/Advertising ROI
  • Gross vs. Net Profit
  • Operating Costs

If you’ve properly implemented your #betterhvac tech stack above, most of these metrics should be traceable using your FSM as the central reporting and analysis engine. These FSM tools have hundreds of integrations, and provide built-in templates for tracking and reporting on the metrics that matter most. Just don’t half-ass the implementation of your FSM – work with your coaching, implementation, and change management resources to adopt the tools according to your business needs. 

Note that not all of the tool and software categories in your #betterhvac stack will integrate directly with your FSM, but some do – such as SmartAC.com and measureQuick, which integrate directly with HouseCall Pro and Service Titan.

3. Build A Real Maintenance Department

This one may take a bit more creativity, but it’s worth the effort. Taking the advice from John Ellis, let’s change how we approach maintenance by separating our business units so that they can be quantified separately as you grow. By assigning and reporting on dedicated resources to your maintenance department and leveraging lower skilled labor, you can improve efficiency and profitability. 

Here are a few tips on what this should look like:

  • Allocate maintenance calls to only green staff. This will allow you to leverage lower skilled labor and free up your more experienced technicians for other tasks.
  • Leverage remote monitoring and diagnostics from your team’s bluetooth tools in real-time to streamline maintenance and multiply the value of your senior staff.
  • Deploy SmartAC.com as soon as possible, starting with your employee pilot. The sooner you can roll out your pilot, the faster you can see first-hand how it will benefit your business and customers. Order your 1 or 6 pack here.
  • Use dispatching software to automatically assign the right tech for the job and monitor the status of a job. This will help you to ensure that your maintenance calls are handled efficiently.
  • Follow measureQuick maintenance workflows. These workflows have been proven to improve the efficiency and effectiveness of maintenance operations.
  • Follow up with customers to generate greater revenues. This will help you to build relationships with your customers and encourage them to renew their maintenance contracts.

4. Execute… And Get Your Ass Kicked By A Coach

Changing the way you do business is not easy. It requires a commitment to accountability and change management. Only a few individuals have been successful in navigating this growth path alone, but for most of us – it takes a village. You need ongoing support from an expert who understands your business, your people, your customers, and your pain. 

Here are a few tips that should help you on your journey towards transformation: 

  • Understand that changing habits is hard; most people fail to truly change and instead relapse into old behaviors. You know this if you’ve ever made a new years resolution or struggled with addiction.
  • Accountability and coaching are required to reap the benefits of the previous three steps. You need to have regular check-ins with your coaching resources, and it only works if you’re being honest with yourself and your coaches.
  • Hold yourself and your team accountable to operationalize a better way of doing things. This means setting clear goals, tracking progress, and providing feedback.
  • Celebrate small victories by regularly reviewing the results produced by your #betterhvac stack. It’s exciting and rewarding to experiment with new approaches and let the data show you just how impactful each little change can be.
  • Execute, Execute, Execute. The only way to make lasting change is to take action. So get out there and start implementing the changes that you know will make your business better.

If you need a coach, we have one ready for you. Book some time with Brian to discover how he can help get business to Full Stack.

In Summary

You now have a choice: stick with your assumptions and see your business stagnate, or choose a quantified future with a profitable maintenance program.

Embracing a #betterhvac stack is necessary to truly understand your business and not wasting time on manual data entry. These tools are the foundation upon which the future of our trade will be built. Just as we rely on a plethora of apps and digital tools for our daily lives, we must also integrate these digital solutions to ensure our businesses thrive. 

We owe it to ourselves, our businesses, our employees, and our customers to embrace the #betterhvac way, but know that the journey can be painful. So while transitioning from outdated methods to state-of-the-art practices, make sure you find a great coach who can get you to your goals. 

Let’s achieve profitable maintenance programs through Full Stack HVAC.

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  1. Thank you for sharing valuable insights on full stack HVAC maintenance! Understanding the comprehensive care needed for heating, ventilation, and air conditioning systems is crucial for keeping our homes and businesses comfortable and efficient. Your expertise in this area is greatly appreciated!

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