7 Tips for HVAC – Service Execution Excellence

Through sweltering heat and fierce blizzards, HVAC technicians are there to keep equipment running at peak performance. But how do you make sure you get peak performance out of your HVAC service organization year-round, year-after-year?

Here is a list of 7 tips to help you achieve excellence in your HVAC service organization.

  1. Manage resources through all seasons
  2. Maximize uptime of HVAC equipment
  3. Improve margin of service operations
  4. Drive cross & upsell
  5. Deploying (sub)contractors
  6. Dealing with increased HSE requirements
  7. Sustainability, dealing with HazMat

Manage resources through all seasons

A customer requirement for heating and cooling is seasonal, resulting in an equally seasonal pattern in technician demand. Typically, a service organisation will try to balance resource capacity by doing installations, retro-fit and preventive maintenance during low season and dedicate capacity in peak season to break-fix. 

Over the years HVAC organizations have acquired a lot of tribal knowledge to mitigate the daily resource juggle. Modern service execution systems will facilitate you to formalize this tribal knowledge and to upgrade your capacity planning process applying dynamic scheduling. As a result your customers will get the service they expect and your technicians will feel in control instead of being dragged from job to job.

Maximize uptime of HVAC equipment

The majority of today’s service level agreements are still stated in terms of Effort. “We will commence the fix of the malfunction in x hours”. Some contracts up the value promise to a Result. “We will deliver a fix within y hours”. To offset the risk of penalties, the latter contracts often have a section of fine print watering down the Result. What owners of HVAC equipment want is Uptime. 

Combining IoT connectivity and Service Execution Management allows a service organisation to both deliver the Uptime a customer expects and to deliver that service in a cost-effective way.

Improve margin of service operations

Competition in the HVAC industry is fierce. Original Equipment Manufacturers (OEM), Third Party Maintainers (TPM) and Facility Management Companies (FCM) all operate in the same space to make a margin. A quick search on the internet tells us that a typical HVAC nett profit margin ranges from 1.4% for TPM/ FCM to 12% for OEMs. These numbers indicate that cost control is a constant driver in decision making.

To control cost you need visibility. To create visibility you need tools and processes. Though HVAC equipment may comprise of generic components, both the infinite number of configurations and wide range of commercial conditions agreed with customers define your requirements for agile service execution tools. Tools minimizing the dependency on IT support and maximizing flexibility for your markets & channels.

Link: https://www1.eere.energy.gov/buildings/betterbuildings/neighborhoods/pdfs/hvac_contractor_business_model.pdf

Drive cross & upsell

Although we see cost control having the primary focus in HVAC, we see maturing organizations driving for revenue increase. The service agreements with low margins won via a tender process, often only contain the basics. The basics being periodical maintenance, a response promise topped with contracted rates and material discounts. To make a customer account (more) profitable, service organisations depend on their ability to cross and upsell beyond the basic contract.

Technicians being trusted advisors to your customers can act as eyes and ears to detect revenue enhancing opportunities. Capturing leads, enabling technicians to quote on-site and ultimately being able to convert a quote into a work order will attribute to your revenue growth targets. In parallel you will see that both customer experience and technician empowerment will get a boost.

Deploying (sub)contractors

According to The Service Council approximately 32% all field service work is completed by partners/ subcontractors. Though this percentage may vary per market and product segment, subcontractors play an important role in getting all the work done. Subcontractors come in all shapes. Sometimes they will compete with you, in other markets they may complement your route-to-market.

Prioritizing and assigning jobs are most probably the two most important aspects of dispatching affecting both cost and service level attainment. Make sure your dispatching console supports you in decision making while simultaneously maintaining visibility of the job progress once handed off to a subcontractor. Modern tools can alleviate the need for complex subcontractor integrations by means of allowing the subcontractor using your processes on a device of their own choosing.

Link: TSCReport-F-2016 -FSOutsourcing-04.pdf

Dealing with increased HSE requirements

“Heating, ventilation and air conditioning company, HLA Services, has been prosecuted by the Health and Safety Executive (HSE) and fined for safety failings after an employee suffered serious injuries in a fall whilst repairing an extraction unit in Newcastle.”

A headline like this is the dread for any company. Of course, you will tell your technicians how to adhere to all regulations at hiring, during onboarding and probably you will have periodical health & safety briefings throughout their tenures. Ultimately you want to create a safety culture in your organisation.

Life gets complicated when the regulations change, when procedures are different per customer location. Somehow you need to embed health and safety handles into daily operations. What if you could make those part of the work order and track compliance through a configurable set of check lists.

Link: http://www.heatingandventilating.net/hvac-company-fined-by-hse-for-safety-failings

Sustainability and dealing with HazMat

Beyond safety for technicians governed by measures of HSE and OSHA we see that HVAC organisations also have a responsibility to take proper care of hazardous material like refrigerants. The increasing attention for the sustainability theme is raising the bar to reduce the use of materials in general and reclaim reuse.

To achieve these goals, you need a service execution system that embeds a supply chain function. To be able to track the use of material and to instruct technicians what to do with defect, used and waste materials.

Links: https://www.refrigerationschool.com/blog/hvacr/osha-affect-hvac-industry/

Measuring Satisfaction: read the comments

What is the ideal customer experience and when do you know you got it right? What should you measure and how should you act? In short: read the comments! As a bonus: do an e-NPS.

The real growth power of NPS is all in the follow-up

Chad Keck

At Maximize Chicago Stephan McPhee from MilliporeSigma and Coen Jeukens from ServiceMax engaged in a discussion with service leaders on the topic of CSAT, CES and NPS. In varying degrees, we all measure customer experience. Though the different metrics may cause confusion in what you actually measure and should do.

What is the ideal customer experience?

If we briefly put aside the metric and look at what (end) customers really want, two things really stand out.

  • Get what you Expect
  • Walk the Talk

The former means a customer is getting the value it has been promised, the latter ensures the delivery is done consistently and setup for repetition.

Different methods of measuring

To measure customer satisfaction three different metrics are in use. Each catering to a different aspect of satisfaction.

  • NPS: will you recommend my brand?
  • CSAT: are you happy with the transaction I just performed?
  • CES: how easy is it to do business with me?

At present the most popular metric is NPS. Aly Pinder from IDC Manufacturing Insights shared his observation that more and more organisations are leaning towards Customer Effort Score as it addresses the action to remove friction, alias dissatisfaction.

Perhaps what you measure is what you get. More likely, what you measure is all you’ll get. What you don’t (or can’t) measure is lost.

H. Thomas Johnson

Read the comments

Ultimately the actionable result of any satisfaction metric is the most important piece of the process. Throughout the discussion at Maximize the same phrase came back over and over again: “read the comments”.

The numerical value of a satisfaction measurement is single dimensional: it tells you “what” your score is and how it changes over time. The comments to the score tell you about the “why”. Often the comments contain “free advice” on how to remedy dissatisfiers.

In progressive organisations we see an embedded process to review the comments on a periodical basis, linked to their continuous improvement programme.

e-NPS

While most organisations have embedded customer satisfaction measurements in their modus operandi, a growing number of organisations is mirroring the NPS philosophy to their own employees.

Your own employees hold an invaluable wealth of improvement opportunities. Ideas to improve their own work and to be better equipped when dealing with customers. If you find a way to tap into this potential, you will see that happy employees indeed make happy customers.

Happy employees ensure happy customers. And happy customers ensure happy shareholders, in that order

Simon Sinek (leadership expert)

If you want to receive more insights into how ServiceMax embeds satisfaction measurements into every aspect of Service Execution, do contact us.

This article is published in ServiceMax Field Service Digital on November 14th, 2019