Author: Becky Forbes | Business Practices

How Technology is Transforming the HVAC Industry

How Technology is Transforming the HVAC Industry

“There are two types of contractors in the future, those on cloud-based software and those out of business.”  

Why is it important to consider how technology influences all industries? Well, technology is the way of the future! Have you paid close attention to how technology has transformed other industries? For example, look at how it transformed the taxi industry. Uber and Lyft gave the taxi market a run for their money, and now, not many individuals call a taxi company when they want a ride. 

Think about how technology transformed search engines and copy machines. You get the gist. Now, what happened in other industries is happening in the HVAC industry! Do you have a plan to stay in business and dominate the competition?

Let’s dive into the challenges that arise with technology transforming the HVAC industry and how Payzerware makes it easier than ever to grow your business and dominate the market share!

The HVAC Market is Finite

The HVAC market is limited, and the number of additional business entrants is declining year over year. That means you are fighting for the market share in your area. In 2012, we saw a 6.8% growth in HVAC companies. The estimated growth rate is 2.1%, and that trend is estimated to continue through 2024. 

Revenue Tightens & Competition Increases

Industry revenue is following closely with many entrants into the market. What is your plan to stick out from the competition? 

The general public’s adoption of technology has influenced how you interact with your customers. There are only so many homes in a neighborhood, and you can stand out from competitors by listening to homeowners’ demands. Technology allows you to streamline communications with your customers. Homeowners want to get notified when the technician is on the way, look at proposal comparisons, sign the invoice, and pay on the spot. Adopting technology and listening to homeowners’ needs will help you dominate your market share.

In addition to competing for market share,  you are also competing for technicians.  It is no secret that the labor supply shortage is an issue for businesses all across the country. Labor force participation has been dropping for two decades. Do you have a challenging time finding technicians to work for you?  Using technology can help recruit new, young talent.  Skilled labor is becoming harder to find, and businesses need to do more with fewer employees! In a tight labor market, employee time is at a premium. Having your business operating efficiently is crucial to drive tremendous growth in your HVAC business.

HVAC Market Fragmentation and Consolidation

Where do you stand in competition against market share? Those on software are growing five times faster than those that are not. The HVAC industry will experience fragmentation and consolidation as all markets do. A fragmented market has lower barriers to entry, increased market competition, low market share, and lower operational expenses. As the market matures, it will be beneficial to consolidate. Barriers to entry will be heightened with increased expenses, and market share and growth will become stagnant. Technology is driving consolidation and creating higher barriers to entry. 

Increased HVAC Business Expenses

As technology changes, companies must adapt and improve their processes to grow with the market. If they don’t, they will end up closing down or get bought out. The increased operational expenses are influenced by technology. They need to improve their marketing tactics to stand out from the competition, which is an increased expense. They also have an increased customer and market share retention.

Doomsday Clock

So precisely how long do businesses without software have before businesses on software take away their market share? 

Technology is influencing our industry at a rapid rate, and it is not slowing down! In fact, it is accelerating faster and faster. Two independent studies performed by Payzer showed that 29% of contractors had adopted modern HVAC software, and 71% were not using effective HVAC software at all! The contractors on HVAC software operate five times faster than contractors not on cloud-based software. This results in the “Doomsday Clock”.

The 29% of HVAC businesses on software are operating five times faster than the 79% of HVAC businesses using ineffective software or no software at all!  That means HVAC businesses on software are getting to more jobs, operating more efficiently, and taking customers from their competitors that are not on software, who cannot get to these additional jobs each day. 

How far away is the turning point? Our calculations and studies show that we are 2.5 years away from when contractors can not meet the space without technology. The landscape changed, and the market shifted. What is your plan to stay in business?

How to Dominate HVAC Market Share

We hope you have insight into how technology will enhance your business, keep you in business and drive efficiency. You can do more with the same resources you already have in the same amount of time. Technology is your answer to combat the prevailing trends of the shortage of labor, workforce participation, and productivity. 

We highly recommend adopting cloud-based HVAC software to stay competitive in your market. If your company is already embracing technology and dominating your market share, continue to drive and fuel your business’s growth. If you haven’t adopted technology yet, what are you waiting for? 

You can click here to schedule a call with a product specialist to learn how Payzerware will grow your business!

Author: Becky Forbes | Business Practices