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Canadian sectors are feeling the heat of today's tight economy, and the HVAC industry is no exception. Yet rather than sit back and ride out these challenging times, there are actions HVAC companies can be taking now to strengthen customer loyalty and rise above their competition.

“In this economy, customers are not only looking to save money, they're also looking to deal with HVAC people they can trust,” insists Steven Lazar, founder of Lazco Corp. “Now is the time to be active.”

No doubt, customer relationships are a key area of focus. For contractors, that means reaching out to existing customers as an industry expert, offering tune-ups and assessments for their heating and air conditioning systems, and suggesting ways in which they can save money through upgrades or replacements.

“In this industry, there are order takers and order makers,” says Lazar. “The first are the ones who sit around and wait for customers to come to them, and the second are ones who make the effort to interact with their client base; whether that's as a contractor taking on a consultant role with their customer or as a wholesaler helping those contractors become more successful.”

At the end of day, he adds, “If you want to stay in business right now, you need to be an order maker; and I believe the HVAC industry can benefit from being more proactive in that regard.”

Certainly, now is the time for HVAC industry players to demonstrate their expertise in the field. Doing so can be as simple as holding in-shop product demos, showcasing new products, or producing informative materials and company documents that contractors can pass on to their customers. Taking initiative in today's market can also mean touching base with customers through phone calls or on-site meetings and presenting them with the latest information on new technologies, HVAC developments, and industry insights.

On the business-facing end, HVAC companies can weather the tough economic conditions by pricing their jobs appropriately. For example, explains Lazar, “There is a big difference between mark up and margin, and those who don't understand that can find themselves losing money at the end of the month.”

The rule for appropriate pricing, he says, is simple: “Take your net cost of equipment and then add whatever amount you need to cover your overhead – say $250 to $300. Then, divide that total by 0.70 to get your 30% mark up. Now, you'll have the actual price that you need to sell your job for in order to meet your mark up.”

In addition to customer outreach and proper accounting, inventory management is another critical consideration. Done right, and companies can reduce money loss due to theft and untracked items while ensuring outdated or otherwise unsellable inventory isn't taking up valuable space.

“Being in the industry for 30-plus years, I'm always amazed whenever a manufacturer or distributor gives us a surplus list to help turn their equipment into working capitol, and by the time we activate a purchase order to do business and they get that inventory ready to ship, we find that the final inventory tally can be off as much as 20-25%. That means there is a huge difference between what the computer says is there and what is actually there.”

As such, it is important to stay on top of inventory management. It is also helpful to work with HVAC companies that specialize in turning excess or outdated inventory into working capitol, or those that can  offer industry equipment at significantly reduced prices.

Overall, he notes, “Inventory management is a crucial area in the HVAC industry for both manufacturer, wholesaler, and contractor; and it's one area that can really go a long way towards keeping HVAC companies in a healthy and competitive position.”

Steve Lazar is founder and Owner of Lazco Corporation. For more, visit www.lazcocorp.com.

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