7 takeaways: ‘Contractor of the Future’ report

A recent survey of over 1,000 HVAC contractors nationwide, dubbed the ‘Contractor of the Future,’ has revealed a range of business patterns. 

What’s happening: The survey, conducted by ACCA in partnership with research firm Farmington Consulting Group, focused on contractors’ “business practices, profitability, and operations,” per a statement. 

• Respondents ranged from small, single-truck operations to businesses with 20+ trucks, and reported generating an average of 69 percent of revenue from residential work.

By the numbers: Contractors who offer at least four proposal options — rather than a traditional ‘good, better, best’ — see their close rates increase by 10 percent and premium equipment climb as a percentage of total sales, the survey found.

• While the average respondent spends six percent of annual revenue on marketing and advertising, those investing at least 12 percent reported higher net profit margins. 
• Overall, 40 percent of contractors said their margins have “stayed the same” over the past two years, while 38 percent noted increases, and 22 percent said they’ve decreased. 

Go deeper: Despite the approach “significantly” improving results, ACCA writes, just 28 percent of respondents lead with monthly payments instead of the total price during sales conversations. 

• Meanwhile, 56 percent of contractors reported using field service management software; however, “most” underutilize it, treating their system as a “glorified QuickBooks,” said Farmington president TJ O’Connor. 
• Only 33 percent of respondents have implemented “some form” of AI into their businesses, with contractors under 45 leading the charge. 
• And by 2027, 62 percent of contractors will use press fittings over traditional brazing and soldering, as 41 percent of respondents have already adopted them, with 21 percent planning to switch within the next year. 

Of note: The full report is available to ACCA contractor members here.