HVAC Industry Insights

With decades of experience working directly with HVAC contractors, Frank Besednjak possesses a unique and often critical perspective on the industry's trends, challenges, and prevailing business models. He is not afraid to tackle controversial topics or challenge the advice of other industry "gurus."

His commentary often centers on the preservation of the trade's integrity, the ethics of sales practices, and the long-term consequences of short-term thinking. He is a staunch defender of the skilled service technician and a critic of business models that he believes devalue technical expertise in favor of high-pressure sales.

The $99 Tune-Up Special! A Dose of Reality

I recently participated in an online debate about the merits of "$89-99 Tune-Up Specials." The discussion revealed starkly contrasting philosophies among HVAC business owners, with valid arguments on both sides. Below are anonymized excerpts from the forum:

• "I tell my team they cannot leave a home unless they sell a minimum $375 repair after any tune-up call. I fired an employee yesterday because he focused solely on repairs instead of selling new equipment."
• "$99 specials are door-openers for sales. That is their sole purpose."
• "We field dozens of calls daily from customers—both new and loyal—asking why we don't match competitors' $99 specials. We explain these are bait-and-switch gimmicks."
• "These low-ball pricing strategies are destroying the HVAC and plumbing service industry."
• "My phone rings all day now that I offer these specials! It works!"

A notable exchange occurred between two competitive companies:

Key Takeaways

1. Ethical Pricing and Ethics – Promotional pricing should reflect genuine value. Recommending additional services is fine, but firing employees for prioritizing repairs over sales is problematic. If a business cannot profit from service/repair work, its pricing model and philosophy need reevaluation.
2. Market Competition and Perception – Cheaper services harm industry perceptions. Focus on why customers choose your business, not just low prices.
3. Online Reviews – Reviews should highlight weaknesses for improvement, not be manipulated.
4. Broader Perspective – Focus on the journey, build connections, help others, and avoid losing sight of human values in pursuit of profit.

Diagnosing the Dilemma of Repair Versus Replace

In this extensive article from ACHR News, Frank Besednjak provides a sharp critique of what he sees as a dangerous industry trend: pushing equipment replacement over repair. He argues that the unique value proposition of a servicing contractor is the ability to troubleshoot and repair complex systems.

When the industry shifts its focus to simply replacing units, it devalues this critical skill set. We end up having a bunch of salesmen instead of servicemen.

This transformation, he believes, puts the industry on a perilous path where skilled technicians are no longer needed, and any salesperson can be taught to sell HVAC units, ultimately commoditizing the business and eroding its unique contribution.

The Problem with Replacement-First

Besednjak points to the advice of some industry "gurus" who teach contractors to prioritize replacement sales above all else. While this may lead to short-term financial gains, he argues it will inevitably "fall apart" in the long run, leaving a trail of angry customers and damaged reputations.

He has seen evidence of this in company reviews and has heard of unethical practices, such as recommending a full system replacement for a dirty condenser. This approach, he contends, replaces the trusted technician with a high-pressure salesperson, which is a disservice to customers who rely on contractors for honest education and advice.

The Menu Pricing Solution

His proposed solution is rooted in customer choice and transparency. He advocates for a "menu pricing" approach. Instead of presenting a single, high-cost replacement option, the technician should offer a menu of choices, ranging from a simple, low-cost repair to a full system replacement.

He cites studies showing that when given a choice, most customers do not pick the cheapest option but rather one in the middle. This empowers the customer, allowing them to make a decision based on their own budget and needs, rather than feeling pressured into a single course of action.

This method respects the customer, preserves the integrity of the service call, and ultimately builds more trust and loyalty than a one-shot, high-pressure sale. He believes that contractors who run their service departments at a loss to chase replacement sales have adopted a flawed, wholesale-centric model, whereas the real, sustainable profit lies in a robust, customer-focused service department.