What’s Your Plan to Double Your Pull-Through Revenue?
Most management teams we work with have a pretty good idea of what this number is every year and what the ratio of annual pull-through dollar to service contract dollar results are versus a predefined target. It’s one of the areas we’ve focused our Software Development and Channel Development teams on for the past couple of years.
We’re beginning to see a sea change in some of our partners’ results the past few years. Those that have begun using Real-Time Building Analytics are using this technology to drive Continuous Commissioning services as an enhancement to their traditional contract services. While these companies are experiencing some lift in their initial contract values, the real increase is showing up in pull-through work, including service, project and controls opportunities.
This shows up in the form of additional HVAC dispatch service and controls service, but it’s also leading to significant equipment and systems upgrades. As the value of these types of services become obvious to the client (fewer if any comfort complaints, measurably extending equipment life and measurably reduced costs), our partners’ credibility builds with their customers. They condition their clients to expect updates using building data and results. This leads to trust such that when they show up with a financial proposal that meets the client’s financial hurdles, they tend to get the work.
While traditional HVAC service contractors hover in the $1-2 range of pull through work for each $1 of Service Contract value, I am seeing numbers that range from $3-$5, and even up to $6 per $1 of contract.
Sounds pretty outrageous, doesn’t it?
Alex Waibel is a Principal of BuildingLogix, an analytics platform developed by Waibel Energy Solutions a sophisticated HVAC Service Provider based in Dayton, Ohio. The Waibels have been clients for almost 10 years and we’ve worked closely to align our technology and processes to leverage both parties’ expertise. They’ve been a great incubator for testing out new service offerings like Guaranteed Savings PM programs and integrating Continuous Commissioning into traditional PM service offerings. Alex and I just finished a project analyzing their service revenue growth over the past 10+ years.
According to Alex, "We've increased our service revenue by 231% since the economic recovery. The primary drivers for that growth have been integrating Building Analytics into our service offerings and equipping our sales force with automation and training that enables us to efficiently scale. Distilling complexity into value and benefits that our clients understand is the catalyst to sustained growth."
Jon Fruetel operates MRG out of Nashville, TN. Jon has pioneered the integration of our platform with Building Analytics. He has had tremendous success this year leveraging data from his Continuous Commissioning process to drive project upgrades, $3MM worth! Measurable reductions in energy costs (over $1MM) are driving this growth.
While these methods are driving tremendous project growth, they are also driving new PM contract growth as well. Jon bundles building analytics into most of his service contracts betting that the investment will generate a healthy return. It’s working.
These are but two examples of rapid revenue growth our clients are driving. So, what are the keys to
driving this type of growth?
Commit to delivering measured reductions in building operating costs as your core value proposition.
Use software automation to help sales teams efficiently uncover and simply present opportunities to leverage your service offering to deliver lower costs.
The senior team needs to commit to using building analytics to drive a continuous commissioning program. Drive the Strategic plan including KPI’s to hold teams accountable.
There’s a wave coming. I’ve seen these tools evolve over the past 10 years and over the past 18 months I am seeing accelerating adoption in the HVAC channel. The “bigs” are already in. Large national and regional companies are, for the most part, in the early stages.
Are you adapting? Do you have a plan? Think seriously about this opportunity. The industry is moving this direction.