Question: If you had a crystal ball, how do you see our business in 10 years? What changes does the contractor need to embrace today in order to be prepared for the future?
Gary Elekes; Founder, EPC Training:
I do believe there’s going to be some substantial changes in the next 10 years. It’ll be probably driven a lot around the technology enhancements that we’re running right now with respect to, you know, 10 years ago essentially the iPhone came out, so you didn’t really have a mobile device back then; you were using desktops. And now, pretty much, most of the searches and most of the people out there are touching a mobile device of some sort.
And so I think the future, while it’s awful hard to predict trends-wise, we’re usually pretty good. So the manufacturers and the people who are building the equipment will undoubtedly be launching smart technologies on their equipment that will tie back to the contractors’ universe for an alert system, much like we’ve done on the commercial side for years and years and years. That cost of technology is now coming down, and I think that people will absolutely have that on their equipment. It’ll probably be on the higher-end equipment of course, but, gosh, probably 60% to 70% of the equipment now that we sell is the higher-end products and services. So that client base is going to expect that kind of a product or service.
So that requires us to understand the service agreement model. Having the customer attached to us, it really even offers the value chain benefit that we just talked about – why they would be on the club program. So the club program itself, that’s an extension for me, to be able to say, “Hey, I’m going to put in this 24 SEER VRF technology for you, it’s got smart technology on it, it’s going to alert me if anything’s happening, so I’ll reach out to you. That’s going to be $13.95 a month, and that’s perpetual and we’re just going to keep track of it for you.”
And so I think that’s one of those first trends that’s probably going to hit us fairly quickly. I also think the continuation of ecommerce and just the online platforms for clients; how the consumers are behaving and what they’re doing. I see a large-scale initiative – somebody will be very successful at this I’m sure – selling parts and accessories and filters and everything. If it’s not Amazon, it might be a contractor. So that’s all good.
The question came up at the EGIA conference about: Do we think the industry will be “Ubered,” so to speak, as a verb? And I think the question is not when that will happen, it’s who’s going to launch the first version of the app, so that I can click on a technician and have a technician show up at my house based on an application? How that evolves, I really don’t know, I’m not necessarily in the position to release those details, but I think that’s imminent. Within the next 3-5 years, I think that probably launches. So consumers will see advertising, you know, “If you’re not satisfied with your utility” or “you’re not satisfied with your home comfort, dial or click on 1-800-Tech in the app,” and you go from there.
And then I also believe that, as we go forward, the big box retailers will continue to be a part of that. Another trend that’s back, that has its cycles, is consolidation. There’s a group of hedge funds that are out there right now that are actively acquiring businesses, and many of the people at EGIA are very familiar with that, so it’s not a surprise. We did that in the ‘80s, we did it again in the ‘90s, we’re doing it again in the 2000s. So the companies that scale and consolidate tend to have equipment buying power. They tend to have volume rebates. They tend to be able to market a brand in a community a little differently than those of us who are small business owners.
So off the top of my head, those are four or five trends that are out there and they’re instantaneous. I think how we defend against all that is we take care of our customers, we build club agreement programs, we train, we create great culture, we recruit smartly based on the idea that we’re going to be more productive – not necessarily that we’re going to need a larger business, but that we want to get more productivity out of our folks. We employ technology, and we create a brand in the marketplace that’s known, based on the reputation of your company, as the brand of choice – you become top of mind. And then in any and all instances, technology will be supportive of you as a brand and not necessarily harm you.
I think it’s the middle guy in contracting, it’s not the one-truck or one-man operation that suffers, nor is it the scaled business, it’s usually the company that’s in the middle. So it’s probably one of those things where you either need to grow or get smaller. Wally?