I often struggled to communicate why so many companies have such a difference in price on the installation of a heat pump, that was until I listened to a podcast featuring Tom Mello owner of A1 Garage Doors. When you go to buy a Ninja Coffee pot, it doesn't matter where you get it from as the product should not vary from retailer to retailer cause it was produced as a "ready to use" item at a factory. When having in home services performed, the quality can vary greatly. In the podcast with Bryan Orr on the HVAC School Podcast, Tom Mello acknowledges that his prices are higher than his competition for a number of really good factors. He pays very high wages (which we all want for ourselves, our loved ones, and our communities), he has a very good (and expensive) field management software that facilitates great communication with clients as well as job tracking, he's marketing his brand which can cost in excess of $40,000.00 per month so that clients can find his amazing company and the quality services he provides.
If a company wants to attract great quality employees with experience, knowledge, and motivation to do things the right way; they have to pay higher wages. Higher wages equate to increased labor burden and thus higher prices.
I can remember not too long ago that the average pay for a good HVAC technician in Onslow County NC was $16/hr TOPS! With so few truly qualified and great technicians in the market, that pay now ranges from $22-$32/hr. This single metric just doubled the labor burden to companies in less than 10 years.
Marketing has become very expensive, at one time I was spending upwards of $2k/month in marketing just to let the community know that Simply Right Heating & Cooling existed. With out marketing, I wouldn't have been able to survive as a business cause the phone wouldn't ring. Marketing cost at that time had to be factored into my bottom line, which caused me to be more expensive than some of my competition that had no need to advertise.
The final factor that really changes the cost of in home services is going to be the quality. Quality of materials and quality of craftmanship both come into play here. My good friend JC, owner of 910Air in Wilmington NC, has many TikTok videos where he shows how amazing his installs look, and that takes time to make things perform AND look good. Like JC, Kenny and I work hard to make sure our installs not only function for a long time without major issues, as well as they should look good when we get done.
I will wrap this up with a quote from JC that he told me years ago and I've found it to be true; "The price is what you pay... The value is what you get". Thank you for reading and I hope you enjoyed the post.
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