2026 HVAC Contractor Survey Breakdown: Trends You Can’t Ignore

This week host Scott Pierson breaks down the key insights from the 2026 HVAC Contractor Survey with guest David Holt of EGIA. They explore how rising prices, shifting consumer behavior, and a potential repair-heavy season are reshaping the industry. Scott and David also dive into why customer experience is becoming the true differentiator and how labor shortages and diversification are changing the way contractors operate. 

Transcript

SPEAKER_01 0:00

Welcome to Beyond the Thermostat, the podcast where the nuts and bolts of the HVAC industry come together. I am your host, Scott Pearson, and each week we dive into the real trends, the insights, and the conversations shaping the future of the trade. From market shift to new technology to strategies that went. We're here to keep you in the know. So let's turn up the airflow and get into it. Welcome back. I am honored today to be in the presence of Mr. David Holt from EGIA. Special guest today with a lot of special information for us. We are going to start talking about their 2026 EGIA HVAC contractor survey that was recently released to the wild. Lots of good insights, lots of good nuggets of gold for anybody that's really studying that contractor space and want to know what's going on in the market. So David, welcome and excited to talk to you today.

SPEAKER_00 1:00

Thanks, Scott. Appreciate the opportunity to uh to share what we found and uh you know kind of riff on some other industry events that we're interested in.

SPEAKER_01 1:09

Yeah, absolutely. So EGIA, big group of contractors.

SPEAKER_00 1:14

How many members? We have over 50,000 people that we've interacted with over the past 10 years, many of which have graduated. We we certainly would love to have more. But uh bottom line is uh EGIA comes in contact with contractors through our distributor program as well as our contractor program all over North America, actually all over the world.

SPEAKER_01 1:36

I love that. And yeah, sounds like you guys are the who's who in the zoo. So I want to jump into this and and give the listeners some of the the good nuggets of information we've got. Um so frame it up for me. Uh everybody that participated in this survey was at some level uh an operator leader in the contracting world today. We're not talking about technicians or you know, somebody that's not making decisions in the business. This is full-on research done towards a group of people that's that's pulling the levers, pushing the buttons, making the decisions in in the the day-to-day business, right?

SPEAKER_00 2:16

Yeah, and that and that's really shoot true. So you could share a screen I've got up on my screen right now, and and and this kind of breaks down who the participants were in our in our survey. So as you can see, 63% of the respondents that we had were owners. I mean, they classify themselves as owners. 6% said they were executives within the organization. 13% said they're general managers. Well, we put those three together and we call that our executive management group. So if you do the math, that's 19 plus 63. In my world, that's 82 percent. So 82 percent of the uh people that responded are executive management.

SPEAKER_01 2:58

That means that the majority of of the findings in the survey are gonna be from a seat of decision or entrepreneurial spirit.

SPEAKER_00 3:06

So that's right. That's right. Yeah, so so it's heavily weighted towards owners is really what it comes down to. And that was our goal. Um, in our first round of doing this last year, we opened it up really to anybody at the office that would uh that would answer the questions. And what we realized is that was a mistake. Because certainly the the CSR sitting there answering a telephone or a service tech or an installer that happened to stumble upon the link to answer this thing, you know, their perspective of what was going on in that business is uh quite different than the folks in the C-suite, if you will, right? And so one of the things we decided in this 2026 edition was to narrow the focus and go directly to the folks pushing the button and flipping the levers.

SPEAKER_01 3:57

Yeah. So what were some interesting takeaways? Let's let's say if you had to bullet down to to five big aha's from this year's survey compared to previous years. Well, what's the big change? What's the big story this year?

SPEAKER_00 4:12

So if you look at this screen, we can go ahead and show this one real quick. The interesting thing is you look at a lot of times you hear people talking about how they differentiate their business. And this particular chart is interesting because 44% said it's all about the customer experience. It's not about price. Notice that price is actually only 3% said they differentiate their business via price. Now that could go high or low. We didn't ask, did you do it based on low price or you do it based on high price? But only 3% even mentioned price as a differentiator. So 27% talking about the quality of their job, 20% for the brand. So if you look at the customer experience, quality, and the company brand, I mean, that's that's the majority, big time and a big piece. Um product service offerings, pretty small. And so that's actually encouraging because uh previously, and now again, we had a different group of people that were answering the question, price was a significant differentiator as far as the troops were concerned. But the owners, leaders, and managers are saying, no, it's not about price at all. It's about our customer experience, is the number one most important thing. And I think that's that's excellent. I mean, personally, as a former contractor myself, I will tell you that would have been our differentiator is how do we handle the people that are paying our bills, which is the customer? How are we taking care of them in such a way that they'll return, whether that they'll be a maintenance agreement customer with us? How do we how do we keep earning their trust so that they'll continue to spend money with us is ultimately what it comes down to. And and it's encouraging to see that most of the leadership in this industry is now saying, you know, customer experience is really the key. It's it's not about the product, it's not about the price, it's about how we treat the people that are paying the bills. So I think that's a that's a pretty big takeaway.

SPEAKER_01 6:16

I love this because the idea that you know customer experience, quality, and company brand, those are things you can't plagiarize, right? If I'm competing against you as a contractor, I can I can match your price, I could sell the same products. Um, but you can't copy me for a unique experience that I can define with my brand and putting forth a quality level of work and craftsmanship. Yeah, that's something that can't be be replicated. So I love that the contractors in this group are saying that out loud. Hey, it's not about price. Um I selfishly love that because I'm also a vendor to some of them. So well, absolutely. Yeah, that's uh an interesting angle that our sales team can now look at saying, hey, yeah, we can talk about product, we can talk about price, but you know, how can we help enhance your customer experience um downstream?

SPEAKER_00 7:13

So and so from a from a big time kind of aha moment is when the folks on the front line, right, which is contractors, right? You're in the wholesale business, you don't have you don't have anything to sell if customers aren't buying it from you, all right? Customers of the contractors. Well, contractors aren't buying stuff that they can't sell. So if we if we get serious as a team, and I love you know the downstream, upstream, if we can get the entire channel focused on what can we do to help that consumer, right? That customer, how what can we do collectively to help that consumer have a better experience working with our contractors out there in the field, you know, and thinking about what you have to offer with the ability to, you know, have a contractor, have a service technician say, I need this part for this old piece of equipment, I need this part right now, and and they could technically drop ship it right to the customer's house, right? And have that thing shipped to the house and or shipped to the shop or however they want to do it. And as soon as that part's in the contractor's hands, they can get that thing up and running again. I mean, those are that's all part of the customer experience, right? It's about how how quickly can we go from I am uncomfortable to I am comfortable in in a stress-free and pain-free way as possible. I just did a a meeting the other day with a group of folks that a bunch of sell a bunch of service techs, comfort advisors, and some some like repair techs, maintenance techs, and selling techs were mixed into this group. And I had executive leadership in this meeting as well. So it's good, it was a good mix of of people, all from the same company. And as we started talking about things, and they started talking about, well, we're getting beat up on price on this, on that, and the other. They started mentioning some brands, they started mentioning some refrigerants, they started mentioning all these different things. And I said, okay, okay, okay. Let's let's stop for a minute. How many of your customers even know what refrigerant is in their HVAC system right now? Do you think? I think they're just like, uh like none. And I and I actually did a test. I there was a young lady, it was a CSR, it was sitting in the front of the room, and I asked her, I said, Do you have an air conditioner at your house? She says, Yeah, I live in Texas. Okay. Uh, what refrigerant do you have in your air conditioner? She looks at her husband who was sitting next to her. And he, I said, Don't look at him. Tell me how what kind of refrigerant is in your air conditioner at your house? She says, I don't have a clue. I said, Do you have a refrigerator or a freezer at your house as well? Oh, yeah. What kind of refrigerant's in it? Uh, I don't know. Do you does your car have air conditioning? What kind of refrigerants in it? Uh I don't know. You know, we make a big deal of the refrigerants from us because it's technical and it's stuff that we deal with. But homeowners, they don't care what refrigerant is. They care, does it cool my food? Does it freeze my ice cream? Does it keep my house comfortable? Is my is my car comfortable? That's like four different refrigerants, probably, maybe three, right? That are being used in those different setups. And you're like, why are we so focused on something that customers don't care about? What they care about is can you fix it? Can you make me say healthy, comfortable, and efficient? So I love the fact that that our members uh are the not even, they don't have to be members to have responded to this survey, but I love it the that the respondents found that that um differentiation factor was was really kind of a key a key factor. In fact, um there's a little bit more to that chart. If you want to share the screen real quick, I want to show you something that's at the bottom of that chart. I was just showing you the top piece. And I apologize for this small screen, but I don't I don't have good good slides for you to be able to pop this up. But look at this on the we we broke it down by gender, too. And you look at this and it's like, hmm, customer experience. 53% of the ladies that were respondents of this said customer experience was the big deal and quality. Look at that. That's 89% at the top of the top two. Look at how company brand creeps up for the men. Isn't that interesting?

SPEAKER_01 11:37

Yep.

SPEAKER_00 11:38

And who's the buyer in most homes ultimately?

SPEAKER_01 11:42

Yeah, the wife.

SPEAKER_00 11:44

Yeah. So I think this is really important for people to understand is like we got to look through the eyes of the customer. And the reality is, if you do have a traditional married couple situation, and if you don't believe she's got the uh purse strings in her hands, you hadn't been married very long. Because I know uh when we we recently bought windows for our house, we recently bought a new air conditioning system for our house. My wife's a little bit more educated than most when buying air conditioners, but she was not educated by anything other than her own research on buying windows, and and she decided she wanted the very best the guy had to offer. And it's paid off for us. I mean, the house is much more comfortable, there's no drafts, we don't have the noise, road noise that we used to hear. I mean, it's like imagine that. You pay a little bit extra, you get a lot more benefit. And and and the ladies in the decision-making process ranked customer experience much higher than their male counterparts and quality much higher than the male counterparts. I mean, that's that's a full 11 points on each, which is pretty impressive.

SPEAKER_01 12:52

So knowing that, are they able to command better prices in the market over the next year or in the past year? Like, is there any you know data on that component where prices gone from 25 to 26?

SPEAKER_00 13:10

So as it relates to pricing, this is this is kind of interesting. So what we asked them is what kind of impact has the supply chain issues, tariffs, all this? Because remember, we've been kind of running through all those things lately. It's kind of interesting when you look at the numbers. So 3% said they have not increased their retail price at all. This is looking at retail price. So 3% said I absorbed all the costs, which is obviously ridiculously not a good idea. All right, if your costs go up, you should pass those on to your customer. 1 to 25%. That means a 1 to 25% price increase. That's a huge spread. 58% of contractors said, yep, we increased our price up to 25% retail. But the really scary one is 26 to 50 percent. I'm like, what? 30 said they increased their price 26 to 50 percent year over year from 2025 to 2026. Obviously, either A, they really were underpriced prior, or B, they really took a beating on their cost, maybe labor cost, maybe parts cost, maybe equipment cost, who knows? Um, the those ones that are 76 to 100 percent increase, uh clearly whack, but only one percent reported that. I don't think they understood the question myself. 51 to 75 percent, 8%. So, really, when you look at it, the big chunk, that one to 25%. Now it could have been they only did two or three percent. Again, we should have probably dialed that in a little bit more uh in smaller chunks than we did. But here's the interesting thing if you look at by company age down there, the the blue, right, that 51 to 75 percent, those are big companies that said they went up that much. Now, that could have an impact because maybe those big companies are PE based, and maybe the PE firm said we got to get our prices up because we got to generate some return here, right?

SPEAKER_01 15:25

No, it's it's interesting because if we think about retail price and and how it's slid up over the last eight months, because there were a lot of variables in play last year. It was probably the right time to do that. What are we looking at this next season? Equipment shipments are down across the board. Uh consumer confidence is down across the board. Um spent a good amount of time talking about that with Alec from HomePros a couple weeks ago. And the idea that you know most contracting businesses aren't built to be service heavy, right? They're built to chase service until they get a new piece of equipment to install, and that's where they make a good amount of cash. Um what's gonna happen if they don't recalibrate in a very repair-heavy summer?

SPEAKER_00 16:19

So really, really, really good question and very insightful because that is exactly what happens when, and and I've lived through this, and of course, our family business lived through this multiple times from 1956 to 99 when we owned the business. But when the when the economy and and consumer confidence decline, repairs go up automatically. They just do because everybody's like, I'm holding on to my cash, you know, I don't want to go out and borrow money and all that. And and I'm fully believing that this is gonna be a repair or replace season, right? And those companies that are winners are gonna have they're they're gonna have a methodology for being able to communicate the value of upgrading equipment. The the consumers are are without a doubt, they're gonna be focusing on you know, it's uh yeah, it's a $2,000 repair to get this thing back up and running, but dang, it's $20,000 to upgrade it up. When you start looking at these price increases like this, and you think about how much money we're talking about going up, some of these guys are making these adjustments based on the fact that that labor expense that they are incurring is gonna have to drive their retail pricing going forward to be able to cover overhead and earn the net profits that they that they need to earn. We're not gonna be able to rely on big boxes as much as we once could. And it's causing people to rethink their entire pricing structure. Because think about this. I mean, Scott, if you if you don't sell a cardboard box that contains a component in your warehouse today, well, you can sell it tomorrow, right? It didn't, it didn't spoil sitting in your warehouse. Well, if I don't sell my labor as a contractor today, it spoils that day, right? I can't sell yesterday's labor tomorrow. So what I have to do as a contractor then is I have to adjust my retail pricing that's focused based on my labor component because there may not be a whole lot of parts or big chunks of equipment to help me create that labor. So we start talking about gross profit per man day, gross profit per crew day. We start talking about those things. And if you're not selling a lot of boxes, you're gonna have to sell your labor at a higher price to stay in business. So it's gonna be a lot of structural changes in the way we do business in this industry for sure.

SPEAKER_01 18:59

Yeah, and that provokes another thought. So you've got some structural changes that need to occur, and we've for years now been talking about the diminishing skilled labor, uh, especially in the trades, especially in HVAC. Um, now you're gonna talk about a repair heavy season. And correct me if I'm wrong, but usually the the install guys aren't the best guys, it's the service guys on the crew that are the best guys. Um depends on depends on your business.

SPEAKER_00 19:31

Yep. Uh depends on your business, but that is traditionally you are correct.

SPEAKER_01 19:35

So what strain does that put on the talented crews that are are doing good service? Uh, because we already lack enough. Uh there's some really good ones that have earned their retirement. And now you're gonna have probably an influx of repair calls in a business with a crew that was probably strained in the summertime, you know, meeting that that demand anyway. Yeah.

SPEAKER_00 20:06

I mean, you're right. A lack of labor is gonna cause a lot of problems. Um, supply and demand comes into play. Contractors are having to pay more to keep people working for sure, because it's a tough job. No doubt about it, it's a tough job. And you know, service techs and installers, they're not stupid. They're like, man, if there's uh fewer of us out there, we ought to be getting paid more for doing what we're doing. Well, yeah, that's kind of the way economics works, isn't it? So there's uh there's there's a lot of dynamics going on right now that you know some people are probably saying, yeah, maybe it's time to return. And and and that's happening pretty quick too. I mean, we see a lot of people kind of bailing out right now. And it's uh it's gonna uh probably level the playing field quite a bit. And of course, our buddies with the big pockets, you know, the PE firms, they're all looking at this and just salivating because they're like, yeah, man, we'd love to be the only fish in town. All right, they would love to own all the market. And many, many times um those those higher quality companies are not afraid to really get their hands dirty. And what I mean mean by that is they're not afraid to rip out a duck system and design it properly and put it in properly. And that's a very labor-intensive job. And most of the what I'll call high volume contractors that are pushing big boxes out the door quicker than they can get them in, don't want to touch that stuff, right? They just want to swap a box and move on to the next one. Yeah, I mean, it's not, it's just there's so many things that go on when when you get a uh what in my experience, a high quality contractor that really wants to do what's right for the customer. And it's interesting because you know, one of the things we asked content. Contractors is, you know, what's your look? What's your take on it? Are you pessimistic? Are you optimistic? Are you neutral? Right. And so this little simple chart, see, 56% of contractors are neutral. They don't want to take a stand. They're not pessimistic, but they're also not optimistic. I was happy to see that 39% said they were optimistic about the future. And only 5% are really pessimistic about it. And interesting, that 39% is down. I think last year it was like 43%. So there has been a shift towards neutrality because pessimism didn't really increase 5%. It was that last time. But neutrality has definitely shifted. So people are standing on the fence now a lot more than they were even just last year.

SPEAKER_01 22:54

I mean, there's a good uh amount of that could be inferred from this confidence survey, especially that neutral category, because neutral to me as a a supplier in the channel. That translates to okay, I could probably as a supplier in the channel or a manufacturer could probably help boost you off the fence towards optimism um with programs, with pricing, with marketing, with you know things that may move the needle from a a channel standpoint. Yep. I'm very uh happy to see that it it's only that small five percent in the the red there. That's uh that's a good good story to tell.

SPEAKER_00 23:37

It is that is actually encouraging, right? And it again it didn't really shift from last year. So interesting little finding for sure.

SPEAKER_01 23:46

It is, and I'll reiterate by saying the idea that despite all those variables in play last year, all the noise and chaos and all the conjecture, guys were just grinding it out. The operators were operating and and just you know keeping their heads down and and staying in the business. Um I think probably safe to say that that's gonna be the same approach this year.

SPEAKER_00 24:09

The only way you get a good customer experience is there's two components, period. Two components, all it takes. You got to have the right pop, the right processes for people to execute. So if you got your right processes in place, you got the right people executing those things, you'll get that smile on the customer's face that you're trying to get. Because presumably customer experience means they're happy, right? They're they're in fact they're beyond happy. They're ecstatic to the point that they're like, I why would I choose anyone else? You guys take care of me every time I need taken care of. One thing that I will say, we actually also saw it in a survey, there is a significant appetite for lateral expansion within the HVAC industry. And when I say lateral expansion, I'm talking about they want to add other trades to their business because they already have the relationship with the homeowner. And they see there's they're just a whole lot of different home services that are now starting to come together under one umbrella. Uh, and a lot of HVAC contractors, because I mean, think about it, HVAC contractors, we touch plumbing in many ways, right? We're we're involved in condensate drains, we do piping, we do the same kind of piping that a plumber does. We just do it with a refrigerant pipe instead of gas pipe. And some HVAC jurisdictions allow you to do your own gas piping. Some require a plumber to do the gas piping or a pipe fitter. Um, we always are working with high voltage, we work with control voltage. We look, you know, so we're electricians as well. So it's not like it's a far, you know, it's a big far push to slide into those markets and and cross-train some techs to be able to do that kind of work, um, or just you know, hire or tuck in an electrician or a plumber into our business. And, you know, those economies are are definitely going to be at play as well. And the group that we had last week in Scottsdale, uh, several of them were multi-trade contractors. And there, it seems that their optimism was there because, yeah, well, yeah, it's it's HVAC is dropping off, but we're really kicking in on our plumbing and on our on our on our kitchen renovations or our bathroom renovations and stuff like that. So we heard a lot of that kind of comment last week as well. Interesting.

SPEAKER_01 26:31

Well, maybe diversified is the way to survive uh an unusual HVAC season, right?

SPEAKER_00 26:39

And so I think there's gonna be a lot of that.

SPEAKER_01 26:41

Well, with this group of respondents and kind of that neutral to optimistic take, how many of these respondents' businesses are diversified in that fashion?

SPEAKER_00 26:53

And so a hundred percent of our respondents in the survey are HVAC contractors. So that was kind of the foundation for the survey was their HVAC contractors first. But out of that 100%, 30% of them also offered plumbing. And that's actually up 2% from 2025. And electrical last year when we did it was 18% of contractors were involved in that. Now it's up to 21%. So there's an increase in plumbing and electrical. The whole home performance or whole house performance, that staged pretty steady insulation. Actually, I think that crept in. I don't know that we had a whole lot of people listing insulation as a service they were adding. Solar has pumped up a little bit. So that's a pretty sizable chunk of people right now that are already multi-trade. So if it gets slow in one area, next thing you know, a plumber's doing maintenance on HVAC, right? So it's, I think the cross-training, and that does bring up another point, is how how important it is for the contractor to take personal responsibility to actually spin up some form of training for their people. Don't wait for the trade schools to do it for you. They'll do it, but they're going to grow up some young ones, right? Typically, um, have a process in place with your business where you are constantly training, and especially if you're multi-trade, cross-training people, because I mean you think about it, the only thing different from a plumbing business and an HVAC business is the object of service, right? The cardboard box, when the product is in the cardboard box, they look the same, right? So managing inventory, moving things from point A to point B, the logistics, having service vehicles, installation vehicles. I don't care if you're a plumber, electrician, heating and air, you've got all those vehicles. You have a need to dispatch people, you have a need to collect, you have a need to price work. The only thing that changes is the object of service. If we're working on a plumbing system, I need different tools and I need different skills, right? All of the fundamentals of the business, of the actual home service business, are the same. I just need to change what I have in my truck in terms of product and knowledge and the tools to be able to do it with, right? So um it's a it's a it's really a simple, easy pivot from a business standpoint. You just have to have a have a plan for doing that.

SPEAKER_01 29:30

Yeah. But hey, look, fraction of the customers needed to conquer that mountain, right? So you've got goodwill built into these businesses, you've got plans to to diversify if you're gonna survive a heavy repair summer. Um, for those that are ready to to jump ship or better said, uh, you know, pass the baton, are they looking at private equity still? Are they looking at really who who do they want to sell to most? Is it pass it on to the nephew? Is it pass it on to the employees? Um do we do we have a data point for this?

SPEAKER_00 30:06

Yeah, let's do this in two steps. So I've got a chart that you can share right now on uh what are the what are the people thinking about going forward? So the light blue is the executive management, the dark blue is middle management. And when we ask them, you know, what are you looking for in the near future? Well, you can see a good number of them want to expand their service area. So another way to diversify is to expand your service area, right? That's actually uh the number one thing most guys and gals mentioned to us. But entering new verticals, interesting on the entering new verticals. So 26% of the leadership team, the executive management team, said that's on the table. So one in four contractors in the HVAC industry are saying, I'm going into something. Now it doesn't mean they're going into all of them. So they're not doing like all solar or electrical plumbing whole house. They're saying I'm gonna be going into something. We did not ask them to specify, we just said a new vertical. Selling the company, check that out. Interesting little challenge between the two or the two groups of people. Middle management said, no, man, we ain't selling. And owners are saying, Oh, yeah, hell yeah, we are too. We're just not gonna tell you about it. And then if we look at it by by business age, check this out. So this is by business age. Younger businesses, zero to 15 years old compared to older businesses. Younger businesses say, and we're gonna expand our space. Older businesses, yeah, we're gonna expand, but not quite as much. Entering new verticals. Younger businesses are saying, yep, older businesses kind of standing still, selling pretty even, but none of these, the older businesses are saying, I'm not doing anything. I'm just gonna sit still. That's interesting, right? When you start thinking about, okay, how does that translate into long-term good behavior, right? Um I I was I was a little bit uh surprised to see I'm not gonna do any of that. I'm not selling the business, I'm not expanding the business, I'm not entering, I'm not expanding my service area, I'm I'm happy where I am. That's really what that's saying. And that's you know, it's kind of scary. It's kind of scary in a way. I mean, there's a whole many, so many changes going on right now that, you know, if you're if you got your head in the sand saying, I'm just gonna sit here and ride the storm out, um, this is probably not a time to think like that. This is probably time to at least be looking at some of these things, right?

SPEAKER_01 32:40

Yeah, you gotta think strategy at some point right now, right here, for sure. All right. I think we've got time for maybe one more insightful data point. What's the the story on who do you sell to?

unknown 32:56

Yep.

SPEAKER_00 32:56

All right. So another question that we asked was who would you sell to? And I wanted to show the top part of this first. Most contractors would rather sell their business to another HVAC company or to private equity than keep it in the family. Isn't that interesting? As companies get bigger, they're much more likely to consider private equity, while smaller companies are more open to selling to another contractor. Very few large companies plan to sell to employees or family, which shows that as the business grows, owners start thinking more about big financial deals than personal handoffs. So check that out. So 57%, and this is all combined. 57% said I would sell to another HVAC company. 53 said I would sell to a private equity. 49, a company in a different vertical. Interesting. So they got an electrician that shows up and wants to buy their heat and an air company. They'd be interested in that, which is kind of like another HVAC company, right? Current employee, only 37%. Another person in the company, 37%. Uh employee stock ownership. I would have expected that to be a little bit larger. I actually like that strategy. And then 16% to a family member. What does that say about our opinion of this industry as owners? My goodness.

SPEAKER_01 34:22

Yeah, interesting nonetheless. Um another HVAC company is probably the one that I would have would have expected, especially if you've got a company that's promoting and generating goodwill. You want another operator to take that over, not a banker.

SPEAKER_00 34:40

Exactly right. If you if you have somebody in the local area that kind of thinks the way you think, it makes more sense to sell to them personally than to somebody who really is just looking for recurring monthly revenue. That's their focus, right? It's like, yeah, I'd rather personally, uh just personally, I would rather sell to another HVAC company that had similar, similar culture, similar, similar ideas to what we, you know, what we were trying to express to our homeowners. Because it's not just about selling the business. I mean, you're talking about impacting all your employees' lives, you're talking about impacting all your customers' lives. And if you really care about all of them, I mean, you really do need to think it through a little further, right? And unfortunately, we see that happening in in roll-ups and in even in PE firms. We've already had one PE firm go upside down and you know, kind of crashed and and burned, and and it's it probably won't be the last, just like it won't be the last time a one trucker shuts down their doors, too. So business is business and it's hard, it's not as easy as people think.

SPEAKER_01 35:47

Yeah. Well, thank you for sharing this this survey. And that was just a glimpse. Um, so if somebody wants to to access the whole thing, can a distributor or a banker or anybody acquire this for for a small yep, yep, absolutely.

SPEAKER_00 36:03

So yep, so they can go to uh uh mycontractoruniversity.com and you could just do a search for the survey. I think there's actually a button on the front page, even that's that'll take you there. And if you're uh actually if they're a contractor university member or a distributor university member, if they're a member of either of those organizations within EGIA, they get they get a copy for free. In fact, what I could do, Scott, is I could I could get you a QR code if you want to, and then people could just scan it on your podcast there.

SPEAKER_01 36:33

Perfect.

SPEAKER_00 36:34

If they're not just listening, if they are looking at it, they could they could actually do it that way. So we'll we'll uh we'll get you that information for the link.

SPEAKER_01 36:44

I like it. All right, we're gonna play a game here. Um we're gonna call it rapid fire quiz for David around current events in the industry and just simple questions. Um we'll start with an easy one. Um Parstown is the best place to buy all your parts, uh genuine OEM parts, true or false.

SPEAKER_00 37:05

Uh absolutely true.

SPEAKER_01 37:07

Yeah, see, told you it was an easy one. All right, demand right now, cooling off or normalizing based on really big bubble from COVID, small bubble kind of leading into A2L. You know, where do we think demand will be this summer?

SPEAKER_00 37:22

Yeah, I think the uh the big deal is is gonna be realistically. I mean, this is this is repair replace time. So the big demand's gonna be in fixing what's out there, I'm afraid.

SPEAKER_01 37:37

Yeah, for sure. Down that same line, you've got an uptick of young people entering the trades. Uh trade schools are starting to to have an influx um as they get pushed out into the market. Productive, unproductive, or we'll see.

SPEAKER_00 37:57

Um I think there's a good opportunity to get them very productive very quickly. We've got lots of new technology. There's online training that's available. There's uh a lot of contractor uh operated trade schools that are uh that are out there. Uh just I I think I think we'll figure out how to get them productive pretty quick.

SPEAKER_01 38:20

Yeah, I'm I'm right there with you. I think access to information is changing, which makes them more productive right out of the gate compared to to previous decades. Um all right. Big news last week. There were two big articles. Um one was SRS and Mingledorfs announcing that SRS would acquire Mingledorfs. We know that SRS is a big box, has a big box parent with uh an orange label. What does that do to the industry? What does that do to the channel? Um you know, I thought distributors were off limits.

SPEAKER_00 38:56

Interesting, um, interesting challenge. Uh that big orange box, uh, just a little side note. When I was right out of college, I put the very first inventory control system in the very first Home Depot in Marietta before they were Home Depot. Uh pretty, pretty interesting little history there. Um it's gonna be a it's gonna be an interesting situation. I mean, I'm very, very, very, very, very uh happy for the folks at at Mingledorfs that I'm sure not that they needed the money, but uh I'm sure that there's a there's a nice payday associated with that for the owners of Mingledorfs. Um but it's uh it's an interesting, it's an interesting situation. Obviously, Home Depot has been around for a while within the industry. Um a lot of the people that I know have either current relationships with them as a uh as a contractor or they've tried the Home Depot Lowe's Costco kind of approach for lead generation. And it's a different world. It's definitely it's just a different group. And I'm afraid that the majority of those contractors are contractors that are, and I say the majority because I'm I was just amongst some last week that are definitely top-end contractors, very qualified, and they have figured out how to take those kind of relationships and make them work. But the the really interesting question is I mean, I think I think uh Mingalors has like 47 locations across five states. And you know, is this the end of their acquisition from Home Depot or is this the first? You know, so it's like and then what happens when they decide they want to buy one of these PE groups that says, oh, now we got the whole thing, right? We got contractor, we got distribution, we've got the name brand, we've got financing already. I mean, it's like that's a that's gonna be a uh that's a podcast by itself. That's gonna be some real messy things going on here pretty quick. I don't know, as a contractor, whole I mean, uh uh Mingledorf's, I promise you, I've spent more money with Mingledorf's than I have ever spent with Home Depot, and I've spent a lot with Home Depot, but uh, you know, as an as a contractor, we spent a ton more with Mingledorf's than we did with Home Depot. So it's gonna be a win for Home Depot. I know that.

SPEAKER_01 41:26

Yeah, I think one of the interesting comments I heard over the last week is now Watsco has a little bit of competition if you've got a group like Home Depot coming into the space. And I think your question of is this you know one and done, or is this a a start to a long-term strategy of acquisition? That'll be the the tell tal, right? Um, all right.

SPEAKER_00 41:50

Last one it's interesting too, just real quick, because you know, there's other manufacturers that have certainly been acquiring distributors, so we've got it coming from the top end down. I mean, Daikon's been buying distributors, Ream's been buying distributors, um, Linux, of course, has always owned their own distribution channel. Um, you know, Carrier, when CE got started, Carrier Enterprise, you know, Carrier was involved in buying distributors, which now, of course, is pretty much all Watsco. But it's uh it's interesting when you get a retailer, you know, a big box store saying, yeah, and of course they've always had wholesale distribution. They they you know, they bought a distributor back years ago that they got out of it, we thought, but I guess they figured out that it was probably a good idea that just wasn't ready for the good idea. And maybe the player was different, but for sure, the uh it's gonna be an interesting strategy.

SPEAKER_01 42:48

It'll be fun to watch either way. Um we'll we'll get our popcorn. All right. The other big news story last week that came out. Um, I think six or seven manufacturers named in a class lax uh class action for price fixing. Um is that even possible these days? Can can OEMs collude to a point of of driving up price, you know, three steps away from the factory?

SPEAKER_00 43:15

So you tell me.

SPEAKER_01 43:17

Yeah, don't know. Uh um also wanted to grab the popcorn and and watch play out. Um that's an idea for me probably a little bit of hoopla more than it is anything.

SPEAKER_00 43:28

So yeah, uh it's an interesting situation because we have uh well, I'll tell my grandfather. I know that there are contractors in neighborhoods that might have done that in the past, where there was, you know, Friday morning breakfasts and people would get together and they'd say, Hey, are you pretty busy? Yeah, okay. Well, there's this big job coming up. You don't have time to do it. Nope. Okay, can you give a complimentary bid? So I'm not saying that happened in the past, but you know, it probably didn't happen that much today. But you know, it is interesting, you know, and why is it? I Always this always bugs me. You know, everybody talks about price fixing, but yet if you drive down the road and you look at the gas prices on everybody's sign, it's like, wait a minute, that's all within a penny or two of each other. Is that price fixing? I mean, come on. Do I do I have to put it out there so everybody can match my price? I mean, what's the deal? And and of course, that's what everybody's trying to push for us with contractors are saying, hey, you need you need to start putting all your pricing up on the web so everybody knows what you're charging. It's like, really? Uh how do I don't even know what the job entails yet? How do I know what the price is going to be till I look at the job? Anyway, a whole nother podcast right there, Scott.

SPEAKER_01 44:38

The idea that you just shared about putting pricing forward for HVAC is I feel like that's a a dog that doesn't hunt. It's a system, right? It's not selling a refrigerator. Um, if we were selling refrigerators and dishwashers, you can put the price online. If you don't have a good understanding of what that building envelope looks like before you get there, how are you gonna do that? Right.

SPEAKER_00 45:04

Um so that's just gonna be misled. Yep. You can give you can give some bull, you can give some ballpark numbers, but you there's no way you can be exact. And we used to do it, we used to get them ballpark numbers. We say, yeah, it's gonna be somewhere between back in the day, yeah, somewhere between 3,500 and 15,000. What? That's as big a ballpark as I can give you, because I really don't know until I see the job. And uh, you know, if you if you want a $3,500 job, we're probably not the right company for you anyway, because we won't install a piece of equipment on a s on a duck system that's not capable of doing the job that it needs to do. And our experience says that that's the case most of the time. So we're gonna fix it, and it's gonna cost money to fix it.

unknown 45:51

Indeed.

SPEAKER_00 45:52

Can't know till we say it.

SPEAKER_01 45:54

We got to close it out. Um, but it's been fantastic catching up. Appreciate all the the nuggets of gold from the contractor survey again to everybody that was listening. Uh, that was definitely just a glimpse. Uh, that thing is is much more meaty than what meets the eye on this podcast. So check it out. Reach out to us, reach out to EGIA, get your hands on it. Um, may help you define what the future looks like for this next cooling season. David, thank you. Until next time.

SPEAKER_00 46:26

Appreciate it, Scott. Look forward to next time.