How to Compete with Low-Price HVAC Companies

By HVAC Cheat Sheet Team · 3 min read

Every market has someone who will do it for less: a one-truck operator with no overhead, a new company buying market share, or a large outfit using a cheap tune-up to get in the door. You can't stop them. You can decide which of their customers you want.

Know your floor before you quote

A price only makes sense against your own costs. Work out your break-even labor rate. Below that number, every job you win costs you money, and winning more of them makes it worse.

Once you know the floor, a low competitor's quote stops being a mystery. Either they have lower costs than you, they are leaving something out, or they are losing money and don't know it yet.

Make quotes easy to compare

Homeowners comparing three install quotes usually can't tell what's different. If the only number they can compare is the total, the lowest total wins.

List what's in yours:

  • Equipment brand, model numbers, capacity and efficiency rating
  • Load calculation (Manual J), not same-size replacement by rule of thumb
  • Permit and inspection
  • New or reused line set, pad, disconnect, whip, drain and thermostat
  • Duct changes, if any
  • Nitrogen purge while brazing, deep vacuum and a documented startup
  • Manufacturer warranty registration, and who pays labor if a part fails in year one
  • Removal and disposal of the old equipment

Then give the customer a short list of questions to ask the other bidders. You don't have to say a word against anyone. If the cheaper quote includes all of it, the customer got a good deal. Often it doesn't.

Compete where a low price can't

  • Speed to answer. Many callers hire the first company that picks up and gives them a time. See how to get more HVAC customers.
  • Reviews. A steady flow of recent reviews on your Google Business Profile is the first thing a homeowner checks.
  • Showing up. A real arrival window, a text on the way, a clean job site.
  • Options. Offer two or three choices at different prices. A customer who would have said no to one price often picks the middle one.
  • Payments. Financing turns a large total into a monthly amount.
  • Staying in touch. Maintenance agreements keep customers from shopping around every time something breaks.

When to let the job go

Some customers will buy the lowest number no matter what. Chasing them means working under your break-even. Give them a fair quote, tell them what to ask the others, and move on. Some of them call back after the cheap job goes wrong.

Common mistakes

  • Dropping the price on the spot. It tells the customer the first number wasn't real.
  • Running down the competition. Explain what you do. Let the customer draw the conclusion.
  • Racing a competitor who is losing money. They may be gone in two years. Don't follow them.
  • Quoting one lump sum with no detail to compare.
  • Not tracking why you lost. Ask. If it was price every time, look at your overhead and billable hours. If it wasn't, price isn't the problem.

FAQ

Should I price match?

Only if the matched price is above your break-even and the scope of work is the same. Compare the quotes line by line first.

How do one-truck operators charge so little?

Low overhead: no office, no dispatcher, sometimes no workers' comp or proper insurance. Some are also not paying themselves a real wage. You can't match that with employees and insurance, and you shouldn't try.

Does a cheap tune-up offer work?

It can bring in calls. It only pays if the visits turn into repairs, agreements or replacements, so track what each one earns. Use the cost per booked job calculator.

Sources

HVAC Cheat Sheet is published by 90 Leads, a marketing company that works with home service businesses, including HVAC contractors.

Tools for this job

$/HR

Break-Even Labor Rate Calculator

What one billable hour really costs your shop, and what to charge for the profit you want.

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