The Air Conditioning Contractors of America (ACCA) partnered with Farmington Consulting Group to survey more than 1,000 HVACR contractors across the country about their business practices, profitability, and operations. TJ O’Connor, president of Farmington Consulting Group, presented the initial findings during a December webinar.
ACCA contractor members can access both the complete report and webinar recording here.
Key highlights
- Four or more proposal options increase close rates by 10% and shift premium equipment sales from 26% to 42%
- Contractors allocating at least 12% of revenue to marketing see net profits jump from 5% to 9%
- Offering financing doubles the percentage of financed sales (35% vs. 17%)
- By 2027, 62% of contractors will have adopted press fittings over traditional brazing and soldering
Give customers more choices
O’Connor called this finding “low-hanging fruit” for contractors. The data shows contractors who present at least four options see their close rates jump by 10% compared to those sticking with the traditional “good, better, best” approach.
Options should include various:
- Equipment efficiency levels
- Payment plans
- Indoor air quality add-ons
- Warranty packages
When contractors offer four or more options, their premium equipment mix climbs from 26% to 42% of total sales. “If you don’t offer something to a customer, you have zero chance of making that sale,” O’Connor told attendees.
Pricing methods and marketing investment matter
Many contractors still use multiplier pricing, but this method doesn’t cover all costs, particularly labor.
- For installation work, divisor pricing accounts for overhead and operational costs.
- For service calls, flat rate pricing works best — contractors using this method report average net profits of 7% compared to 4% for those using other methods.
The average contractor spends 6% of annual revenue on marketing and advertising. Contractors who invest at least 12% see their net profits jump from 5% to 9%.
Top lead sources include:
- Google Business profiles
- Company websites
- Paid digital ads
- Outbound calling and text messaging
Technology and financing drive results
Fifty-six percent of HVACR contractors now have field service management software, but most underutilize it. Many treat their system like “a glorified QuickBooks,” O’Connor said, using it primarily for invoicing rather than exploring built-in tools for marketing automation, inventory management, and sales proposals.
On financing, contractors who offer it on every single job finance 35% of their sales versus just 17% for those who offer it selectively. Close rates increase by 11% when financing is offered. Only 28% of contractors lead with monthly payments instead of the total price, but this approach significantly improves results.
Interested in integrating financing into your business? Watch ACCA Premium Strategic Partner Synchrony’s latest webinar, “Grow Your HVAC Business with Financing” here.
Press fittings adoption accelerates
One surprising finding: 41% of contractors have already adopted press fittings, with another 21% planning to switch within the next year. That means by 2027, 62% of the industry will be using press fittings over traditional brazing and soldering. The main driver is workforce development — teaching new technicians press fittings takes far less time than teaching proper brazing and soldering.
Business training matters as much as technical skills
O’Connor wrapped up by stressing that training has never been more important, but it can’t focus solely on product knowledge and technical abilities. Contractors also need education on the business side:
- Job costing
- Consumer financing
- Reading financial statements
- Employee management
ACCA offers resources in these areas, and O’Connor strongly encouraged contractors to invest in training for themselves and their teams. With the industry facing significant changes around A2L refrigerants, regulatory requirements, and new technologies, staying educated on both fronts has become essential for growth.
The full Contractor of the Future Study, with extensive data breakdowns and analysis, is now available to ACCA contractor members here.
Missed the live webinar? ACCA contractor members can watch anytime here. Not a member yet? Join now.
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