HVAC service contracts and the project management triangle
If you’re having difficulty comparing widely differing options when evaluating HVAC service contracts, it may be helpful to use the project management triangle as a guide.
Are you familiar with the project management triangle? It’s a model that describes the relationship between three opposing constraints that impact work: time, quality and cost. It means that your choices in one area impact what you get in terms of the others. For example, if you decide you need the lowest price for a commercial HVAC service contract, that choice impacts what you get in terms of quality and/or timeframe.
The rule of thumb you’ll often hear with regard to time, quality and cost is that you can choose any two, but the contractor controls the third one. When it comes to HVAC service contracts, we find that this rule breaks down: getting the best quality for the lowest cost is not a realistic option, no matter how much time you throw into the equation. However, understanding the relationship between these three constraints for HVAC service contracts is a useful exercise for focusing your priorities and clarifying what you’re getting for your money.
HVAC service contracts: what’s most important to you?
We’d all love to get the fastest service and best quality work for the rock-bottom price. Experience has probably already told you this is unlikely, to say the least. A vendor that cares about its customers (like Arista!) will certainly do everything they can to give you the best balance of all three for your HVAC service contracts. Yet there are opposing relationships between time, cost and quality that are unavoidable. Here’s more about how that works.
Fast service (TIME)
For HVAC service, time is often a critical factor. Your business productivity suffers when climate control is not working as it should, and you could even be losing customers. When shopping for HVAC service contracts, you’re probably looking for fast response time and problem resolution.
However, making time a priority does cost money for the service provider, which translates to higher prices for HVAC service contracts. That’s especially true in a large, congested urban environment like New York City. Given the unpredictable traffic and parking difficulties in the city, providing fast and reliable response time requires having plenty of trucks and technicians positioned in strategic locations.
Also, it’s not just showing up on time that you care about, is it? You want your problem fixed ASAP. That means every truck needs to carry a larger inventory of parts to minimize having to make a return visit to finish the job.
Making time the priority can also impact quality service. Doing the right thing on each job takes time and can impact the schedule; for example, when a tech discovers an unexpected problem during a routine maintenance visit. It is possible to get quality service that’s fast, but you’ll need to choose a vendor with sufficient resources to shift things quickly when needed to avoid impacting your schedule. For example, Arista not only has the largest fleet of service vehicles and technicians in the city, but we also employ dedicated drivers to deliver parts to speed up service.
Lowest contract price (COST)
Of course you’re looking to get a reasonable price for your HVAC service contracts. However, there are going to be trade-offs in both time and quality for going with the lowest possible price:
- Getting a rock-bottom HVAC maintenance plan likely means your technician is spending less time on the work and skipping important steps. The time it takes for a preventative maintenance visit can be telling. Are they in and out in 15 minutes? If so, the tech probably gave your unit a quick inspection and changed the filters. If it’s more like an hour or two, your maintenance included other critical tasks like cleaning coils, adjusting fan speeds, checking electrical connections, and clearing drains. Skipping these steps costs less now, but will likely cost you more in the long run in repair bills.
- A cut-rate vendor doesn’t have the funds to invest in ongoing training for technicians, or an extensive parts inventory. That means repairs frequently take multiple visits. Even worse, inexperienced techs fail to catch failing parts that lead to expensive system failure down the road.
- There are different levels of service contracts covering everything from basic maintenance to all-inclusive HVAC service contracts covering parts and labor for repairs. You may find that more coverage better meets your needs for predictable costs.
Here’s some valuable advice about choosing the lowest bidder:
“It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.” ― John Ruskin
Learn more: HVAC Service Contract Pricing Guide
Best outcome (QUALITY)
What outcomes are you expecting from your HVAC service contract? To keep the equipment running reliably? Avoid breakdowns that can disrupt business? Manage expenses by avoiding unexpected costly repair bills? Reduce energy expenses? Prolong the life of your equipment? Your HVAC service vendor’s goals should be the same. Achieving those goals requires quality service from knowledgeable professionals.
Getting quality maintenance and repair service impacts your cost, and not only because it takes more time. There’s also the expenses associated with using better quality parts, tools and equipment, and with hiring and training knowledgeable technicians. All of those costs give you higher quality work that provides the outcomes you need.
It’s also important to realize that quality service is about more than the on-site service you receive with HVAC service contracts. Quality includes helpful communication about your appointments and the status of your equipment, and a streamlined billing process that saves you time and headaches. Quality can even extend to helping you achieve predictable service expenses and planning for future capital equipment expenses.
If you have questions about optimizing HVAC service contracts based on your priorities, we’re happy to advise you. Please reach out to us for a candid conversation.