Welcome to IAQ Series #1The IAQ Business Model

Your Hosts for Today’s Conference are:Gary Elekes in Nashville, Tennessee

Gary Oetker in Plano, Texas

Conference Objectives:

Review IAQ fundamentals in regards to sources of indoor pollution, solutions to IAQ problems and the business opportunity this represents.

Review the elements of the IAQ Business Model.

Review IAQ fundamentals and the IAQ business environmentReview IAQ business opportunityReview sales and marketing approaches to IAQ Review IAQ business measurements and recommendationsReview implementation of IAQ business model

Agenda for Conference

Yesterday Loose Homes & Natural Ventilation IAQ Solutions – Total Comfort & Duct Cleaning

Today Energy Conservation / Tighter Homes Pressure Problems In Home New Technology & Improved Standards Growing Concern About Liability & Litigation

The Future New Construction Techniques Whole House Approach to IAQ Opportunities for Contractors to Grow

Indoor Air Quality

Americans spend 90% of their time indoors50% of this is within their homeIndoor air pollution is 2 to 5 times worse than outdoor

air pollutionHealth Affects

Respiratory problems50 million Americans suffer from allergies60% of all allergies are caused by mold12 million Americans have asthmatic episodes yearlyAsthma has tripled in the last 20 years

Indoor Health

Biological ContaminantsPollenHouse Dust MitesMoldBacteriaVirusesPet Dander

Combustion PollutantsGaseous PollutantsOther Sources such as Radon and Asbestos

Indoor Air Pollutants

ContaminantsSporesEnzyme FilamentsToxic Gases

To Grow & ThriveDirt/Organic MaterialMoisture/Humidity

Ill effectsHealthStructural Damage to Home

Mold

Humidity ProblemsOversized Cooling SystemsMismatched Indoor Coil (particularly with on high efficiency equipment)

Pressure ProblemsLeaky ductworkLack of Return AirPoorly Designed Air Distribution SystemPoorly Installed Air Distribution System

HVAC Contractor Practices Affecting IAQ

Pollutant Categories

Bioaerosols Volatile Organic Compounds (VOC)

Particulates

Source ControlEquipment CleaningDuct CleaningDuct RepairDuct Renovation

Cleaning the Air (Filtration)Various MERV Rated Air CleanersHEPA Filtration SystemsGermicidal Lamps

Indoor Air Solutions

VentilationFresh Air Intake HRVERV

Humidity ControlDehumidifiersHumidifiers

Indoor Air Solutions (cont.)

Various Methods of Air FiltrationGermicidal LampsVarious Methods of Ventilation (including HRV & ERV)Duct CleaningTesting & Diagnosing IAQ ProblemsDuct Repair & RenovationAir BalancingOther Related Trades (Home Insulation & Renovation)

Applicable HVAC Products & Services

IAQ Growth Potential

Existing Comfort AdvisorsBundled With Equipment Replacement Separate IAQ Offer

Service & Maintenance TechniciansAccessory Sale

Dedicated IAQ Sales People & Installation People

Sales Approaches

Marketing to Existing Customers (service strategy)Technician Set Sales Leads Direct Marketing to Customer Base

Acquiring New Customers (advertising strategy)Conventional Advertising & Direct Marketing

Special Offerings Applicable to Both AboveAir Testing (I.E. – AirAdvice)

Other ConsiderationsPricingCompensation

Marketing Approaches

Sample IAQ Price Sheet

IN D O O R A IR Q U A L IT Y O P T IO N S

R e t a i l P a c k a g e M o n t h ly In v e s t m e n t P A C K A G E 1 – B A S IC D U C T C L E A N IN G $ 2 1 2 1 .0 0 $ 1 8 0 3 . 0 0 $ 3 6 .0 6 P M A C 2 0 C H I E F F IC I E N C Y M E D I A A IR F IL T E R U V L IG H T P A C K A G E 2 - D E L U X E D U C T C L E A N IN G $ 2 8 7 2 . 0 0 $ 2 4 4 1 .0 0 $ 4 8 .8 2 H U M ID IF I E R P M A C 2 0 C H I E F F IC I E N C Y M E D I A A IR F IL T E R U V L IG H T P A C K A G E 3 - P R E M IU M D U C T C L E A N IN G $ 3 3 7 1 . 0 0 $ 2 8 6 5 . 0 0 $ 5 7 .3 0 H U M ID IF I E R E L E C T R O N IC A IR C L E A N E R ( A P R I L A IR E 5 0 0 0 ) U V L IG H T P A C K A G E 4 - S U P R E M E D U C T C L E A N IN G $ 3 8 4 1 . 0 0 $ 3 2 6 4 . 0 0 $ 6 5 .2 8 H U M ID IF I E R P U R E A I R ( P C 0 2 0 ) O R A M A IR C A R E 4 0 0 0 H V H E P A F IL T E R

IN D IV ID U A L O P T IO N S M u lt ip le i t e m s d is c o u n t o f 1 5 % m a y b e a p p lie d to c u s to m p a c k a g e s . H U M ID IF I E R $ 7 5 1 . 0 0 D U C T C L E A N IN G P E R S Y S T E M U V L IG H T $ 5 9 5 . 0 0 U P T O 1 5 O P E N IN G S $ 5 8 1 . 0 0 E L E C T R O N IC A IR C L E A N E R $ 1 ,2 5 0 . 0 0 U P T O 2 0 O P E N IN G S $ 6 9 0 . 0 0 P M A C 2 0 C H I E F F M E D I A A /F $ 8 3 6 . 0 0 U P T O 2 5 O P E N IN G S $ 7 6 4 . 0 0 P U R E A I R ( P C 0 2 0 ) $ 2 ,4 0 0 . 0 0 U P T O 2 7 O P E N IN G S $ 9 4 7 . 0 0 A M A IR C A R E 4 0 0 0 H V H E P A F I L T E R $ 2 ,4 0 0 . 0 0 O V E R 2 7 O P E N IN G S Q U O T E

H U M ID IF IE R P M A C 2 0 C U V C L E A N S E R H E P A F IL T R A T IO N P U R E A I R

Sample IAQ Technician SpiffsIAQ and Accessories Spiff Schedule 11/04/03

UV Cleanser/single $125.00 UV Cleanser/dual $100.00 Dynamic Air Cleaner $50.00 4” Pleated Filter (MF120) $50.00 Duct Cleaning & Sanitizing $50.00 Air Handler, Furnace or Condensor $50.00 (10 SEER Excluded)

Plus Agreement $10.00 Addt’l Plus Agreements $5.00 Cool Cap $10.00 Surge Protector $10.00 Sales Lead $50.00 plus 1% of system only sale. (Complete System)

Complete Duct System 10% (Not Misc. Duct Work/Repair)

Equiguard 6%

Separate Department or Division

Easy when IAQ is sold separatelySeparate Department Income Statement

Technician Accessory SalesDuct CleaningDuct Repair & Renovation

How do you handle IAQ sales that are bundled with equipment sales?

Measurement Considerations

Parts/Material 20%Labor 18%Equipment 0%Allocated Fringe Benefits 7%Sales Commission 10%Total Cost of Sales 55%

Gross Margin 45%

Direct Cost Model - Duct Cleaning

Gross Margin Percentage40% to 50% Depending on mix of products & servicesSome IAQ products cost as much as the HVAC equipment

Gross Margin Dollars Per Day$300 to $750 per IAQ Technician (depending on mix of products and services

Business Recommendations

Discuss Involve Personnel

Conclude Get Buy-In on Decisions

Commit All Hands in Team Goal

Create Idea to reality – stuff!

Execute Accountability to do Work

Feedback Measurements & Report

Adapt Plan Adapt as Needed – Start from the top again

How To Implement

Questions

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Answers