Welcome to IAQ Series #1 The 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 environment  Review IAQ business opportunity  Review sales and marketing approaches to IAQ  Review IAQ business measurements and recommendations  Review 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 indoors  50% of this is within their home  Indoor air pollution is 2 to 5 times worse than outdoor air pollution  Health Affects  Respiratory problems  50 million Americans suffer from allergies  60% of all allergies are caused by mold  12 million Americans have asthmatic episodes yearly  Asthma has tripled in the last 20 years Indoor Health

 Biological Contaminants  Pollen  House Dust Mites  Mold  Bacteria  Viruses  Pet Dander  Combustion Pollutants  Gaseous Pollutants  Other Sources such as Radon and Asbestos Indoor Air Pollutants

 Contaminants  Spores  Enzyme Filaments  Toxic Gases  To Grow & Thrive  Dirt/Organic Material  Moisture/Humidity  Ill effects  Health  Structural Damage to Home Mold

Humidity Problems  Oversized Cooling Systems  Mismatched Indoor Coil (particularly with on high efficiency equipment) Pressure Problems  Leaky ductwork  Lack of Return Air  Poorly Designed Air Distribution System  Poorly Installed Air Distribution System HVAC Contractor Practices Affecting IAQ

Pollutant Categories

 Source Control  Equipment Cleaning  Duct Cleaning  Duct Repair  Duct Renovation  Cleaning the Air (Filtration)  Various MERV Rated Air Cleaners  HEPA Filtration Systems  Germicidal Lamps Indoor Air Solutions

 Ventilation  Fresh Air Intake  HRV  ERV  Humidity Control  Dehumidifiers  Humidifiers Indoor Air Solutions (cont.)

 Various Methods of Air Filtration  Germicidal Lamps  Various Methods of Ventilation (including HRV & ERV)  Duct Cleaning  Testing & Diagnosing IAQ Problems  Duct Repair & Renovation  Air Balancing  Other Related Trades (Home Insulation & Renovation) Applicable HVAC Products & Services

IAQ Growth Potential

 Existing Comfort Advisors  Bundled With Equipment Replacement  Separate IAQ Offer  Service & Maintenance Technicians  Accessory 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 Above  Air Testing (I.E. – AirAdvice)  Other Considerations  Pricing  Compensation Marketing Approaches

Sample IAQ Price Sheet

Sample IAQ Technician Spiffs

Separate Department or Division  Easy when IAQ is sold separately  Separate Department Income Statement  Technician Accessory Sales  Duct Cleaning  Duct Repair & Renovation  How do you handle IAQ sales that are bundled with equipment sales? Measurement Considerations

 Parts/Material20%  Labor18%  Equipment 0%  Allocated Fringe Benefits 7%  Sales Commission10%  Total Cost of Sales55%  Gross Margin45% Direct Cost Model - Duct Cleaning

 Gross Margin Percentage  40% to 50% Depending on mix of products & services  Some 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

DiscussInvolve Personnel ConcludeGet Buy-In on Decisions CommitAll Hands in Team Goal CreateIdea to reality – stuff! ExecuteAccountability to do Work FeedbackMeasurements & Report Adapt PlanAdapt as Needed – Start from the top again How To Implement

Q uestions & A nswers