AirVersant is a marketing alliance of independent heating and air conditioning service companies (HVAC) that seeks to increase leads, sales and the quality of services of individual members. The company offers “franchise-like” benefits at a fraction of the price.
This business model works for several reasons:
Good value for target – most HVAC service companies have the potential to receive tremendous value from this service. A typical HVAC sale averages $6,000-$8,000. Lead generation and sales is the biggest challenge area for most small businesses.
B2B – Business 2 business means that the audience will be more comfortable with higher ticket sales. Especially if they add directly to revenue and profitability. Consumers are much more price sensitive and are challenged to spend over $30 on a monthly service.
Subscription – We estimate that an average HVAC company does $40K per month or $500K per year meaning that $400 per month is just 1% of their gross income. It is far less than paying a person/tech at $50K per year. Given hosting and ongoing Google maintenance, there is justification for a recurring subscription service. Four hundred dollars per month is about 1% of gross and has the potential to move the needle. In other words, I would expect churn or lost subscribers per month to be low (10% annual).
Sizable Market – There are over 100,000 companies in the industry. It is probably fair to say that most suffer from the same issues. Just a 1% penetration would provide 1000 subscribers. I would expect the closing rate to be higher but exclusivity might limit penetration.
Exclusivity – Built-in Take Away – Following the ChrisAd strategy, we plan to offer this for exclusive geographical areas. There are just over 3000 counties in the USA following a Pareto distribution. Meaning that there are likely 500-1000 good targets. Larger counties such as Los Angeles could be partitioned by township such as Long Beach, Huntington Beach and El Cerrito.
Low Revenue Bar – At a target of $500 per month it would take just 20 subscription clients to hit $10K in gross revenue. One hundred subscribers is $50K per month. One thousand subscribers is 500K per month or $6 million per year.
Cross Member Learning – There is a huge opportunity to experiment in one market and transport that to another. Google PPC advertising AB splits and masterminds can be integrated into this platform.
Streamlined Value Delivery – Much of the service and value can be delivered digitally. This means brand license, digital logo files, shared website, LinkedIn and website listings. Additional services such as Google Ads and Genie receptionist will offer more expertise.
Network Effect – I expect that happy business owners will tell others about the service – especially if they do not directly compete.
Other Vertical Expansions – If this works, the model might be expanded into other fragmented vertical markets. Plumbers and Electricians are good adjacent markets.
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