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WHAT WE CAN LEARN

I was reading an article recently on how the HVAC industry could benefit from some of the more recent web-based pricing models. For me, this is not only exceedingly accurate, but it stopped short. This model truly applies to all energy consuming systems in the realm of engineering and facilities management.

Flat-rate pricing and short term contracts, versus performance contracting vis-a-vis onerous 5-to-10 year agreements which often outlive the executives who found the company, management teams, and the company itself in sight of mergers and acquisitions, are in my mind, the most poignant. Our customers want to not only make energy management services and systems a fixed, predictable line item, but more importantly, apply that concept to their monthly energy spend as well.

This is why fixed pricing and short-term agreements work best for the entire value chain. The customer receives a far more acceptable set of engagement terms and options, and the vendors (and subsequently, subcontractors) are held to a higher standard. Delivery of original terms and commitments can be measured by the customer monthly, and acted upon when necessary, especially in the event of poor performance. This enables rapid, almost real-time response – few companies can afford anything less.

All the best,

Carlos Diaz