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How a residential HVAC company improved gross margin by 8 points and added $140K profit without changing revenue

Budget·$5K+
Timeline·10 weeks
Stack·ServiceTitan · custom pricing engine

Flat pricing year-round with no adjustment for demand. Peak season (May-August) had 6-week install backlogs but jobs were priced the same as November shoulder-season work. Gross margin had been flat at 32% for 3 years despite revenue growth.

Seasonal pricing model in ServiceTitan with demand-tier rules: base rate, +12% peak tier (May-Aug), -5% shoulder tier (Nov-Feb). Utilization thresholds — when the schedule exceeds 85% capacity, rates automatically step up 5%. Automated competitor price monitoring flags when company pricing drifts more than 8% from local market rate. Owner approves tier changes before activation.

Gross margin improved 8 points in first season (32% to 40%)
$140K additional profit on same revenue base

Customers making emergency service decisions in July are not comparison shopping on price. The utilization trigger was critical — without it, peak pricing becomes a fixed premium that erodes trust. The competitor monitor is the system health check: if the market moved and the company had not, the model would produce sticker shock. Owner approval before any tier change kept every pricing decision in human hands.


DW

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