The latest Contractor of the Future Study from Farmington Consulting Group, conducted in partnership with the Air Conditioning Contractors of America (ACCA), highlights the operational practices shaping performance and profitability across the HVAC industry. The research reflects input from more than 1,000 contractors of varying sizes, markets, and business models nationwide.
According to T.J. O’Connor, president of Farmington Consulting Group, the average technician wage reported by contractors is $33 per hour, with roughly half of companies paying hourly and half using hourly plus bonuses or spiffs. Respondents offering technician incentives reported slightly higher average service ticket sizes. The national average service ticket is $422, with commercial contractors reporting higher figures than residential firms. Across all respondents, the average net profit is 6%, below the 10% threshold the researchers identify as necessary for sustainable growth.
One of the clearest findings centers on proposal strategy. Contractors presenting four or more proposal options increased their close rates by 10 percentage points compared to those offering fewer choices. These contractors also reported a higher share of premium equipment sales, rising from 26% to 42% of total sales when more options were included.
The study also examines pricing methods for installation and service work. Many contractors continue to use simple multipliers, but the report identifies divisor pricing as the most effective method for installation because it accounts for overhead and targeted net profit. For service work, flat rate pricing proved most effective due to its ability to incorporate technician productivity and provide customers with upfront pricing. Contractors using flat rate pricing reported average net profit of 7%, compared to 4% among those using other methods.
Marketing investment emerged as another differentiator. The average contractor allocates 6% of annual revenue to marketing, though those investing at least 12% reported higher profitability and greater likelihood of margin growth. Contractors noted a wide range of lead sources, from Google Business profiles and paid digital ads to outbound calls and text campaigns.
The study also reports growing adoption of field service management software, with 56% of contractors using platforms such as ServiceTitan, Housecall Pro, FieldEdge, or Service Fusion. Younger and larger contractors lead adoption rates. However, many contractors rely on only a fraction of available features, using the systems primarily for scheduling and invoicing rather than for marketing, inventory management, or proposal tools.
The full Contractor of the Future report, offering a deeper analysis of these trends, will be released next week to ACCA members.
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