The Heating, Air-conditioning and Refrigeration Distributors International (HARDI) replaced its annual year-end summit with an all-new virtual format in 2020. The virtual conference took place Oct. 7-9, bringing in 349 wholesale-distributor attendees from 127 different member companies, and a grand total of 695 attendees from 270 member companies.

The event kicked off with a presentation from Shark Tank’s Kevin O’Leary, who discussed how his companies pivoted operations due to COVID-19 and used his expertise in entrepreneurship, finance, economics and business to answer live questions from HARDI members.

When speaking on addressing how his companies have worked through the challenges of 2020, O’Leary focused heavily on customer service.

“The number one thing I tell all of my CEOs is ‘customer service, customer service, customer service,’” he says. “Maintaining customer relationships is so important because it protects price, margin and growth. No one leaves a great relationship with great customer service, even if it costs them a little more.”

One question that came up several times was how to handle working from home into 2021. O’Learly noted that in his companies, nearly 15% of employees say they want to continue working from home.

“I’ve had a great outcome from the past eight months while my offices were closed,” he says. “When deciding how to continue with this, I have to ask myself, ‘Do I know more than my employees do? Should I be forcing my will on them as they tell me they’re doing a better job with the lifestyle they want?’ It’s hard to make that decision, but personally, I have to allow it.”

2020 State of the Channel

An important piece of the annual HARDI Summit, the State of the Channel, took place on day two of the virtual event. The State of the Channel began in 2019, focusing on making wholesale-distributors the channel of choice for HVACR manufacturers and contractors. Through the State of the Channel research, HARDI established the benchmarks and methodologies necessary to track the size of the wholesale channel over time to better understand how well the group is achieving this goal.

The 2020 State of the Channel was presented by Tim Fisher, market intelligence, HARDI, and Anirban Basu, chairman and CEO, Sage Policy Group.

The report finds that product availability remains wholesale-distribution’s top concern. According to the results, 26% of contractors completing the HARDI survey in 2020 stated the effects of COVID-19 — primarily the shortage of HVACR equipment — led them to purchase from a different distributor or channel.

Another note from the survey shows how effective inventory and supply chain management are critical to the future of distribution. HARDI notes that mismatched supply and demand created widespread product shortages, and on average, distributor revenues dropped 5% due to inability to meet demand.

The 2020 State of the Channel also pointed out that demand is mostly inelastic; as people tend to cut back on spending when the economy suffers, they still spend on the products they view as a necessity, such as HVACR equipment.

More beneficial speakers

An exciting closing keynote from Jim Donald, the former CEO of Starbucks, rounded out the event on Dec. 9. Donald reinforced the importance
of customer relations from your front-line employees.

“Sam Walton, the founder of Walmart, once told me that customer relationships will be made or broken by the front line,” Donald explains. “Treating front-line employees with respect will change your customer experience for the better. Sam taught me the importance of never being bigger than the front line.”

Donald went on to discuss the importance of consistent communication in business. “For you as a leader to make a difference in your company, you have to commit to short, daily communication,” he says. “A short video, email, text or hand-written note will relay the messages to your team that you want your customers to receive.”

Association news and updates

Also on day three, HARDI announced its plans for the next conference, which will take place in-person at Palm Desert, California at the JW Marriott Desert Springs, Dec. 4.

Four new members of the Board of Directors were also announced: Loran Liu, Standard Supply & Distributing Co., Brian Blaushild, Famous Enterprises, and Michael Gallagher, Design Air, are all new directors while Jim Luce of Luce, Schwab and Kase was named board chair.

“The addition of Loran, Brian, and Michael is the latest achievement of the governance model installed by the Board in 2018,” says HARDI CEO, Talbot Gee. “This year was perhaps our most impressive set of candidates and Loran, Brian and Michael bring unique talents and experiences specifically sought by our nominating committee. Their diverse skill sets will make immediate impacts on the next stage of HARDI’s strategic direction and growth, and our efforts to further wholesale distribution’s share of the HVACR channel.”