Scott Libby spent 20 years telling Maine homeowners that heat pumps don't belong in cold climates. Then his boss told him to stop selling them entirely — to protect the oil furnace and duct work revenue that kept everyone else employed. Scott gave his two weeks notice on the spot.
He went home, told his wife he'd quit, and said he was starting a heat pump company. She asked if he had a business plan. He said yes. She asked to read it. He said, “Only if you're a mind reader.”
That was October 2013. Today Royal River Heat Pumps has 36 employees, a 10-week waiting list, and Scott just closed an $84,000 heat pump job for a single home. The playbook he built to get there is specific, contrarian, and worth understanding.
Only Heat Pumps. Only Mitsubishi. 1 hour radius. No Exceptions.
Royal River does Mitsubishi heat pumps. One product category, one manufacturer, within one hour of Freeport, Maine. No oil boilers. No gas furnaces. They shut down for 10 days at Christmas.
Most contractors hear that and think: you're leaving money on the table.
Scott's answer: "Let 'em all race to the bottom. That's not where we wanna be."
The focus isn't just a lifestyle preference — it has operational teeth. His technicians have most of the Mitsubishi part numbers memorized. They know the settings, the refrigerant charge per additional five feet of line set, and the maximum line set lengths for each unit. They do Diamond System Builder for every Manual S. When you only install one manufacturer's equipment, that depth of knowledge becomes possible. When you service three or four, it becomes a liability.
Scott puts it plainly: "I don't want to half-ass anything."
Design for the Home. Not the Rebate.
The Maine heat pump market is competitive and rebate-driven. The standard formula for qualifying installs is 20 BTUs per square foot — regardless of the home.
"Doesn't matter if it's an 1830s farmhouse up in Fort Kent near Canada or a high-performance home on the coast of Freeport," Scott says. "They all get 20 BTUs per square foot. That's how you get a rebate. I'm out. I don’t wanna play that game."
Royal River does load calculations on every job. They think about distribution — which rooms will be warm, which will be cold, what temperature variance the homeowner can tolerate. Function first, aesthetics a close second. They use Amply for load calcs during site visits, and Scott's right hand salesman Shane will often show the homeowner the full calculation before they leave. Scott has gotten so calibrated from years of doing this that he'll estimate the BTU requirement for a room before Shane runs the numbers — and come within a few hundred BTUs.
That level of precision is what justifies the price. And the price is not negotiable.
Slowing Down to Win
Scott gets asked about speed to lead. His response is simple: "That's not the company I wanna work for."
Royal River's installs are currently booked 10 weeks out. By the time Scott arrives, competitors' quotes are approaching their expiration dates. He's not worried. His customer — the one he specifically designed his business to serve — isn't buying on price or speed. They're buying on trust, quality, and the certainty that the job will be done right.
"I just sold an $84,000 heat pump job," Scott says. "If I'm spending that, I don't want some guy coming in three days after I call, spending 20 minutes in the house, and trying to take my check before he leaves."
Scott identified his ideal customer profile early — and when he finished writing it out, he realized he'd described himself and his wife. Their traits, their values, what they drive, where their kids go to school. So the marketing strategy became simple: if it appeals to Scott, it will appeal to them. His daughter drew the logo at 13. They drive silver vans because every other contractor uses white.
When Royal River loses a customer to a cheaper competitor, Scott's response is: "They weren't a Royal River Heat Pumps customer."
The Bottom Line
Scott Libby didn't build the biggest heat pump company in Maine. He built the one he wanted to work for — and it turns out a lot of homeowners want exactly that too.
For contractors wondering whether focus, quality, and a 10-week waitlist can actually work as a business model: Scott is the answer.
Timestamps:
[00:00] – Introduction & Warm-up
[02:32] – Scott’s Background and Career Journey
[03:48] – Quitting His Job & Betting on Heat Pumps
[09:36] – Building Royal River from a Pickup Truck
[12:29] – Systems Thinking & Standard Operating Procedures
[17:02] – Leaving Money on The Table
[26:48] – Competing on Quality (Not Price)
[31:29] – The Two-Person Sales Process & Amply Load Calculations
[43:39] – The Training Process at Royal River
[54:21] – Advice for Contractors Wanting to Make the Shift
Transcript
00:00:00.040 — 00:00:35.560
In the early days, I met somebody that said that they were going to be the biggest heat pump contractor this side of Boston, and I was like, great, well, we're going to get along just fine. You want to be the biggest? I'm going to be the best. It was really just a joke. And it's been an ongoing joke between the two of us for the last 10 or 12 years. But I really love just I heard a man speak in 97 and he said, I don't care what you do. I don't care if you're a cardiac surgeon or a research scientist or veterinarian or janitor or an HVAC person, whatever it is you're going to do might not be the best in the world at it. And I don't know where in the room I was sitting, but it was like this arrow that just left his bow coming through the crowd headed right for my forehead, and it really just stuck. Just like that. Why not be the best?
00:00:39.680 — 00:03:15.750
Hey everyone, we've got a great episode for you today. Most of the advice you hear about building HVAC business points in the same direction more leads, faster response times, broader service offerings, more trucks. Scott Libby has spent 12 years doing the opposite on almost every one of those fronts. One brand, one geography, no emergency calls, no private equity, just heat pumps. And he shuts down on Christmas. What's interesting about Scott isn't just that he's a contrarian. It's that every decision traced back to the same question he asked himself the day he quit his last job. What kind of company do I actually want to work for? This episode is about what happens when you build a business around that question, and refuse to compromise on the answer.
And two quick plugs before we get into it. First, if this episode resonates, we've put together a free trust checklist that walks through what it looks like to compete on trust rather than on price. The link is in the show notes. And second, if you want to go deeper in person with like minded contractors, the Building Performance Association's annual conference is April 13th through 16th in Columbus, Ohio. Use discount code. NHPC-HPP. That's in the show notes for the best available rate for first time attendees. We'll be there and we hope to see you. All right, let's get on to the episode.
00:03:19.510 — 00:13:35.729
Hi, and welcome to the Heat Pump podcast. I'm Ed Smith and I'm Eric Fitz. We are co-founders of Amply Energy. Today we are super excited to have Scott Libby join the podcast. And he spent 20 years telling Maine homeowners that he pumps don't belong in cold climates. But then he quit his job and he bet everything on heat pumps.
Today, Maine has installed over 100,000 heat pumps, and Scott has probably installed a huge percentage of them. A lot of them were done badly, but Scott has built this incredible business that's doing the opposite. They've got one brand. They're super focused. No shortcuts. And they really and truly believe that quality wins.
He's now got 36 employees. He's growing 20% a year. He's on Mitsubishi. He's a national contractor advisory committee. And the Diamond Elite Technician program was actually came out of Scott's own brain. We're really excited to talk to you, Scott, and hear how you've gotten here. So Scott, welcome to the Heat Pump podcast.
Thanks, Eric. And Ed, it's great to be here. I've listened to a lot of episodes. And, you know, I'm thrilled to be joining the quality of people that you've had on the podcast. Awesome. And it's fun for me. We only live a few minutes away from each other here in Maine. So it's great to be talking to a fellow Mainer.
All right. So, Scott, you've been at this for 40 years, and you said before that you spent the first 20 telling folks that he pumps don't belong in Maine. What was the moment that that flipped in your brain around heat pumps. Yeah, I've seen so many heat pumps be installed. Not even like dual fuel systems.
Just conventional heat pumps with electric heat strips. And that gets really expensive if that's your sole source of heat here in Maine. So that was the reason for really saying they don't belong here. I think it was probably 17 or 18 years ago. I started doing a lot of the Mitsubishi then what we call the Fe units.
It's when they first I don't even think they had the name Hyper Heat. Then they were providing 100% of their capacity down to 13 degrees and ten degrees. And you can really do something with that. So I was with my last employer. I was originally hired as service manager and then moved over to sales. And then the person that they replaced me with in service really shouldn't have been a service manager because all he knew was hydraulics and we were in HVAC company.
So I ended up taking over both service and sales, and it was a fifth generation company that I was with, and I ended up having a meeting with the fourth and fifth generations, and they told me I needed to stop selling heat pumps. And I was like, why would we do that? And it was because we had 20 other people in the sheet metal shop, or doing installs and service that were relying on me to sell oil furnaces and gas furnaces and ductwork, and we did do some boilers, but they were all depending on me to sell that stuff.
And my mindset was, well, let's retrain some of them to do heat pumps and we'll just light it up. And really it was looked at as a fad. It really wasn't the roots of that company because they were fifth generation. And what started as a conversation maybe turned to a debate. And once I get to an argument point in frustration, I looked out the window and saw the sign out front with the name of the company, which was the last name of the three people I was in the room with, and my name wasn't on the sign.
So that was really kind of my sign. Here's your sign. Why don't we call this my two weeks notice? So, you know, I got home that day and my wife said, how is work? And I said, well, I've had better days at work. And she knew what that meant. She said, what happened? I said, well, long story short, I get my two weeks notice.
And she said, great, what are you going to do now? And I said, well, I'm going to create a place where I would want to work. And she said, what the hell does that mean? And I said, I'm going to create a heat pump company. That's all I'm going to do is Mitsubishi Heat Pumps. And she said, do you have a business plan?
And I said, I do. She goes, you do. And I said, I do. She said, can I read it? And I said, yes, if you're a mind reader, you'll feel free. And I've installed a heat pump every day since then. So wow. And so the technology was improving, it was getting lower and lower. But like at that point, 18 or 19 years ago, there can't have been many heat pump only companies in Maine.
But were there any? No. I think one of the bigger ones started literally, I think like the same month I started mine, you know, and the biggest one, Dave's world, they were doing it a little bit prior to that, but really I wasn't even aware of them because they were way further north. Yeah, at the time they were only up north.
So I guess the point of my comment was what gave you the confidence? I'm not surprised you have the confidence to start your own business, but what? Who gave you the confidence to start one that's just focused on Mitsubishi Heat pumps? Well, the approach then was really supplemental. Even though the heat pumps would provide 100% of their capacity down whatever it was then 13 degrees, five degrees, it wasn't necessarily the entire heating load of the home.
Maybe if we were at 35 degrees or 40 degrees or 50 degrees, it would heat the whole home. But once the temperature started going down, not so much that the output of the heat pumps decreased, but the load for the home increased with the lower temperatures. So pretty much all of the jobs we were doing then was just, you know, a singles down in the living room or one of my first jobs.
We did two five zone systems with ten indoor units, and it was only for air conditioning. In fact, we did the non hyper heat units back then. I think that was actually before Mitsubishi had like the hyper heat multi zones. So they were yeah, they weren't the conventional heat pumps that were saying don't belong in Maine 20 years ago, but really their capacity really dropped off at 30 degrees and was really doing not much at 20 or 15, but that was an air conditioning only application.
It took a while before we really did any jobs that were sole source. We've done many jobs where we've left with the oil tank and the boiler since then, but even still, the majority of the jobs we're designing them to do 100% of the heating load, but not necessarily taking out the boiler. So you may be leaving a boiler for like emergency backup purposes.
It's expensive to remove the old equipment, leave it there, but you've designed it to handle 100% of the loads. Yeah, a boiler is a lot easier to run on a portable generator than a house full of heat pumps. So tell us about how your business has evolved since you've walked out and said you had a business plan in your mind, and have installed a heat pump every day since then.
Like, just tell us about the trajectory of Royal River, because, I mean, you're like the name in high end homes outside Portland. So how'd you get from there? One guy with the dream to where you are today. A lot of hard work. Initially, it was me and my little four cylinder, five speed Toyota pickup truck.
I would go to the supply house first thing in the morning, pick up the materials I needed for the day, go install the heat pump. Just me. Wrap up the job. Hopefully by the end of the day, do a couple site visits on the way home. Go home and have dinner with my wife and kids. After the kids went to bed, I would jump into the office and do my invoice for the work that I did that day.
Do the quotes for the two visits I did on the way home. Find the time to register the warranty and process the rebate paperwork. Yeah, and get up and do it again. And I did that. I did it for less than a year. Actually, when I went to Southern Maine Technical College and found a couple guys that were looking for work either between classes or, during the summer, hired a couple part time guys like that to help get me through, I think, the following summer.
So I started the business in October of 2013. I think that very first summer, I hired a young woman who just finished her freshman year at college, and she came back. She came to work with me, spent a lot of days watching YouTube on how to use QuickBooks and YouTube on how to register a warranty and how to do the rebate paperwork.
And really just she was going to school for entrepreneurship, but really, she was a freshman. So she and I learned a lot about running the business together at the time, you know? And then I just kept growing it from there. And really, there are a couple of measurements that I used. How many people in my hiring and how many empty seats do I have in the vehicles that were going to the jobs with?
If I need another seat, I buy another vehicle. So I started the business, I think. At one point we had four Tacoma's and we were doing the enclosed trailers behind them. Eventually I moved on to vans. Yeah. And it's always just been it's been kind of like you remember the game SimCity? Yes. You got to build a city, so you start building houses and then you realize the residents and the houses have children.
So you need to build a daycare. And then all of a sudden the kids are growing up and you need to build a school. And all of a sudden people have moved in and they're starting to burn the place down. So you got to build a fire department. It's always been kind of like a SimCity thing in my head where it's at. What area am I getting overwhelmed and what do I need to put into place to eliminate that?
So we are
00:13:37.170 — 00:19:41.650
we have SOPs on how to write SOPs. Everything has a The process. Every van is stocked the same, every van has the same tools in it. And the mindset in the shop is everything has a place and everything's in its place. And really, that's kind of how I run my life. Like in the morning, I know that my the keys to my truck are on the windowsill next to my pocket knife, my wallet, and my little nitpicks pliers that have been in my pocket every day for the last two years.
So I have to do things that eliminate, help me expand my mental capacity because that's limited. So if there's something that's occupying mental capacity, I have to put a process in place so I don't have to think about that anymore. So everything has a system and a process with it. How did you learn to do that?
Was that an intuitive thing or a natural thing, or how did you figure out that that was so powerful and useful for you to get these standard operating procedures in place? Have your car keys in the same spot every day, that kind of stuff. I think it comes from when I started off in 85. Doing duct work on, I think my first job was like a 14 story building in Portland.
I was a helper and I learned don't carry the stuff in from the truck and put it on the far end of the building when we're going to be starting on this end. Or maybe we carry it to the far end of the building, and we start there and work our way back to the truck. We work our way out the front door, you know, let's go in and go up to the 14th floor and start there and work our way down to the ground floor.
And we're just constantly working our way towards the truck. When I was 25, in the trades, mostly doing sheet metal, but some pipe fitting and some equipment setting and things like that. I was running for commercial jobs, three big ones, and then they threw another one on me. And I look at it now and it's like, oh my gosh, that was 25 years old.
How is it that I was running these projects? I don't even know what the dollar value of those projects were back then, but I had 16 tin knockers and pipefitters working. Reporting to me on multiple jobs. I was driving a company vehicle and it's always my mind has always been that methodical. I have a system and that's become real important, especially like throughout my career with running those big jobs, you have to go to the coordination meetings and really nail it with the sprinkler contractor.
Like, what elevation are you going to be at? So I can run my ductwork at another elevation? And where's the plumbing guy, and what's the pitch of your piping? And how are we going to coordinate together to make this job work? And it's always for me has always been it's always been a system. It's just math. How many steps am I going to take to do this?
I can Yes, I can certainly do it in 10,000 steps. But if I can be more efficient, maybe I can do it in five. I love that focus and this idea that so much of these challenges are the it's these systems. It's this workflow that ties into the home itself, is a system that you're trying to understand and solve problems in.
And clearly that process this way you have systematized everything has really made you a lot of what you are today. That's fantastic. Yeah, we just had an all employee meeting on Friday the second, and we were joking because there's one man that's worked with me for nine years. He's never been in a supply house because we just we have everything.
We have everything we need at the shop. We order it in time. And really, for me, that's I mean, in this business, that's how you make money. But for me, it's more I've learned that my mind is very elastic, and the more I stretch it, the more it will stretch, But I only like to stretch it on things that are actually a stretch.
If I can free up my mental capacity by knowing that we have a system and that's just going to take care of itself, it frees up that mental capacity to do things like podcast. Yeah, totally. So this segways to I think the thing I wanted to ask you next, because I imagine your focus lends yourself lens to having these like really clear systems.
But you sell one brand, one product category, one geography. You have dropped some other things you've been doing in the past. You shut down for Christmas. Like, I think a lot of contractors out there would say you're leaving money on the table if you're not also doing furnaces and boilers and some of these other things.
Why do you see it the other way? Like, why do you do it the way you do? And what would you tell those guys who have questions about are you leaving money on the table? Well, it relates right back to that data. I came home and told my wife that I quit my job, and that I was going to create a place where I would want to work.
That has been my mantra every day of this business right from the beginning. I think there were less than ten of us. I decided my employees were going to have 100% paid medical, dental, vision, long term short term disability and life insurance. A lot of companies don't do that until they hit 50 employees when it's mandatory.
But that's not the place that I want to work. I've done boilers. I don't like going home smelling like oil anymore. I don't like carrying cast iron boilers downstairs. That really it's questionable whether or not they're going to support my weight. Never mind me. You and a 400 pound boiler. And the same thing with the oil tank.
There's not a set of stairs. There's not an architect that designs a set of stairs so that you can move an oil tank up and down into the basement. So that's the place I want to work. I don't want to do that stuff, but it's also work life balance. I want to train my guys to be the best at what they do I don't want. I've been an outside salesperson for a wholesaler where I had to know
00:19:42.690 — 00:27:37.550
air handlers, condenser units, boilers. I needed to know radiant. I needed to know ductwork. I needed to know European flat panel radiators and eaves and hives and zoning systems and crazy new programable thermostats. I needed to know all of that stuff. Oh, and by the way, we're going to also do plumbing.
So now you're a territory manager calling on contractors. And it's like, I can't possibly become an expert on all of this stuff. I don't want to be I don't want to half ass anything I don't. In the early days, I met somebody that said that they were going to be the biggest heat pump contractor this side of Boston, and I was like, great, well, we're going to get along just fine.
You want to be the biggest, I'm going to be the best, you know? And it was really just a it was really just a joke. And it's been an ongoing joke between the two of us for the last 10 or 12 years. But I really love just I heard a man speak in 97 and he said, I don't care what you do. I don't care if you're a cardiac surgeon or a research scientist or a veterinarian or a janitor or an HVAC person, whatever it is you're going to do might not be the best in the world at it.
And I don't know where in the room I was sitting, but it was like this arrow that just left his bow coming through the crowd headed right for my forehead. Yeah. And it really just it really stuck. Just like that. Why not be the best? Am I the best? I don't know how to measure that. Will I ever be the best? No, I really don't care.
But I really feel good about what we do. And I know that we're in very high demand, and I know that we do really good work and people are happy with us, and we get a lot of word of mouth referrals. So I love the focus of just doing one product. My wife still doesn't know this after hearing this podcast. She will, but I did sit down and wrote somewhat of a business plan, but it was after I quit my job and really I just started to identify like, what am I going to do?
I don't want to get divorced, so what am I going to do? How am I going to do this? Where do I want to work? Well, I want to work within an hour of Freeport. I don't want to travel. It's an hour and 45 minutes. You need to get us a hotel. I don't want to do that. That's not the place I want to work. So we stay within one hour of Freeport.
Who do I want to work for? Do I want all of the one percenters? No, because there's a reason they became the one percenters. They're really much better with money than I am, and they tend to not be as profitable because they are pretty savvy with money. I grew up in the low income projects in Portland. We got our welfare check every month in our food stamps, and do I want to work in those same low income neighborhoods, in the same low income homes?
Some of them, yes. But I know what my electric panel probably looked like in a house that we lived in, and I don't want to work in that electric panel. So really, I identified the demographic that I want to work for, and I started identifying like, who are they? What are they drive, where do they live? What kind of house do they live in?
Where do their kids go to school? And as I started writing down all of these characteristics that I thought in their traits, I realized that I had just perfectly identified me and my wife, and it was like, oh, so wait a minute. If the clientele that I want to work for is just like me and Tracy, all of my marketing and advertising only has to appeal to me because it appeals to me.
It will appeal to them. So. My daughter, when she was 13, wrote drew our logo and we went with silver vans because every contractor in the country uses white vans, so therefore I'm not going to use white vans. We went with silver, which has a really subtle classic look to it, and it's very recognizable. But man, it's hard to find silver vans.
They're not just sitting on a lot, so that's maybe one place I could have had a better system in place for myself. But. So yeah, so we train on one product, we train on Mitsubishi Heat pumps. We know all the nomenclature we know. I mean, I think everybody has half of the part numbers for for the replacement parts memorized.
We know all the talk settings. We know all of the refrigerant charge for each additional five feet. We know the maximum line set lengths for each one. We know what the combinations are. We're doing Diamond System Builder for our manual s, and at some level we have most of it memorized because we've done so many manual S's, we already know what the output of these different combinations is going to be if we're doing multi zones.
And I just love that. Again, it frees up mental capacity when I don't have to go into five different manufacturers to try to figure out what, how much refrigerant am I going to have to add to this system. But even worse, mix it up in your head like, oh damn, I just added the charge in a Mitsubishi. That should have been for a Samsung or something like that.
Wow. And I mean, it's just incredible. Having that focus, it frees up your mind, like you're saying, and like the idea of having those two different or three different product lines that you're installing, you've got to have like you're describing three different processes, potentially different SOPs, your training employees on three different steps.
Three different SOPs need to be updated on a regular basis. Like it just it has these reverberations across the whole business. And man, it's appealing to just that focus that you have. And it seems like I think we got this right, that by being so focused on Mitsubishi, it's opened up other opportunities for you, like you guys do beta testing for Mitsubishi.
Is that right? We do. Yeah. Yeah, that's really fun. Wow. How did that develop. And like what does that look like? I think it just developed that where I was at a conference and I was talking to one of their lead product engineers, and he was asking me what I thought of an idea for a product that they had. And we talked pretty intelligently about it, really deep dive geeking out on defrost and reheat and all while hanging at a bar, having a bourbon, probably.
And he's like, how would you like to test some? So they shipped them to us from Japan and we all downloaded Google Translate on our phone so that we could read the instruction manual and understand the remote control. Yeah, so we put them in mostly in our homes. I had one in my house, drew, my service manager who's our diamond elite technician.
We put one in his house. We put cameras on them so we could see what the coils were doing. We put temperature sensors and humidity sensors. We put current sensing relays on condensate pumps so that we could calculate how many times the condensate pump ran and for what duration. And that was after we figured out what the displacement of it was each time it ran, so that we could really nail down how many points of moisture is it removing from the space, while also looking at the space temp to see?
Did we lose the space temperature during defrost or things like that? So that's pretty fun. Other than having a unit up on the wall that looks like it was in Frankenstein's. Looks like it was in the middle of, like, an EKG or something with all these wires and sensors all plugged in it in our living room. My wife was pretty thrilled.
00:27:39.270 — 00:27:40.230
Amazing.
00:27:41.430 — 00:28:35.449
Scott, I want to ask about how this has played out competitively. Like HVAC is competitive. Heat pumps in Maine are competitive based on the rebates. A lot of people are competing on price, and I get the sense that that's not totally that's not what you compete on. So how have you competed in this incredibly competitive.
What's competitive today? Main heat pump space. You're actually worrying me. And I didn't realize it was competitive. Do I have something to worry about? Look, that is the answer right there. That is the answer of a confident man. Yeah. No, I say let them all race to the bottom. That's not where we want to be.
But, Scott, that is so much easier. That was part of the traits that I identified in my demographic from the beginning is, you know, if I have if there's somebody living here in Freeport that really wants to go buy that new
00:28:36.490 — 00:30:20.390
L.L. bean, all conditions gear, primo loft liner with the Gore-Tex shell, but it's going to cost them 900 bucks and they don't have 900 bucks. Well, they're not going to go to target and get something for 100 bucks. They're going to wait until they can they can swing that value. You know, they're value minded people.
They want quality. They they're passionate about their homes. And I have a lot of people say, oh man, I hate residential. I'm so much happier and commercial. And it's like, yeah, because in commercial you can smoke butts and throw the butts on the ground or the job site while you're working and commercial.
It's all about investment, and all they want is they have to have a return on investment. So they're always looking for the low bid. I don't want to be there. I want the challenge of going into somebody's home and leaving it better than we found it. And that's really the reputation that we have established.
We go in and we do our best job from day one, with the design and the consultation and laying out their expectations and really providing them with an understanding of how air is going to move through their home. And we really dive more into comfort than we don't design for the rebate. I mean, every HVAC engineer designs a job for a building, and that's how I've spent my last 40 years.
And now with the rebates, it's all about 20 BTUs per square foot. It doesn't matter if it's an 1830s farmhouse up in Fort Kent near Canada, or
00:30:21.460 — 00:32:08.240
a high performance home here on the coast of Freeport. They all get 20 BTUs per square foot. That's how you get a rebate. I'm out. I don't want to play that game. So we go in and we design for the home. We consider distribution in what rooms are going to be warm and cold and find out like are they okay with 2 or 3 degrees or four degree temperature difference from this room to that room, or do they want a solution where it's plus or minus two degrees in every room?
Then we move on to a different solution. I always tell people that I have to think of function first, but esthetics are a very close second. So that's how we treat people's homes and it spreads like wildfire. And we charge for that because we make a fair and reasonable profit. We're using the same spreadsheet today that I developed 20 years ago when I was with that other company, and it's all based upon a fair and reasonable profit.
The only thing that really changes is the labor. How many hours is it going to take to do this job the way this customer would want it done? This is their home. In most cases, it's people's biggest investment they've ever made is their home. I want to treat it properly. I want to root things in a way that doesn't look like we ran line hide all across the front of the house.
We see it all the time. We don't do it. We can. We'll often walk away from a job if they're like, yeah, no, I want that. I want to heat pumps. I want one each side of the front door like they're gargoyles sitting there. It's like you don't really need us. Then what I was going to say was, I'd love to go more into, like, your process.
Like from when a customer calls to when you're leaving the house. But where do you want to go? Well, I was going to go in a completely different direction, which is walk us through your process
00:32:09.600 — 00:32:49.300
from what a customer calls. Well, no, because you've done an excellent job of telling us, like the feeling, first of all, you got your ideal customer profile and it's super specific in your mind. And that is rare, right? Most people like I serve anybody. So you got the ideal customer and then you've got this feeling you leave them with, which you guys are different.
You're going to treat their home like it's your own, but like, yeah, bring us to your process. Like, what are the mechanics? Because I know a bit about your sales process and it's a two man experience and I think it's quite different. So walking us through that I think would be super valuable for our, our listeners.
Well, how about if we do this? How about if we go into my process from the moment the customer calls?
00:32:51.340 — 00:37:04.830
Okay. We, uh, I made a jingle 12 years ago. I don't know if you've ever heard it, but there is a Royal River Heat pumps jingle and it says 4004065 is the number you need to call. So we have people that are like, you bastard, I have to sing the jingle to remember the phone number. So when they call, there's actually a person that answers, there's no phone tree, there's no push.
One for this, two for that. It's a person. We do very little qualifying during that first call. And that's the unique thing about when our phone rings. If our phone rings, the heat pump is already sold. They're not calling us for a boiler or a furnace. They're calling us because they've made the decision that they, at the very least want to explore a heat pump.
So our job is really to sell Royal River heat pumps to to demonstrate that differentiation. We get so many different accolades for the office staff. Everybody's amazing. I heard it twice today. So we set up a visit and that the sad thing for us is that site visit can be two months out, ten weeks out, where the competitors you spoke of can be there tomorrow.
By the time we get there. They already have two quotes. If they're getting multiple quotes, they already have two quotes And if the competitors have put an expiration date on those quotes, usually they're good for like 60 days or 90 days. I mean, they're already running up against the expiration dates for my competitor's quotes.
And when we come in, we're very specific. I've put together a list of things and I intentionally wrote on it. Mr. Smith, these are not things that you need. You do not need to answer these questions, but these are some things to consider before we get to your home. And more often than not, we get there and they've printed it and they have it all written out.
They've answered all of the questions. And those are really just like programing questions. How do you use the home? What do you typically set your thermostat to? How many people are in the home? All very specific questions to the home. And we get there. And Shane and I, we kind of play this not good cop bad cop, but one's a nerd and one's a geek.
So I kind of nerd out talking to them about how air flows through the home, and what's the best position for a heat pump. When we talk about distribution and we talk about anything they want to talk about, I love it when I go into every house as if it's a a kindergarten teacher. They know nothing about HVAC, so I have a really good way of just speaking in a way that's understandable without like going way over their head.
And I love it when people start. Well, what about short cycling are you concerned about? And, you know, it's like, oh, what's this guy talking about? So I'll elevate the level of the conversation. And if they use the word psychometrics, I'm just like, what do you do? Who are you? And I find out, you know, they're an HVAC engineer.
And it's like, oh, okay, we're going to wake up with this. There's a joke in the office if somebody calls up. So if, somebody is a kindergarten teacher or a physician or an accountant, they that customer never says that on the initial intake call. But if they are an engineer or an architect, they say it every time they call.
Yeah. Hi. I'm. I'm. My name is Eric Fitts. I'm an HVAC engineer. Yeah. And and immediately the people in the office are, like, must send only Scott to this site visit. You know, nobody else can go. So Shane and I. So I'm the nerd I geek out with, or I nerd out with all of the building science. And then Shane's the geek.
We got him, you know, some squarish black framed glasses with some tape on the corner and a pocket protector. And he whips out his ampullae and
00:37:05.950 — 00:38:32.439
we start doing the scan of the home. And it was so funny the first day we did it, because we didn't ask if we could do it. We didn't tell the homeowners what we were doing. All of a sudden, Shane has his iPad in his hand and he's just scanning around the room. And of course, it looks like you're just like video documenting everything.
This woman was completely freaked out and we had to, like, pump the brakes and tell her what we were doing and show her the 3D model. And she was not impressed. So we thought we just wasted that hour and a half, but we ended up doing the installation. So as soon as we left that job, we were like, okay, we need to like come up with a different strategy, like we need to we need to show them what this amply load calculation software is before you start, like documenting the bourbon bar and all of the stuff in the house.
So Shane does all of the load calculations, and he has a really strong background in construction and framing. He's really sharp and he's really he has a great ability to learn. So he and I just geek out on building science all the time while we're riding around together, and once he does the load calculation with amply, he will show the homeowners the whole load calculation.
And in the meantime, I have often told the homeowners like, what size unit will put in which place? And
00:38:33.600 — 00:44:45.810
Shane will often say, what did you come up with for BTUs in that room? It's like, oh, I came up with 7000 BTUs of heating, but only 24,000 BTUs of cooling. And he'll look at the homeowner, and he's like, he does it all the time. And he shows them. I came up with 6800 BTUs of heating and 2300 BTUs of cooling, so I'm often within a couple hundred BTUs of amply.
That's awesome. Just after spending some time in the house, that's awesome. So we do that. It's a two person sales team, which is totally different, but there is this so much information to gather. We're doing the amply load calques where it's great with amply because it also calculates the cubic footage, which is important now with eight tools.
And what I find is sometimes we allow like an hour and a half, and sometimes I could be with Debbie up there and we just spent an hour and a half reminiscing about Eric growing up in Portland. You know, we have it. Never mind me. You know, taking pictures of placement and line set runs. And so it's really nice having two people because it's part of our process.
We want all of the documentation. We want to set the guys in the field up for success in this industry. There's always that door that separates the clean office space from the dusty warehouse, and there's a door there, because there has to be because the dust will travel back and forth. But that door also creates.
Well, that job didn't make money because those guys on that side of the door didn't estimate it. Right. And then the guys on the other side of the door are like, well, yeah, the guys out in the field, they totally milked that one. You know? That's why it didn't make any money. So one of my goals is to break down that door.
We actually just replace that door with a glass door so that at least it's not a visual barrier as well. So we have a lot of processes in place because I would love to have all of my installers go get five star reviews for every job they go to, but they how can I expect them to do that if I don't deliver them a five star project, you know?
So we really focus on line set lengths and what do we need for line set ducting and how are we mounting this? What size is the attic hatch? Are we going in the attic? We have a job hazard analysis form that even identifies if they have bees on the property. Are they beekeepers? Because I've got one guy that apparently is allergic to bees, so it's evolving all of the time, but I often end my site visits with.
So how? How do we do? Were we worth the wait? And I say that just really just so that they say, oh my gosh, this was way different than the other two people that came in. And then we hear about one of them. They were only here for 20 minutes. I don't even think they took a tape measure out. Yeah. So, you know, we kind of leave them in my mind.
I'm hoping that when we leave, they're saying, I hope we can afford them. You know, more. More than me saying, I hope we can bid that low enough to get that job. Awesome. Scott, I love that we wrote this article called Stop Competing on Price and Start Winning on Trust. And like so much of what you just said, kind of is just like, check check check check check check check check.
I have one question. The one thing I hear repeatedly is that speed to lead. Speed to lead speed to lead speed, to quote, is what matters. And I hear you saying we're not. We might get there after the other guy's quote expires. And you seem completely unperturbed by that. And we actually see this as a common thing among the best.
They actually slow things down. It's like, so what is your experience there? Or what would you say to the guy who's like, all I hear in these sales classes I go to with this sales guru is speed to lead. What would you say to them about why that's not something you're terribly worried about? That's not the company I want to work for.
Say more. If they do a single zone with us, they're minimum seven, maybe $8,000 for a single zone minimum. If they do some crazy ceiling unit, they could be up to 10,000 for a single zone. I just sold an $84,000 heat pump job for a home. Now I don't have $84,000 to spend on an HVAC system for my home, especially if it's my I think it's second or third home, but if I do, I don't want some guy coming in the door three days after I call, spending 20 minutes in a house and then trying to take my check before he leaves.
While we're sitting at the kitchen table, I tell all of my customers like, you're going to make an investment. You're going to spend what I would consider to be a fair amount of money. There's no hurry. And oftentimes, I mean, where are we now? If somebody's calling us today? I mean, it's what, January 6th?
We're going to go see them sometime in February, and we're going to do their installation in April. You know. So I'm kind of hoping that while it was, I think it was eight degrees this morning. I hope that triggered people's minds to call. And man, I want air conditioning. I got to call Royal River Heat Pumps because that's really where we're scheduling.
If you're calling today, we can't help you for this heating season. But yeah, it's kind of like that demographic that I identified. If we lose somebody, we'll often say, well, they weren't a Royal River Heat Pumps customer then. I love that they went to target and bought the $100 ski parka. Right? Right.
Scott, I'd love to shift gears. We've talked. I touched on a bunch of different unique aspects of your your, like, business process. We've heard about your design and sales process.
00:44:46.850 — 00:59:07.390
You're sitting in a pretty unique training center right now while we're recording. I'd love to hear more about why have you invested in a training center, and what does it look like for someone who joins your company to go from, regardless of experience. What is that process for you to get them up to speed on the Royal River heat pump kind of path or way?
Yeah, I mean, for me it's all about training. We had that meeting here on Friday and you know, we were talking about what do you guys listen to for podcast. Some of them are listening to who is it Dave Ramsey that talks about budgeting, which is great. They're trying to figure out their home budget in some listened to sports talk radio.
I'm listening to the Heat Pump podcast, HVAC school, the Metis Tech Show, and High Performance Edge. You know, that's like usually my radio is on public radio, but just I mean, I think it was since the heat pump summit. Like, I've not listened to anything but podcast. I'm just I can't get enough of it. And that's coming from someone who's been doing this for 41 years.
I'm 59 years old and it's like, I want to learn. I want to learn. It's about how do you become the best? And it's like training. You look at golf. You've got these guys that you see on Thursday, Friday and the better ones on Saturday and Sunday. It's amazing how much they train. I mean, I've gone and played with some of those golfers and we play 18 holes with them and they're like, oh, I'm going to the driving range.
It's like, really we're going to the bar. So for me, it's just staying ahead of everything. That's part of why Royal River Heat Pumps is able to do what we're doing. Kind of going back to your question a while back, I went from saying heat pumps don't belong in Maine to doing this. It's because there's been more advances in heat pump technology in the last ten years than in the entire history of oil heating, so it's a lot to stay ahead of.
So I was sending guys to training two at a time. Editor Eric, you guys go over to F.W. Webb in Scarborough. They're doing this training. And then two weeks later, I send Steve and Bill to the same training that Eric and Ed went to, and they come back saying different stuff. It's like, well, wait a minute, let me go to that.
So I go do that training and I come back and I'm like, that's not what he said. So three different groups of people going to the same quote unquote, same training. They either learned three different things or heard three different things. So it's like, yeah, no more. No, we're going to do it here. Everybody's getting the same training.
It would be the same when I sent people down to the Mitsubishi place down outside of Boston. Same subject, same instructor. They heard different things. So I guess that's part of is it really having SOPs and process so nailed down Or is it? I'm a control freak, so it's like I want to control what they're learning and what they're hearing.
But at the same time, I want to avoid tribal knowledge. And all of a sudden, you know, it's one guy starts doing it the right way, and the next guy interpreted a little different, he's doing it a little different. And the next thing you know, ten technicians down the road, they're not learning at all the proper way.
So we like to start everybody here the first day at Royal River heat Pumps, they actually spend in the office and they go they get the mandatory the safety training and they get the list, get your direct deposit and your payroll all set up, and let's get you on the website and all of those administrative things, but they actually move from chair to chair with, they'll spend a half hour to an hour with accounts payable.
They'll be with the lead coordinators. They'll. Be with the service dispatcher. They'll be with the warehouse guy. Like, literally they go through the entire office for day one, and then we have a couple of guys in the field that we call them the assessors. We send them out with them just to see, like, what do they need to learn or what needs to be scrubbed from their minds.
We tell everybody like, I don't care where you have worked, you have not done as many heat pumps as we do here, and you've not done them the same way we do them here. So it's going to be really hard because you've been doing this for 15 or 20 years, but you need to forget everything you know and be able to learn.
So we do that and we have this space here that I'm sitting in, and it's more of the clean side of things where it's applications training and we do some circuitry stuff, but for the most part it's clean and in the back room. You know, we have some mock ups where we teach them installs and we teach them how to mount the indoor units.
And we do a lot of training on preventative maintenance from your perspective. What is one of the hardest things to train? Is it more on the technical side? Is it more on these sort of customer like softer skills side? What's the hardest part for you right now? For me, I am getting back to where I was before the pandemic and before the pandemic.
Everybody I hired, their interview was done over a meal that stopped during a pandemic. But I'm really getting back to it because I could say like, hey, editor, why don't we get together and have dinner? Why don't we grab a bite to eat breakfast, lunch, dinner? Your pick. Where do you want to go? And are they are they bringing to me to McDonald's, or are they bringing me to scales down on the Portland waterfront?
Are we going to Applebee's or 99, or are we going to some local little burrito place? Kind of tells you a lot. When where do they like to go? I love to park somewhere near their vehicles, so if I'm getting out of mine, I can walk by theirs and see if it's piled up with a week's worth of laundry in two weeks worth of trash and returnable because that's how they're going to keep my vans when we get to the front door.
I'll open the first door, you know, do they say thank you and then do the courtesy like they open the next door and then I go in. How are they with the waitstaff? What are they ordering? I mean, I'm not hiring Susie Etiquette, but are they putting their napkin in their lap? Are they immediately like putting salt all over everything before they even tasted it?
Because for me, that person can never be pleased. They're going to salt everything. Do they? At least you know when the check comes. Do they at least kind of, like, gesture towards their wallet, you know, like and you know, and of course I say, no, you know this on me. I got this, you know. Do they say, well, at least let me get the tip.
It's like, you know, still it's like, no, I got it. But it really tells me a lot about who they are. So, you know, the answer to your question is the customer service, the soft skills. Because my mindset is that I can teach anyone how to install a heat pump. I can't teach you what if you didn't learn what you needed to learn growing up and you're 30 years old now?
Like I can't teach you that stuff. I went to one of those dinner interviews and the waitress came over and said, can I get you guys anything else? And without even taking his eyes off me, he was still talking. He took his water glass and just held it up like towards her face. And she kind of got this look like, and she kind of looked over at me and I immediately was like, all right.
So the interview was over. And so this is really just a company sponsored meal for me at this point. Oh my gosh. Oh, geez. That's rough. Wow. So yeah, I want to hire good people. I've been excited in the past. Hiring a technician with 15 or 20 or 25 years of experience, that's like, yes, that's what we needed.
And it's like, oh, damn. No, we didn't, you know, because he's he doesn't believe in triple evacuation. That's useless. You know, you don't need to do that. So yeah, you know, it's just those things that I like, people that like to show up for work. And I like to learn and like to grow and are willing to work.
But we also have a really great work life balance. I split the company in half. So we have a blue flight and a green flight. So today is Tuesday. Kind of a weird time to be talking about it because of the holidays. But every company in the world almost is talking about the four day workweek. Well, I run an HVAC business.
I can't just close on Fridays, so I split the company in half. So this week the blue flight worked yesterday. So this week they will work Monday Tuesday, Wednesday, Thursday. The green flight was off yesterday. This week they worked Tuesday, Wednesday, Thursday, Friday and then next week. The green flight works Monday, Tuesday, Wednesday, Thursday and the blue flight works Tuesday, Wednesday, Thursday, Friday.
So you get a two day weekend, four day weekend, two day weekend, four day weekend. They absolutely love it. It's pretty nice. We handed out a calendar of every day that everybody in the company will work for 2026. We handed it out on Friday. They're already like scratching and clawing to be the you know, you talk about a race.
It's not a race to the bottom. It's a race to get my PTO submission in for 4th of July weekend because it's on, you know, whatever day it is, if they can play it right and they can end up taking 11 days off by only using two PTO days when it's combined with the holiday or things like that. Yeah. Wow, that's a cool idea.
Yeah, that's super cool. All right, Scott, we have covered a ton. It's all been super practical and tangible. Thank you. I want to end with this question because I know, like you're given the keynote for Mitsubishi in a couple of weeks. So you talk to a lot of contractors and give a lot of advice. If there's someone listening, there's a contractor in another cold climate state and they want to copy your playbook.
They want to build the Royal River heat Pumps of Idaho. What's the one thing they're most likely to get wrong? Like when you give people advice. What's the advice that tends to not be implemented the way you'd want it to be? Well, the biggest thing that I see holding companies back and I have worked with companies across the country, you know, I've had people come to my place from Massachusetts and Connecticut and New York City and I think Wisconsin to really to see how we do things.
I think one of the things that people get wrong is they surrender to the fact that they have a customer base that are depending on them to service the oil boiler or their gas point, because they've done all aspects of HVAC. You know, and my advice is take one van, take two guys or an intern in the two vans and four guys, but keep doing all of your other stuff until you and then just start growing the ductless side Ductless ducted the VCF stuff until you realize how.
You talked a lot about me leaving money on the table. We don't have emergency on call. We shut down for ten days at Christmas. If you're doing conventional HVAC and not ductless, you know these mini splits. You're leaving a lot of money on the table. You're leaving money on the table, and you're also taking on a lot more risk.
So my advice is to do something. This is not a fad. These things are here forever. They're just going to get better. They're going to replace a lot of the stuff that we've been working on. They're going to have a better ability to replace. A lot of the stuff we've been working on used to be just mini splits, and now we have air handlers that can completely replace a gas furnace or replace central air.
We have coils that we can put on and do dual fuel applications. Air and water. It's out there a little bit now, but it's all over the rest of the world. It's going to get here. So a lot of those customers that you have currently, you can actually change them to the kind of customer you want. That's what I did when I identified who do I want to work for?
I didn't eliminate a whole bunch of people. I kind of looked at it like, well, if they're doing this now, I can still work with them. They just have to change their systems and their house so that they can work with me. Yeah. So just focus, start small focus, put systems in place, train a couple technicians and just start small.
I mean, that's how I did it. It was me and my truck and I've grown it organically. No business loans, no lines of credit, no vehicle payments. No, I mean, it's been bootstrapped out of my pocket since the day I started. I made a $700 investment to replace my 20 year old vacuum pump and manifold set a new micron gauge.
So yeah, just focus on what it really takes to do it right. You're going to screw up. We've put in some wrong size systems. And you know what? We go back and we rip it out and we put in the right system. No additional charge. We just make it right. And really, that's my focus through all of this, because that's the kind of company I want to work for.
It seems like there's no better place to end than right there. Scott. Libby, thank you so much for joining us on the Heat Pump podcast. Thank you. I would love to do it again another time. And I look forward to seeing you up here in Maine. Thanks, Scott.
00:59:10.590 — 00:59:36.990
Thanks for listening to the Heat Pump podcast. It is a production of Amply Energy and just a reminder that the opinions voice were those of our guests or us, depending on who was talking. If you like what you've heard and haven't subscribed, please subscribe in your favorite podcast platform. We'd love to hear from you, so feel free to reach out! You can reach us once again at hello@amply.energy. Thanks a lot.