He does get carried away at times, which won't surprise people who know Paul Pollets. One of the GCs he works for told me amid complimentary remarks about his work: "Sometimes Paul's artistic bent has to give way to practical compromises on the jobsite." It does. Paul admits he occasionally will give in on price or design considerations, just as one might consent to having a tooth pulled when absolutely necessary. But how we dread that visit to the dentist.
Radiant heating is not just a technology or a business to Paul Pollets and Sheldon Balberman, partners in Seattle's Advanced Radiant Technology. It's an art form, and like any good artists, one they feel passionate about. No company's acronym fits as well as their ART.
Balberman was a newcomer to the industry when they founded ART in 1997. He had spent a career in health care and sports medicine, rising to national sales manager for a company that made custom knee braces. The constant travel wore him out, and he welcomed the opportunity to start a business he could operate out of his home, as is the case with ART's office.
Balberman's business savvy is a perfect complement to Pollets' technical knowledge. He grew up in a family that owned a plumbing supply business in upstate New York, and has a background as a UA plumber and pipefitter. When he moved to Seattle in the early-1990s, he went to work for Northwest Mechanical, a company featured for its radiant work in the 1997 edition of PM's "Radiant Heating Report" supplement, and now a friendly competitor.
Pollets and Balberman had a vision that has been largely fulfilled. Theirs is a niche company within a niche market. They design, build and service advanced radiant systems, i.e., those that embody state-of-art equipment, materials, engineering, craftsmanship and whatever flourishes they can think up. Like an inch-and-a-half thick manual given to every customer filled with descriptions not only of the boiler and other major equipment, but of every pipe, valve, fitting and hanger going into the job. Plus copies of all the permits, and step-by-step troubleshooting instructions.
"It's the scepter handed to the customer at coronation," is how Pollets describes the three-ring binder titled Operating & Equipment Manual for Hydronic Heating System by Advanced Radiant Technology. "This is something normally done with large commercial projects, but not too many contractors do it for all residential jobs like we do."
Ruffles & FlourishesNice touches like that demonstrate marketing savvy by ART's owners, but their real focal point is the technology itself. Pollets is partial to Viessmann boilers, Wirsbo PEX tubing, Grundfos pumps and whatever other top-of-the-line components he comes across that can enhance performance to the max. He designs systems with temperature-responsive controls, and when hanging equipment he likes to use custom-made hangers from Europe that minimize system vibration to eliminate the buzzes, pops and whistles that accompany so many heating systems.
They insulate all piping, and are ergonomically conscientious. "We always set pumps and other equipment so it's chest high or waist high," explains Pollets. "We make sure to install isolation and drain valves everywhere, same with thermometers, so that in the future it's easy for a service technician to work on the system."
ART employs three technicians with sterling credentials and pays them top dollar. One, Jeff Nadeau, grew up in the oil heating business in New York State and worked as an Air Force jet engine mechanic before coming to ART.
Two others, Brandon McCardle and Justin Joos, were among the industry's typically underpaid heating mechanics when they moved to Seattle in search of better opportunity. "A mechanic is entitled to make serious money in this very difficult business," declares Pollets. "And it makes sense from a business standpoint to support them with high pay and attractive benefits, because otherwise they leave for 50 cents more an hour, and you've lost all you've invested in training." ART received an award from the ACHR News last year as the best HVAC company to work for in its region.
Naturally, all this boosts the company's expenses and therefore the prices they must charge for their jobs. Radiant systems installed by ART tend to cost $10-15 per sq. ft., which Pollets estimates to be 30 percent to 40 percent higher than most competition in his area. It prices them out of a large part of the marketplace. In fact, Pollets says they close no more than 10 percent to 20 percent of the leads that come in.
"First thing we ask is, 'Do you have a budget?' That opens the door in a polite way to conversation about money, which the average contractor shies away from talking about. Sometimes the customer will say, 'Yes, we have $4 per square foot to work with,' and we'll tell them our systems start at around $10 a square foot, then ask if that's out of the question. This way we avoid writing proposals that we can never close," says Pollets.
The fees charged by ART stem not only from deluxe equipment and top wages; it's a measure of the value they place on their intellectual property. An elegant design ought to be worth more than a Rube Goldberg. At the risk of belaboring the metaphor, these guys are radiant artists. The extraordinary prices you see posted in art galleries have little to do with the cost of canvas and paint.
ART's design skills were recognized by the Radiant Panel Association in both 2000 and 2001 with awards for innovation.
Outside The BoxNothing gets Pollets more animated than solving brain-stumping heating problems. They aren't always expensive solutions, either. For instance, many of ART's high-end clients have wine cellars in their radiantly heated basements. How do you avoid damaging those expensive vintages? By stopping the pour and inserting a 2-inch foam barrier to prevent heat from entering the wine storage area.
How could you possibly get radiant to do the job in a powder room with 25 sq. ft. of space and 22-ft. high ceilings? Better not even try. Pollets decided upon a supplemental radiator.
ART has gained a reputation as the expert of last resort for jobs botched so badly nobody else is able or willing to deal with them. It's opened up a new market consisting of forensic engineering and repairs. Pollets described one job in a $2 million home that had 12 pumps where one was needed, five controls instead of one, and wrong size piping, among its most blatant flaws.
The system performed miserably, of course, and after calling two other contractors who couldn't figure out what was going on, the desperate homeowner turned to ART. They ended up fixing the system at a price many homeowners would gasp at for a new installation. Quite a few of these forensic jobs come from homeowners who turned down ART for the original work, because they cost too much.
Radiant HotbedThe Seattle area is a radiant hotbed, which seems counterintuitive given its relatively mild climate. Yet, while temperatures seldom drop below freezing, the region's degree-day plot makes it ripe for radiant heat. It's a mild heating season but long, with about 250 days a year when the heat needs to be on. Moreover, there are only a handful of days each year when it gets warmer than 85 degrees, virtually eliminating the need for air conditioning.
Even so, like everywhere else, hydronics owns but a small slice of the market compared with warm air systems -- no more than 20 percent, Pollets estimates. No matter how you spin the numbers to show radiant's edge in fuel economy, warm air's big edge in upfront cost remains a tough selling nut to crack.
When demanded, usually on the highest-end jobs, ART will provide a/c along with radiant heat. On occasion they've even been hired for straightforward warm air HVAC installations, which they'll consent to for the sake of a customer relationship and because they have bills to pay like everyone else.
More commonly, they will try to convince people to opt for radiant with a split HVAC system, or at least the V portion. Pollets is a big fan of ventilation for IAQ purposes, and puts as much tlc into these designs as he does radiant. His favorite mode, given Seattle's climate, is heat recovery ventilation to remove humidity while exchanging air and discharging the heat.
Balberman and Pollets were of like mind in striving to create a premium brand name for ART. There's a receptive audience in Seattle for this niche within a niche. The region is renowned for its high-tech economy that has spawned numerous nouveau riche entrepreneurs, along with well-heeled employees who got in on the ground floor of some of the country's most energetic businesses. For many of them, price is no object as long as it's in line with perceived value. People of that mindset form the core of ART's clientele.
Yet, it isn't just the super-rich who comprise radiant's market. The area teems with young techies who live in modest 2,000 sq. ft. homes and have incomes south of six figures. Many of them have researched radiant technology and are fascinated by its promise of supreme comfort and fuel efficiency. "Those jobs are just as much fun to do as the giant mansions we work on," says Pollets, "because they finish much faster and the cash flow is greater. That's a market we'd like to be in more, but it's also where most of our competitors are, and those jobs can be hard to land because of the cost factor."
EonomizingWith small jobs of under 1,000 sq. ft., ART will sometimes cut back to using a water heater in place of a boiler. Pollets prefers Bradford White's CombiCor unit. "These water heaters have only been out for five or six years and we tell our customers we can't guarantee their longevity. But business reality is to consider every means of doing radiant. It's still a cut above a plain vanilla heating system."
Expensive doesn't necessarily equate with spendthrift. ART's owners do everything they can to lower business operating costs to keep prices restrained. Their office is a modest anteroom on the ground floor of Balberman's two-story residence, although it does come equipped with fancy radiant heating and ventilation systems. The garage serves as the mechanical room and something of a showroom.
Another way of preserving dollars is to use their Hackney cube trucks as rolling warehouses, keeping them stored with precise inventory to minimize trips to the supply house. "Controlling overhead has to be worked on if you want to pull dollars out of this business," says Pollets. "And as Frank Blau always preaches, you must know to the penny what your billable dollars per hour are.
"Sheldon and I also have a blend of talents that enable us to do a lot with a little in this business," he adds. "Between my supply house and pipefitter background, and Sheldon's national sales experience, the two of us are able to wear hats that might require four to six specialists in other companies. That's an enormous savings in overhead -- even if it does get stressful at times."
MarketingBesides word of mouth, ART gets business mainly from Yellow Pages advertising and its Web site, www.advancedradiant.com, winner of this magazine's 1999 "Radiant Heating Report" award for best Web site.
About 20 percent of their business comes from Yellow Pages, according to Pollets, even though YP eats up the lion's share of their marketing dollars. Yet, "60 percent to 70 percent of our clients said they found us on the Internet," he notes, even though it costs only a couple of grand a year to maintain the site.
Their Web traffic has been averaging about 7,000 visitors a month and has peaked at more than 9,000, thanks in large measure to an Inc. magazine article in 1999 recognizing their Web site as among the best of small businesses.
Most of those visitors are browsers looking for radiant links or free information, but about 2 percent represent local prospects. That's still a lot of leads for a little company like ART, and even with their small closing percentage, it's still an economical way to go to market. "It's remarkable that more than 60 percent of our business comes from such a small percentage of people who visit our Web site," remarks Pollets.
About 80 percent of ART's business comes from new installations, but they see the service end, boosted by their forensics skills, as becoming more important in the future. "Many new construction companies don't want to do service. We're there for that. Over time our company's success ultimately will depend on attracting service business," says Pollets.
"Hydronics has a large future," he adds. "Our nation as a whole is kidding itself by not reducing energy consumption considerably, and the time will come when fuel costs jump to over $2 a gallon. When that happens, hydronics' upfront cost will be outweighed by its return on investment."
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