The Art of Marketing High-End Furnaces
Two of the manufacturers in the HVAC trade — WaterFurnace and Rheem — have some good ideas on how to approach homeowners and some selling tips that will likely turn a lot of heads. Both manufacturers have well-established brand identities in the market, which is a strong base from which to start.
Tim Litton, director of marketing for WaterFurnace, feels very strongly about brand recognition. “At WaterFurnace, we believe in elevating the brand,” he said. “Although we’re extremely proud of our products, they are a result of our culture, our passion, our ideals — our brand promise. Products (even great ones) come and go. The brand is consistent; it’s lasting.
“Building a connection with the brand creates a more loyal, long-lasting relationship. Those customers aren’t singularly focused on price or specs and buy into what the brand represents. If we live up to our brand promise, that connection is hard to break.”
At Rheem, branding is taking on a whole new look. Terry Stern, Rheem’s product manager overseeing residential heating solutions, said, “In 2011, we overhauled Rheem’s company website as part of a large-scale rebranding initiative. The new Rheem website is highly visual in nature and provides several intuitive and interactive features under a new Homeowners tab.
“This section includes a revamped Local Contractor feature which enables consumers to search nearby contractors by products installed and services provided, such as financing, rebates, water heating authorized service providers, and an online HVAC system selection program.”
Educating the Homeowners
Product knowledge gives homeowners the big picture. In the HVAC trade, traditional selling methods centered on a good-better-best scenario. In order to give homeowners choices, HVAC salespeople have felt the need to explain the features, benefits, and the costs of each level of equipment. Now, thanks to the Internet and word-of-mouth, there are more educated consumers who are willing to pay more if they know they will be rewarded with more comfort, higher efficiency, and lower energy bills.
“If your customer base is built around selling the fastest ,or the highest, or the cheapest product, what happens when someone becomes faster, higher, or cheaper?” asked Litton. “It will happen at some point, and your customers will jump ship because they no longer have a reason to stay.”
“Contractors must be sure they understand the consumer’s needs before engaging in a dialogue about high-efficiency furnaces,” said Stern. “The fact is, consumers who are focused on value offerings likely won’t be interested in a high-end furnace due to the upfront cost. However, homeowners who understand the annual cost savings, efficiencies, and desire the technology and ease-of-use associated with these specific furnaces will be more receptive to learning about high efficiency furnaces from contractors.”
Knowing the customer’s needs is often the real key to selling high-end furnaces. “Contractors can develop a series of questions before meeting with the homeowner that can help determine their family’s needs and desires, and if a high-end furnace is the right solution,” Stern said. “Then, before contractors be-
gin engaging in discussions with targeted customers, they should ensure they clearly understand what distinguishes high-efficiency furnaces from lower-end models.
“It’s important to realize that not every consumer will be interested in purchasing high-efficiency furnaces. Those consumers who are interested in high-end furnaces will appreciate the fact that these units are more energy efficient and cost less annually to operate; reduce service time and costs through alerts and diagnostic technologies; and provide greater comfort through communicating technologies and indoor air quality features.”
In the case of geothermal heating, homeowners need a clear understanding of the process as much as they need an understanding of the brand name, according to Litton.
“Customer education and brand awareness are equally crucial,” he said. “Without one, the other is fragile. Customers who’ve heard of WaterFurnace but don’t realize how geothermal can benefit their lives aren’t going to buy a system — of any brand. It’s an investment and requires a certain amount of education.
“Conversely, if a consumer understands geothermal completely but WaterFurnace never becomes part of the conversation, we both lose.”
Explaining the Costs
The phrase “sticker shock” carries a negative connotation and often has an immediate impact on a buying decision. If a homeowner doesn’t understand the costs of a new installation or replacement system, they often choose to go the least painful way — and choose the cheapest instead of the best. Again, education is the key.
“Geothermal heating and cooling is growing in awareness, but still has a long way to go,” said Litton. “There are misconceptions how these systems work and a lot of misinformation out there. Solar and wind are what people generally talk about in the renewables space. Part of that stems from the fact that they both have very visible components to advertise adoption.
“Geothermal is completely underground and after the initial installation, is completely inconspicuous. You may never realize that you drive by geothermal households every day. The upside to being completely underground is that our technology is available 24 hours a day, year round — regardless of outside conditions.”
Litton also pointed out that geothermal can be cost-effective as part of a larger hybrid system. “We may see a future where solar and geothermal are close partners, as they complement each other,” he said. “Solar generates electricity and can create certain benefits for our loop. Geothermal uses far less of that electricity and can reduce the total requirement for panels — saving money on installation and space.”
Litton said that HVAC salespeople should try and deemphasize installation costs and focus on comfort and lower energy bills. “We need to move the conversation from initial costs to cash flow, return on investment, and total cost of ownership,” he said. “Our products provide long-term benefits that far outweigh the initial outlay of money.”
But he added, “At WaterFurnace, we offer attractive, easy-to-secure financing to help overcome the initial price barrier. Financing is an important tool and geothermal contractors should offer it with every job.”
Stern noted that high-efficiency does not have to come with a high price tag, something consumers often believe go hand-in-hand. “High efficiency furnaces have annual fuel utilization efficiency (AFUE) ratings of 85 percent or greater, making them up to 15 percent more efficient than standard models,” he said. “When consumers install high-efficiency furnaces, they can save on utility bills which is important in today’s challenging economic climate.”
Stern used one of Rheem’s products — the Rheem Prestige Series modulating 95 percent AFUE Gas Furnace — to support his statement. “This unit feature modulating gas valves which can greatly improve the efficiency of the units,” he said. “Ultimately, modulation technology ensures the furnace functions in its most efficient operating mode, making it cost less to operate annually. The modulating gas valves work by varying the firing rate to match the heat loss.
“On cold winter nights, the furnace may operate at full capacity, while it may operate at 50 percent capacity on a brisk autumn day. What’s more, this unit’s modulating technology ensures the furnace maintains a temperature within 1/2-degree of the set point on the thermostat, thereby promising precise home comfort.”
The ultimate tool — at least in 2011 — for communicating and educating is the smart phone applications. And HVAC customers can get an eyeful of information on their iPhones from manufacturers like Rheem.
“We are in the process of developing an Apple iPad app that contractors can share with homeowners,” said Stern. “This app will be highly visual and arranged in a logical, user-friendly format. As more consumers begin using iPads and other technologies in their everyday lives, it will be important for contractors to communicate with them in an advanced manner.
“For sophisticated heating and cooling products — like high-efficiency furnaces — educating consumers about the advanced aspects of these solutions via progressive devices like iPads will resonate well.”
Score another victory for selling high-end furnaces.
Publication date: 11/14/2011