HVAC Residential Market / Business Services

Coupons Drive Business, Attract New Customers

Jury Out on Success of Deep Discount Sites

December 23, 2013
Trans

Mark Paup had long been looking for a way to increase business on Wednesdays and Thursdays. Three years ago, he came up with an idea that did just that: Way Low Wednesdays.

Paup would offer customers $50 off any service at Golden Rule Plumbing, Heating & Cooling, Grimes, Iowa, where he’s president, if they scheduled service for Wednesday. The rest, they say, is history.

“It’s amazing how many people will call us now and bring up the Wednesday coupon. They’re more interested in waiting until Wednesday because it’ll save them a buck,” Paup said. “Wednesdays have become a busy day for us.”

Not only that, the gimmick has allowed Paup’s customer service representatives (CSRs) to use it as a tool when dealing with potential or existing customers.

“When we’re busy, our CSRs can use it to schedule people on Wednesdays,” Paup said. “If we’re packed on Monday and Tuesday, they can bring up Way Low Wednesday and people are willing to wait. It builds business because 35 percent of our customers come through online now, so most of them are seeing that, and a certain percentage of them are booking for Wednesday.”

Thinking Outside the Box

Paup isn’t the only HVAC contractor doing something different to drum up business. More and more managers are considering nontraditional methods to maximize their spot in the marketplace.

Aimee Sharrett, marketing director,   , Clayton, N.C., said her company decided to accept competitor coupons, because, if it works in other industries, why not HVAC?

“We looked at what the other companies in the area were offering and decided it was feasible for us to match their offers,” Sharrett said. “We don’t want to lose the opportunity to show a client what makes CCA different from the rest just because the other companies put a better coupon out than we did.”

Jeff Miller, president, Al-Don Indoor Air Quality Specialists LLC, St. Louis, implemented a yard sign program, where customers who put his sign up receive in-store credit for future service. Additionally, he offers a referral certificate on his website along with coupons on different products he sells.

“We’ve been around so long, one of the big challenges we have is gaining new customers,” Miller said. “Many of our older, loyal customers are either moving into retirement communities, moving out of state, or passing away, unfortunately. Coupons have helped us gain new customers. There’s no one silver bullet by any means, but you have to expand your marketing avenues and see what works.”

With the Web becoming such a big influence on contractors and how they attract business, Miller said he’s willing to do whatever he can to get potential customers to visit Al-Don’s website.

“What we’re trying to do is drive people to our website, that’s the bottom line,” Miller said. “If they go to our website, they’ll get educated about us and what we do. They’ll see the coupons and then think of what else they can take advantage of — to dig deeper, and see what you have to offer.”

Discount Sites

Another option relatively new to contractors is the use of discount sites such as Groupon, LivingSocial, and Amazon Local.

If you ask a sampling of contractors their thoughts on this medium, you’ll probably get a wide variety of responses. With these sites, companies can offer, for example, a furnace tune-up, regularly valued at $89, for $39. Of that $39 paid by the customer, the discount host site typically earns half of the amount, while the contractor gains the other half. Essentially, the contractor is providing an $89 tune-up for $19.50.

Jay Jahantash, president, Smart Air Cooling & Heating, Houston, has offered multiple deals on these sites and has been extremely pleased with their success.

Jahantash said he views offering his services through this medium as a form of advertising, a way to get his company’s name out there. He called it one of the most successful ways to approach advertising.

“As an owner, you’re not spending money on the advertisement, and you gain customers,” Jahantash said.

“Sure, you have to share half of the money with Living Social and Groupon, but you get the opportunity to meet the client, introduce yourself, and perform a job for them so they can experience the type of work and service you provide. That itself has worked for us, because we know what we’re doing. The clients see how great our service is, and the chances of them using us in the future are a lot higher. It’s been a great way for us to advertise.”

Other contractors are reporting unfavorable results with such sites. Sharrett said Carolina Comfort Air was discouraged from doing business with these websites due to their detrimental requirements and fees.

“Our services are valuable and instead of taking part of the discount to pay for someone to put our specials on their page, we use our website and social media to do the same thing while passing the true savings on to the clients themselves,” Sharrett said. “We want to be sure our clients truly benefit from our specials.”

Regarding discount sites, Miller’s heard the good, the bad, and even the ugly from contractors. As of now, he’s decided to stay away, but said he did offer a deep discount coupon in a local magazine. The key, though, he noted, was to limit how often the deal is marketed, so that it doesn’t serve as an insult to current customers.

“If you’re trying to get new customers, it’s not a bad strategy as it can help to penetrate areas that you haven’t approached yet,” Miller said. “I don’t want it to be a bait-and-switch by any means, but as long as you do what you say you’re going to do, it’s a way to — in this economy, with competition being tough — get your name out there.”

Paup has had first-hand experience with discount sites. After offering one for the HVAC side of his business to mixed results, he tendered a deal for the plumbing side earlier this year, which he admits was a train wreck.

“It seems to bring in a lower-class customer,” he said. “We found our average ticket drops by about $100-$150 on those calls.”

Although he has gotten some return business out of it, and was able to convert some of these “thrift shoppers” into service plan club members, the wounds are still fresh, he joked, noting he’ll never do it again.

“It was hard to build value because people were expecting you to come out and do anything, everything for around $75 or $100. They’re really clueless as to true costs,” Paup said. “So $150 in the customer’s mind is a lot, they think it should cover most problems. In the real world, it doesn’t. When you try to go in and build the value, and tell them it’s going to be a $300 call, they think $150 is enough because the Groupon said so.”

Even though the jury is still out on discount sites, coupons and discounts aren’t going away any time soon, as they, at the very least, remain a viable way of bringing in new customers, and keeping current clients happy.

“We extend our coupons to existing customers as well as new customers and both groups have redeemed them,” Sharrett said.

“The existing customers like the opportunity to save with a company they have already done business with and value that we offer the savings to them and not just new customers. New customers love the coupons because they allow them to try us out and save at the same time. We’ve made a lot of long-term customers that came to us from our coupon offerings. From system repairs to maintenance to replacements, saving the client money is always a great way to make them happy and keep your company in their good graces.”

Publication date: 12/23/2013 

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