Contractors Sell More High-End Furnaces
It may sound harsh, but that's actually good news for the heating industry. As homeowners see higher energy bills, they will look at their gas-consuming appliances to see where improvements can be made. Replacing the old 60- to 70-percent efficient furnace suddenly seems to be a logical way to reduce the utility bill, while improving comfort in the home.
For these reasons, many homeowners are expressing greater interest in high-end furnaces. This ultimately benefits homeowners, as they'll have more comfortable homes and lower utility bills. Contractors also benefit, as more expensive furnaces generally mean healthier profits.
The High-End FurnaceSo what exactly constitutes a high-end gas furnace? Some say it's anything more than 80-percent efficient. Others say it's more than 90-percent efficient. The contractors interviewed for this article state that they consider high-end models to be two-stage and/or variable-speed furnaces that are 92-percent-plus efficient.
Gary Pennington, owner/executive vice president, Lozier Heating and Cooling, Des Moines, Iowa, notes, "We look at the single-stage, 92-percent-efficient furnace as basically the entry level, which a lot of people would consider to be high end. What represents a greater share of our business is the two-stage, 93-percent- to 94-percent-efficient furnaces (usually Lennox), and I would say that a good share of those are going to have variable-speed blowers."
Pennington states that his company doesn't place a preseason order for 80-percent-efficient furnaces and that they don't even have many requests for 90-percent-efficient models. Given that Lozier salespeople sold more than $1 million in high-end furnaces last year, it's obvious they know what their customers are looking for.
"We maintain the logic that if we don't go in and solve all the problems for the customer, we are not doing the customer a real service," says Pennington.
Jim Honyotski, vice president, East Coast Mechanical Inc., Cheshire, Conn., sells a lot of Trane high-end furnaces. "They're a good business for us for a couple of reasons. The first is they make happier customers. A two-stage furnace, and certainly a variable-speed furnace, delivers much better, more even comfort to the homeowner. And realistically, a higher end furnace is better for our bottom line."
Making The SaleSome contractors say it's difficult to sell higher end furnaces, given that they can cost $1,000 to $1,500 more than a base model. Honyotski doesn't share this belief. "It's really not that hard to make the sale," he says. "Most of the customers today have already done the research, and they sort of know what they're looking for."
Too often, he says, the heating industry has stated that homeowners need an 80,000-Btu, 80-percent efficient, single-speed, "cheap" furnace. But, according to Honyotski, the majority of homeowners really aren't looking for the cheapest possible product - they want supreme comfort. To illustrate, he uses a great shoe analogy:
"A salesperson can ask what size shoe you wear, and leave it at that. We ask [the equivalent of], â€˜Do you have high arches? Flat feet? Small heels?' Based on that information, we can put a customer in a very comfortable â€˜set of shoes' that will handle all those issues - and many people want that."
Honyotski's salespeople spend 45 to 90 minutes with each customer, going over a detailed questionnaire that helps define the customer's meaning of comfort. Questions include:
Based on the answers, the salesperson can determine the best heating system for the homeowner. The interview process also helps East Coast Mechanical in another way. "It definitely differentiates us from the competition," says Honyotski. "We're not in and out in 15 minutes. We spend the time to evaluate the whole system. We look at ductwork, insulation, and the equipment. We try to get the whole picture."
Pennington also believes in spending a great deal of time with a customer. He uses a questionnaire similar to Honyotski's to determine a customer's comfort needs. "We try to find out if there are any issues as far as the comfort level in the home. We also ask if they want to reduce energy costs. If we can increase the comfort level and reduce their energy costs, we have done a good job."
Don't PrejudgeOne of the biggest reasons why Lozier Heating and Cooling is so successful at selling high-end furnaces is that the salespeople don't prejudge the customers. This is extremely important, says Pennington.
"A lot of people might say older people who are on a fixed income don't need a high-end furnace, so they don't even bother offering one. I feel that's a lot of preconceived notions. If you look in the garages for a lot of these older people, you'll see a Cadillac. And they have the same, if not more, comfort issues than the 30- or 40-year-old," says Pennington.
Even modest or slightly shabby homes may have owners who want expensive furnaces. In fact, Pennington says he often has more luck with blue-collar owners, rather than more affluent owners, because they take the time to listen to what he has to say.
"There are questionable areas in all towns, but those homeowners could have plenty of money in the bank. Maybe the house is paid for, and the owner can afford to buy a more expensive furnace. This may be a better situation than on the other side of town, where people have $300,000 houses, but they're mortgaged to the hilt, and they don't have $100 to spare," says Pennington.
What if a customer decides not to install a high-end furnace? No big deal, says Honyotski. "The only thing we encourage our customers to buy is us. We'll sit down and find which of the five or six different furnaces is best for the homeowner. But we want him to buy from us."
Publication date: 11/24/2003