HVAC Turns 13!: Where Did My Sales Go? Post 13 SEER Sales

October 23, 2006
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As a traveling sales trainer, coach, and business development consultant, I have had the good fortune to travel coast to coast since the 13 SEER mandate took effect in January. Since that date, top-performing contractors have told me they've seen the need to enter an entirely new realm of professional selling in order to differentiate themselves and win more sales.

This sea change is due to the fact that the increased energy savings experienced with 13-plus SEER equipment doesn't typically yield a compelling return on investment or payback scenario. That's especially the case when you consider that much of the cooling equipment already installed in the market from 12 to 15 years ago is 10 SEER or higher.

So, what are salespeople to do if they want to sell higher efficiency equipment today? The following approaches are some of the ideas I have seen salespeople use more frequently since January to help successfully win more higher-end sales:

- 1 -
Focus on building your company's bond, trust, rapport, respect, integrity, and credibility.
Absent a relationship with the salesperson, customers tend to comparison shop for HVAC products much like they shop for all other goods.

- 2 -
Educate your customers.
Good salespeople will point out that installed systems are not commodities and educate customers how to make the proper buying decision, whether it's from them or any other contractor.

- 3 -
Spend more time qualifying a sales opportunity to determine the customer's wants, wishes, needs, desires, problems, etc.
Working at an emotional level will lead them to want you to solve their problems, whatever the cost, because they know you have their best interests at heart.

- 4 -
Perform an ACCA Manual J Version 8 heat loss-heat gain load calculation and share the results with the homeowner.
Explain the importance of this procedure and why they should not do business with a contractor who is unwilling or unable to provide the same documentation to support their recommendations.

- 5 -
Quality installation is important.
Explain that the equipment is just a box until someone installs it. Even the best and most efficient equipment may not deliver the designed capacity or efficiency and could be rendered completely useless if installed improperly.

- 6 -
Guarantee system performance and comfort in writing with a certificate of compliance.
Stress your documented procedures for designing, installing, testing, balancing, and measuring performance. Share this with customers and encourage them to get competitors to commit to the same in writing. From my experience, it won't happen, and you'll win the sale.

- 7 -
Show your products' certifications.
List the ARI (Air-Conditioning and Refrigeration Institute) certified system reference and GAMA (Gas Appliance Manufacturers' Association) identification numbers on your quotes, proposals, and sales agreements and document that you are installing a matching condensing unit and evaporator coil. You can also print the ARI and GAMA certificates to show customers that you certify your equipment ratings. Encourage customers to have other contractors provide the same information.

- 8 -
Explain the standard discrepancies.
Explain that while the 2006 mandate calls for a 13 SEER minimum, the EPA/DOE (Environmental Protection Agency/Department of Energy) Energy Star minimum standard for 2006 is 14 SEER. These two agencies, along with ARI, are striving to establish a dual rating system for 2007 and beyond that would rate the actual matched equipment components and certify those ratings in the field once installed via an independent third party inspection. Basically, an installation would have an equipment component efficiency rating and an installed efficiency rating.

- 9 -
Getting a tax break.
The 2006-2008 federal tax credit starts with 15 SEER/12.5 EER air conditioners and 15 SEER/13 EER heat pumps. Help homeowners realize that they can recoup some of their tax dollars by investing in their home, comfort, indoor air quality, and energy savings.

- 10 -
Higher SEERs tend to have better manufacturer warranties.
Make sure homeowners are aware that higher-grade equipment tends to carry better warranties from the manufacturer.

- 11 -
Consider extending workmanship warranties on the equipment you offer.
Offer longer extended warranties (beyond those provided by the manufacturer) on higher-efficiency equipment. Consider warranties of seven, 10, 12, and 15 years on all components and workmanship on increasing levels of efficiency. Offer a lifetime warranty on high-efficiency compressors to the original owner. The warranty could default to a 10-year warranty if the house is sold.

- 12 -
Offer money-back guarantees.
To supplement equipment warranties, offer stronger guarantees on better systems. Consider a 100 percent unconditional satisfaction or your money back guarantee, a "lemon-free" compressor guarantee, an energy savings guarantee, a comfort guarantee to achieve design temperatures for up to five years, etc.

- 13 -
The odds are against contractors staying in business.
Explain how contractors are the second most failed business after restaurants and that almost 80 percent of all contractors who start a business are out of business within 10 years. In many cases, this occurs before the warranties expire, leaving customers in a lurch. Use old and current copies of Yellow Pages to illustrate your point.

- 14 -
Let them know you don't use subcontractors.
Point out that your company performs its own installations with no subcontractors. State that all your employees are randomly drug tested, have clean criminal background and credit checks, are continuously trained, and carry workman's compensation insurance protection. Further, provide a respect and installation workmanship guarantee that states the work will be performed in a professional manner that will meet or exceed industry standards and that your installers will respect the customer and their property at all times with shoes covers, drop cloths, clean up, no smoking, no music, etc.

- 15 -
Show off where you exceed industry standards.
Indicate where and why you exceed industry standards and those of others in the market without bashing the competition. Further enhance your professionalism by offering to provide copies of licenses, permits, and certificates of insurance.

- 16 -
Complete the package.
Concentrate on selling complete heating and cooling systems versus components. Even look at the water heater, duct system, thermal envelope, electrical panel, etc.

- 17 -
Tell them you sell more than equipment.
Most contractors just want to sell equipment. Explain that you sell comfort, energy savings, indoor air quality, and whole-house solutions that require you to address existing system inadequacies that may compromise performance, comfort, system longevity, energy savings, etc.

- 18 -
Think outside the box.
Provide comfort solutions beyond the box by correcting existing comfort, indoor air quality, and energy wasting problems.

- 19 -
Provide a solution to their problems.
Explain that you are not just providing an equipment replacement, but rather a system overhaul and complete solution due to the deficiencies of the existing system and requirements of current technology. For example, explain how the new evaporator coils are physically larger and in many cases may require ductwork to be modified to achieve proper airflow across the entire coil. Stress that not doing so is a shortcut for most companies.

- 20 -
Specify the benefits of the new equipment.
This should include the following:

a) Most new equipment, 13 SEER and higher, utilizes R-410A versus R-22 refrigerant, which requires refrigerant line sets to be changed out. Tell the customer how this new refrigerant is environmentally friendly and will be more readily available and economical in the future than R-22. This also holds true for replacement repair parts for R-22 equipment.

b) Higher-efficiency systems, especially those with dual-speed compressors, dual compressors, and/or variable-speed indoor fans provide enhanced dehumidification and deliver improved comfort.

c) Enhanced dehumidification may allow homeowners to raise the thermostat setting a couple degrees and not sacrifice comfort and realize increased energy savings. It also is one component of healthier indoor air quality.

d) Higher-grade units tend to have enhanced onboard diagnostic modules that make serviceability easier and quicker for technicians. This results in getting the system back online more quickly when there is a problem.

e) Higher-grade equipment tends to be constructed better with full louvered jackets, condenser fan guards, insulated compressor compartment, compressor blankets, etc.

f) High-end equipment tends to operate at lower sound levels and thus yields a quieter installation.

- 21 -
Entice customers.
To "incentivise" high-end purchases, include system maintenance, remote system monitoring, IAQ monitoring, etc.

- 22 -
Offer packaged deals.
Bundle humidifiers, carbon monoxide detectors, high-efficiency filters, UV lights, duct cleaning and sanitizing, duct sealing, etc., in progressively increasing value-added packages with higher end systems. Offer them at a package discount with high-end purchases.

- 23 -
Make your installation look good.
Sell the aesthetics of your installation (line set enclosures, crushed stone under pad, landscape timbers around stone, azalea or rhododendron bushes around unit), as well as acoustics (duct insulation, vinyl duct connections, rubber/cork vibration isolation pads), humidity control, healthier indoor air, etc.

- 24 -
Go for the gold standard.
Describe how customers who purchase a premium system achieve elite status with your company by receiving better service, newsletters, special offers, loyalty credits, etc.

- 25 -
Break it down for monthly payments.
Demonstrate how customers can afford to own a better system by using monthly payments and energy savings to justify price differences over the life of the system (or however long they plan to stay in the home). In many instances the energy savings, payback, and return on investment story are still viable.

- 26 -
Don't focus on selling brands, specific models, or price.
In other words, your selling style should be solution focused, not price and product focused or you run the risk of the equipment being perceived as a commodity. Sell the benefits and stop using manufacturers' brochures.

- 27 -
Sell down, not up.
Start by offering your best system first and work down from there. It's harder for customers to give up something they want when moving to a lower grade than for them to justify the price increase when buying something better. Customers don't like to add on, but they dislike it more when you take away benefits.

- 28 -
Give them value for their money.
Demonstrate that your recommendation is the best value for their investment dollar and that your solution will address all their needs.

- 29-
Show before and after pictures.
Also show photos of the types of homes you have worked on. Also include testimonial letters, then organize the booklet by zip code.

- 30 -
Plan a return visit.
Tell the customer that you will be back after the installation to explain system operation, perform a quality control audit, verify their complete satisfaction, and get a referral that you only want them to provide if your company has earned it.

- 31 -
Remember to say thank you.
Send a handwritten thank-you note from the salesperson, a personally signed, typed thank-you letter from the owner, and deliver a thank-you gift upon completion of the installation.

This list is by no means all inclusive, but the techniques described will definitely help customers realize the many benefits to investing in a better system and doing business with a superior company.

Publication date: 10/23/2006

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