Online Proposal Technology Sparks Debate

January 28, 2008
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The HVAC industry has debated proper sales techniques and good customer service practices for decades. The good, better, best theory may have come and gone as the rise of 13 SEER and higher efficiency units have shifted the sales model to reflect performance, not price. In the midst of this shift, Internet business ideas are beginning to spark and some are flourishing while others are causing debate.

The NEWS recently came across a contractor implementing a newer approach to online sales. After asking multiple contractors for their opinion, we discovered a debate looming on the HVAC industry’s sales technology horizon.



SYSTEM ANALYSIS

With a new generation of customers often demanding instant information and gratification, at least one contractor has brought a system online to meet this need. His instant proposal system allows customers to come to the company’s Website, shop, and then receive a complete equipment quote in less than 15 minutes. Once arriving at the site, customers can choose what type of equipment they are looking for, such as a furnace or an air conditioner, etc. Having chosen the equipment, when customers click on “Pricing,” a menu-driven system guides them through a series of questions to help the computer generate a custom proposal. The questions, among others, include:

• What heating and air conditioning product pricing can we create for you?

• What type of fuel do you use to heat your home?

• Which of the following most closely resembles your home?

• Do you have a basement?

• Where is the furnace located?

• How many bedrooms do you have?

• Do you have a floor drain in the same room as the furnace?

• On which side of the house is your existing outdoor cooling unit located?

• When was your home built?

• What is the model number from your existing cooling system?

• How many square feet of living space is in your home?

After answering the questions, the system asks for customers’ contact information and then prompts them to review their answers. Once complete, the computer generates the quote for immediate review and sends a copy of the proposal to the e-mail account that the customer provided. “As promised, here’s your price. If you would like an in-home estimate or would like any questions answered regarding this proposal, please call.”

The proposal, which is good for one year, chooses a piece of equipment and then lists tasks that will be performed in a contract style manner, offering a base price, financing options, special offers, and a place to sign at the bottom.

“The installed base price includes the listed equipment, parts, and labor. Optional pricing, upgrades, and $165 for electrical and mechanical permits, when required, must be added for a total project price which may be financed.”

Below this contract, multiple pieces of equipment, including IAQ components, are pictured, described, and then offered as upgrades. The names of two members of the company’s staff along with their direct extensions are provided.

After receiving a proposal, customers are required to contact the company to complete the transaction and make further arrangements.



WE HAVE A WINNER?

According to Steven Long, vice president of service and residential for Gastonia Sheet Metal Heating & Air, Gastonia, N.C., there are some solid positives to this online sales model.

“The idea of an electronic proposal system is quick, it saves paper, and is rather professional,” he pointed out. “The format makes it easy to include links and to update and revise equipment information.”

He was concerned, however, about the loss of face time and the impersonal touch this convenience deprives the contractor.

“Nothing is better than sitting down with the customer and selling yourself and the company,” he said.

Greg Harnist, vice president of Corcoran and Harnist Heating and Air Conditioning, Cincinnati, conceded that this online system would save the contractor and the customer time, but he questioned the computer’s ability to quote an accurate price without having seen the jobsite.

“Without seeing the jobsite, you would not know what you are up against for the installation and the access at the job,” he said. “I believe you need to see the installation to know how to price it.”

Other contractors were not as open minded to this technological advance in doing HVAC business on the Internet and they raised serious concerns about customer service, proper installation, and contractor image.

“If I were an equipment manufacturer, I think that this is fine. But I’m a service company, and we pride ourselves as being client oriented,” said Ken Bodwell, principal of Innovative Service Solutions in Orlando, Fla.

“If you look up the definition of customer, it’s somebody that is shopping or buying a product, but if you look up client it is someone seeking professional guidance. So, how do you give professional guidance over the Internet? The same way you get personal attention from an automated answering phone.”

Proper installation questions also arose as contractors contemplated this online proposal concept. “If I am not talking with a live person, then how can I meet their goals for comfort?” asked Bob Zahm, president of Huntington Heating and Cooling Inc. in Huntington, Ind. “And worse, I cannot do a proper heat gain/loss on the structure, I can’t see the ductwork to know if it is properly sized, and I cannot take control of the sales process to show the client what they truly need for optimum performance.

“By adopting this system, I would be stating that the equipment ‘is just a box, like all other boxes,’ and then price would be all that mattered.”

Bodwell voiced many of the same concerns. “As service contractors, our product is the quality of our labor and I reject any suggestion that it is a commodity to be bid on.”

“If you want to be a contractor, it is essential for you to visit the home,” agreed Sonny Knobloch, president of Help Air Conditioning & Heating, New Orleans.



MAN VERSUS MACHINE ... STILL

As the world works to adopt new business practices and technology continues to advance, debates will continue to fuel the classic man versus machine battle. Doing business on the Internet is a fairly new frontier for the HVAC industry and the early adopters have many things to consider as they reshape the balance between what the customer wants and what the customer needs.

The NEWS would like to hear your opinion. Log onto www.achrnews.com and click on “Survey Says” to let us know what you think about online proposals.

Publication Date: 01/28/2008

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