ACHRNEWS

My Two Cents: Cheap Tune-Up Can Provide High Cost for Contractor, Industry

June 11, 2012
I hope you had a chance to read the recent article in this magazine by Joanna Turpin regarding “Going Against the $29 Tune-up.” I was especially interested in the article and the input Joanna received from a number of contractors. There were mixed opinions from the contractors who responded on the subject. I have to declare that this is not a subject on which I have mixed feelings. In fact, I have very strong feelings that the extremely low price, or even free, “come-on” service call is a bad thing for our industry. As far back as 60 years ago, “furnace companies” would travel door-to-door and offer a “free” furnace check. The unsuspecting consumer would soon find that if there wasn’t something wrong with the furnace when the man arrived, there would be something wrong before he left.

As a result of door-to-door tactics like that, the reputation of our industry was damaged significantly. No individual involved in the industry wanted to admit he was a “furnace man.” That was hard to escape when your company was named Welsch Furnace Co. as ours was then. It took many years and considerable efforts by a great number of industry professionals to change that reputation of the furnace and then furnace and air conditioning business.

Fortunately, these professionals worked hard through the years, and by using more legitimate advertising and sales methods greatly improved the image of the industry. At one time the furnace and air conditioning business was the No. 1 source of complaints recorded by the Better Business Bureau. In recent years, our industry has not even been in the top 10 in the BBB’s list of industries by complaints.

As we all know, it is much easier to destroy a positive image than it is to correct an image that has been tarnished. We don’t ever want to again be put in a position where we have to expend effort and dollars to correct our image. Let’s not let ourselves get trapped into using tactics that will tarnish the good image we have worked to establish. If we succumb to offering service calls or checkups at prices that are not at levels that we can legitimately justify, the public will soon assume that any offers we make are not legitimate. While the buying public typically does not understand nor appreciate all of the costs that we have in putting a service technician on the street, they can quickly calculate that there is a certain minimum level one must obtain to not lose a significant amount of money on a service call.

What Customers Do You Want?

Let’s not just throw out a number that we know is so low that it will attract every price shopper in the area. Do we really want those price shoppers as customers anyway?

It’s likely that next month or next year, when a competitor down the street or around town puts up an even lower “get their attention” price, that customer is going to change his allegiance from you just as quickly as he changed it to you. If I encounter a friend who tells me he has used a competitor of mine for years and that he is loyal to that company, I tell him I admire that in an individual and feel that those types of customers are the customers we like the best. I will also mention that if he ever becomes dissatisfied with that company, we would be happy to serve him, but appreciate his loyalty. I feel strongly that someone who switches to me from a competitor without giving it much thought may just as quickly change to another competitor without giving it much thought.

While on the subject of offering a low price offer to obtain new customers, I must explain the other reason why I strongly dislike this practice. We have hundreds, really a few thousand, customers who have been loyal customers of ours for many years. Some have been customers since I started in the business 49 years ago. Is it really right for me to offer a special lower price to a new customer who has never spent a penny with us than the price I charge to that customer who has been loyal to us and has probably spent thousands of dollars with us through the years? I simply don’t feel that is right.

I realize that not all contractors are going to agree with my position; however, I hope at least you will remember the potential negative effect that offering unrealistic low prices can have on the long-term image of our industry.

Publication date: 6/11/2012