ACHRNEWS

Contractor, Home Depot Equals Success

June 11, 2007

It’s been seven years since Trane and Home Depot announced its agreement featuring Home Depot as a sales lead generator for local Trane Comfort Specialist Dealers. In early 2000, the two companies began a pilot program in seven stores that has now expanded to 800 dealers across the United States.

The program includes lead generation and appointment management. Home Depot assumes the credit risks and costs associated with financing. Participating Trane dealers can benefit from Trane’s advertising investment as well as Home Depot’s.

For Trane’s distribution, the program works just like any other sale, with the dealer making the sale, supported by the distributor. The dealer still makes the sales call and handles installation.  The only difference is that Home Depot is billing the consumer, and the dealer is billing Home Depot.

THE BURGESS STORY

Trane contractors have reported varying degrees of success with the program. One company that has reported a positive relationship has been Burgess Heating & Air Inc., Safety Harbor, Fla.

Burgess hires employees that work at the Home Depot store display to generate appointments, but from there, the process is much like any other sale for Burgess. Teams are branded Burgess in trucks and uniforms.

Burgess’ sales mix is about the same, whether they sell to direct leads or Home Depot leads. Their overall sales mix of Home Depot versus other sales is about 50/50.

Randy Burgess, president, said his company’s experience with Home Depot has not been without a few pitfalls, but overall the program has worked well. “There has been a learning curve involved for Home Depot, Trane, and the local contractor,” he said.

Burgess’ Sherry Lacy, appointment generator, at the Trane display in a Tampa-area Home Depot.

“The relationship began with a sense of doubt - maybe even suspicion - but has evolved to one of cooperation and trust, a partnership to provide customer satisfaction to the benefit of all.”

Burgess has heard about the animosity of some HVAC contractors toward Home Depot, but it didn’t shape his decision to partner up with the retail giant. “Some contractors may have a problem with someone looking over their shoulder,” he said. “We take a positive approach. Our corporate culture places an emphasis on quality installations and service in order to provide customer satisfaction. We don’t perceive Home Depot as a ‘Big Brother.’ Instead we look upon them as a partner in success.”

Burgess believes that, although Home Depot has the ability to serve the Trane customers, they will not interfere with the service provided by his company. “In the sense of partnership, we believe that we are a team whose purpose is to serve the customer and promote satisfaction through quality and professionalism,” he said. “Once the installation is complete, the customer knows that we will provide warranty support and service after the sale. They become our customers, but still Home Depot is there to support them and us should the need arise.”

With the high cost of attaining a customer, not to mention retaining one, the leads generated by Home Depot exposure do not come at a small price, at least according to Burgess.

“When analyzed over the span of a year, the cost per lead is a bit higher, but the volume of leads and Home Depot’s easy financial arrangements makes the process fairly seamless,” he said.

“There has been some confusion as to the difference between Home Services and in-store purchases, but the incidents of customers expecting the lowest price through Home Depot has been minimal. I would say that there have been an equal amount of price shoppers when compared to traditional advertising venues.”

Burgess noted Home Depot would continue to be part of his business model, especially in light of the fact that other Trane dealers have expressed some envy toward his success.

“We have been approached numerous times by other contractors wanting to know our secret for success,” he said. “Our secret is a dedication to professionalism and quality from the initial contact with our appointment generators in the store to our customer service representatives final follow-up after the installation. 

“Since the inception of the program locally, we have increased our Home Depot stable from one store to five stores covering a tri-county area and are anticipating adding a sixth store in the near future. Our experience with Home Depot has been one of growth and profitability. It has been a win-win-win situation for all members of this team.”

Publication date: 06/11/2007