ACHRNEWS

HVAC turns 13!: Contractors Have Various Opinions Regarding Selling

April 17, 2006
(COURTESY OF PETE DETLEF)
If you want to start an interesting debate, just ask contractors what they believe is the best selling approach in this post-13 SEER world. You will get your fair share of opinions regarding the proper strategies and options.

"I think you will need to be somewhat adaptive at doing several methods of selling to the customer," insisted Larry Taylor, president of Air Rite Air Conditioning Co., Ft. Worth, Texas. "I even think that we must get away from ‘selling the customer,' and more to the side of serving and satisfying the customer's needs."

Aaron York Sr., president of Aaron York's Quality Air Conditioning and Heating, Indianapolis, was in total agreement.

"Our challenge is to meet customer needs," he stressed, "instead of providing what we think they want. In truth, customers lack knowledge of all the life-enhancing products we have available. We owe it to homeowners to explain the wonderful benefits and offer them to homeowners."

In the eyes of some contractors, this can be accomplished via the tried-and-true good, better, best strategy. Here a contractor can package 13, 15, 18, and 20 SEER products with benefit groupings that are available, including humidifiers, air purification devices such as HEPA filters and UV lighting, as well as zoning products.

Still, other contractors lean more towards the whole house as a system selling approach, whereby equipment is just one part of the package. In this process, a contractor is evaluating a home's duct system, looking for leakage, infiltration, attic insulation, CO issues, etc.

And then there are contractors like Vince DiFilippo, who believes in selling his company, his quality of work, and his knowledge. The owner of DiFilippo Service Co., Paoli, Pa., believes in selling DiFilippo's Service Co. first.

"Anyone can sell box A or B or C, but no one can sell what my company delivers," said DiFilippo. "It is an intangible. My competition can simulate it, duplicate it, assimilate it, and that is fine with me. When my competition becomes like my company, we all win because now we go to market and compete not on price, but on what we deliver."

Let the debate begin.

Brendon Barker (left) of Air Rite Air Conditioning Co., Ft. Worth, Texas, goes over promotional material with a homeowner. (COURTESY OF PETE DETLEF)

GOOD, BETTER, BEST

In York's estimation, the good, better, best selling strategy is still viable today, but with a little tweaking.

"As we all know, 13 SEER products are now the lesser value and cheapest route to take," said York. "Most customers are less concerned with price than they are with value. So, if we package 15, 18, and 20 SEER products with benefit groupings that are available with the application of these higher-end products, customers, who are concerned with health, cleanliness, comfort, longevity, reduced operating costs, more value at the time of purchase and at the time of resale ... they will opt for the more carefully defined value."

Ray Isaac, president of Isaac Heating and Air Conditioning, Rochester, N.Y., believes the good, better, best strategy still works, too.

"It is just that in terms of efficiency, 13 is the new baseline or goal option," said Isaac. "Our approach as a company has always been to make 12 or 13 the goal, and then build from there. Keep in mind, it has always been the philosophy of our company to differentiate on options, efficiencies, upgrades, warranties, etc."

What Isaac disapproves is varying installation procedures to build the good, better, best progression.

"I strongly believe that this is a big mistake," he said. "Our approach has always been to keep installation practices consistent at the highest quality and then differentiate on items that do not affect or compromise the quality of the installation.

"Every job that we do receives a custom-made, shop-fabricated insulated plenum, a new slab for the condenser, and the same quality touches, regardless of the good, better, best strategy. Furthermore, with regard to the energy issue, up here in the Northeast, SEER increases do not have as great an impact on energy savings as does proper design, installation, and maintenance. Efficiency ratings are still viable and offer the contractor the ability to customize the right system design based on the client's requirements, budget, expected usage, and other factors."



Salesperson Jim Goodman (right), of Aaron York’s Quality Air Conditioning and Heating, Indianapolis, goes over thorough details with a homeowner.
In the end, said Isaac, it is less of what is installed, but more on how it is installed. "With the whole 13 SEER thing, I think that more has been made of this issue than was justified, and this is coming from a Rust Belt contractor, where usage levels and loads are much less," said Isaac.

"In my opinion, the good contractors out there assumed the sale in the transition to 13 SEER, because they were the ones that have been selling upgraded options all along. The contractors that I have witnessed creating all the buzz are the followers, stuck in the comfort zone of selling boxes and not efficiency, comfort, quality, and all the other differentiators that the leaders in the industry promote."

With that in mind, Geno Gruber, general manager of Gallagher's Heating and Air Conditioning, Los Molinos, Calif., believes good, better, best is still the way to sell.

"How can a contractor consider himself or herself a professional if he or she is not giving the customer choices?" he asked. "The customer has needs and it is our job to identify them and offer not only solutions, but choices."

Unfortunately, he said, he did not get many choices when he recently purchased his wife a minivan. For a few bucks more, he found out later, he could have had a factory-installed DVD player for his children to enjoy.

"Was it my job to know all the options available, or was it the job of the professional?" he asked, before answering his own question. "In my opinion, the best way to sell efficiency is to make it available by offering it. If you have done a good job of explaining the benefits, the consumer will always make the best choice."

In Gruber's estimation, contractors should not have to sell comfort. It is his belief that comfort is the only reason contractors are invited into customers' homes. "Whether it be that the homeowner wants a constant, even temperature throughout his or her home, or they want the comfort of knowing that they are not overpaying the utility company, either way, it is comfort that we provide," said Gruber. "We have found that by simply asking questions about their current system, we identify areas that can be improved. Once we have determined that we can, indeed, improve the comfort quality in the home, we ask the customer if he or she would like to hear how.

"When they say ‘Yes,' we share with them all that we have. We make it make sense and then they decide."

Just because 13 SEER is now the baseline, this has not changed the sales approach of Gallagher's Heating and Air Conditioning, he explained.

"We have not changed our sales approach at all," stated Gruber. "We focus on the needs of a customer and do our best to make sense to have Gallagher's Heating and Air Conditioning address them. Thirteen SEER is the minimum and most of our customers don't want the minimum. So, we offer good, better, best packages that address efficiency and comfort."

WHOLE HOUSE AS A SYSTEM

Taylor agreed that contractors still need a good, better, best selection process. However, in his estimation, "It just doesn't need to focus only on the box side.

"Selling the whole house as a system is more complicated than selling boxes - and most contractors will not, at this time, move into it," he said. "It requires a new commitment from them and an investment in their people, larger than they have ever made. It also requires a larger investment in testing equipment, etc. The time for the sales process is longer, but the margins are, or should be, higher to offset the education process you must go through with the customers."

Since a contractor is selling boxes as accessories, Taylor said these contractors tend to get higher SEER units installed because they will now perform to the level that they were designed to.

"In the whole-house process, you are evaluating the duct systems, leakage of ductwork, infiltration, attic insulation, attic ventilation, thermal bypasses, CO issues, house leakage, cross connections to outside, etc.," he explained. "Many times we are finding we start a job for $7,000 to $10,000, without any equipment, and before the job is completed, we have added another $3,000 to $6,000 in equipment because the customer can feel the difference in the changes we have already made."

York echoed what Gruber said in regard to selling comfort.

"You don't sell comfort in the home," he repeated. "You work with customers to determine what their needs and wants are. That is different than equipment needs or wants that have been driven into their heads by box marketers.

"They know what they want, how they want to feel, and how quiet they want their home," he said of customers and homeowners. "Let them decide the level of comfort they want, and then you, after testing, present them with a solution to their issue. Never - and I say never - try to outguess the customer as to what comfort is."

While Taylor said his parents may have been comfortable with evaporative coolers, "I couldn't put one in my home if you gave me the factory."

"Our level of comfort has changed over the years," he said, "and what our parents thought was good enough, today's homeowners will not accept."

York said asking questions is the sales key. "For example, how often do we package outside air options with our comfort systems?" he asked. "Environmental Protection Agency (EPA) studies have shown that the internal environments of our homes are ‘pits of poison' because of all the pollutants that we hold in our homes. Our homes are built so tight that they no longer can breathe. Even the outdoor air, which we declare unhealthy, is cleaner than the air in our homes. And it is getting worse instead of better. ... Our industry must change the air in our homes with excellently designed and applied air exchange systems that are energy efficient."

Without ventilation to remove the excess moisture, York believed mold will, once again, move back to the front burner "as millions of homes cause respiratory problems, cancer, all kinds of sickness, and billions of dollars in lost productivity because we are no longer healthy."

"Pray tell me, who but the HVAC contractor can solve these issues?" he asked. "There are no cheap fixes. We must build our case and present it to the homeowner. We are no longer dealing with comfort as much as we are dealing with health."

In the end, comfort is needed, desired, and attainable, said York, "if we train every segment of the industry to become knowledgeable about customers, applications, needs, and how to make our systems meet these needs."

In York's estimation, a contractor should no longer hire a trained salesperson, as he put it, "who is powerful enough to get an order signed."

"We must provide them with engineering and application training so that they truly know what they are doing," he said. "The ACCA Environment Systems manuals are unparalleled in this knowledge and are constantly being updated to future technology."

Michael Hopper of Air Rite Air Conditioning Co., Ft. Worth, Texas, examines a home’s outdoor unit. In the whole-house selling process, contractors evaluate duct systems and more. (PHOTO COURTESY OF PETE DETLEF)

SELL YOUR COMPANY, NOT BOXES

And, finally, you have the sales philosophy expressed by DiFilippo and a multitude of other contractors - namely, a contractor should sell his or her company, not boxes.

"Don't sell based on the box and lowballing the competition," said DiFilippo. "This is how our industry got into trouble before. We are now suffering with low self-image, a shortage of trained technicians, and a national average net profit that, after 13 years, finally moved up 1 percent to an unbelievable 3 percent, after taxes.

"Now with 13 SEER as a minimum standard, the playing field is level. In other words, you must differentiate yourself from the competition with something other than efficiency and the box. You seriously must ask yourself, ‘Why would Mrs. Jones buy from me instead of my competition?' "

DiFilippo provided an unusual comparison. He said prospects should be treated "as if they were your girlfriend's father back when you were in high school."

"You have gone to her house to pick her up, and you're sitting in the living room with her father silently glaring across from you. You would want to tell the father all the good things about you and how you will take good care of his daughter, how you're honest and have integrity, that you promise to bring her home on time, that you are on the yearbook committee, etc. Basically, you are selling yourself - and, that's the best selling approach."

To be successful, DiFilippo suggested that contractors write down all the things their respective company does and/or offers, association memberships, awards won, training and certifications earned, etc.

"Basically," offered DiFilippo, "you are creating a brag book."

Condense all this information into a couple-page report, along with some industry-related handouts, he suggested. Place this information into a professional report cover and give it to your prospect when you first walk in the door, encouraged DiFilippo.

"Tell your client that this is an information packet about your company, and they can read it at their convenience," he said, adding, "Dress nicely and put on your shoe booties no matter what the weather is like outside. Have a questionnaire ready for the homeowner to fill out. You can ask them about noise, cold or hot rooms, thermostat settings, dust, dryness, etc.



Best, better, good sales strategy still works very well for selling comfort systems, believes Bill McCullough of Lennox’s Worldwide Heating and Cooling product management. (PHOTO BY NELSON MOY)
"Then ask permission to measure the house for a Manual J load calculation. Measure static pressures, CO, delta T, etc., as needed."

To differentiate itself, DiFilippo said his company takes digital pictures of the outdoor unit, indoor unit and ductwork, and the front of the house.

"This is where I am different than other salesmen," he said. "I tell the client that I have taken all the measurements that are needed and I will compile and design a system, print a proposal, and drop it in the mail. When they receive it, they should take a couple of days to review it and/or compare it to other proposals, gather questions, and call me for a follow-up visit or phone call."

From his experience, clients really like the fact that he is not going to sit there for another hour and try to sell them a system. "There is no pressure and plenty of time to make a decision," he said. "Obviously, if a furnace shuts down in the winter or there is a dead A/C unit in the summer, that customer will get a price from us within six hours."

Having a proposal book adds fuel to the selling fire, according to DiFilippo.

"Your proposal should be bigger, brighter, and more professional than your competition's," he said. "I get more compliments on my proposal books than anything else. Hey, if you want to get top dollar for your installations, you have to impress the client through everything they see."

A proposal from DiFilippo includes:

  • The picture of the client's home in the center of the proposal's front cover usually. ("Our company name is at the top with, ‘Presents this heating and air conditioning replacement proposal for the Jones residence, 1234 anywhere place, city and state.' ")

  • A copy of the company's liability and workmen's compensation insurance.

  • A copy of the local township license.

  • Full-color brochures from manufacturers of the equipment to be installed, including any humidifier, air cleaner, CO monitor, and/or other accessories.

  • A copy of the company's 100 percent guarantee or your money back certificate.

  • The actual proposal, printed on company letterhead. Included is a duplicate of the last signature page for the prospective buyer to sign and return, along with a deposit check.

  • At least four before and after pictures of equipment-related installation jobs his company previously accomplished.

    Publication date: 04/17/2006