Radiant Contractors Adopt Forced-Air Business Model

June 5, 2001
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SALT LAKE CITY, UT — While radiant heat and forced-air furnace contractors share totally different products under the indoor comfort umbrella, one person has suggested that using the same marketing philosophy makes sense and leads to a successful business model.

Joel Williams of Epting Distributors Inc. told Radiant Panel Association (RPA) conference attendees that they should look at the marketing models put forth by hvacr businesses that specialize in installing and servicing gas forced-air systems.

Williams’ presentation, “Adopting the Forced-Air Business Model of Marketing Consumer Conven-ience and Value,” summarized the idea this way: “Since hvac contractors are selling 95% of the heating, learn how to use their best methods to make your business as a radiant contractor successful.”

Williams used a graphic showing the peaks and valleys of the mechanical contracting business and noted that less than 50% of all contractors avail themselves of outside help when it comes to “filling in the valleys.”

Aligning Vs. Hiring

He added that by taking on outside help, or in other words, forming an alliance with a forced air contractor, a radiant contractor instantly has access to a whole new set of customers — and vice versa.

As an alternative idea, Williams suggested hiring an experienced forced air service technician to complement the existing service staff. However, he said there are often pitfalls to this method, too.

“If you hire a forced-air guy, make sure you don’t do it to help him build his own business,” Williams added. “Have him sign a non-compete agreement and an agreement not to steal your employees if he starts his own business.”

There is a common thread among radiant and forced-air contractors, Williams said. Many owners turned wrenches at the beginning of their careers and have had a hard time adjusting to their role. “We generally don’t like the business aspect of the business,” he added. “We would rather be involved in the technical side.”

By focusing on the customer side of the business, owners can find a lot of room for success, said Williams.

Customer Retention

“Customer retention is a popular item on the Web,” Williams said. “There are over 136,000 sites devoted to that subject. In comparison, there are about 3,000 sites devoted to death and dying.”

He said that appealing to the emotions of customers is one way to keep them coming back. He talked about important issues such as indoor air quality (IAQ) and energy efficiency.

For example, with tighter homes, the problem of IAQ has become a big concern for homeowners. That is a marketing opportunity, said Williams. The recent outbreak of “black mold” bacteria in the South and Southwest attests to the importance of carefully monitored IAQ.

He added that helping customers save money on their energy bills is another selling factor.

“Give your customer an energy saving guarantee,” he said. “You can make more sales and the promotion usually works well, even if you have to write an occasional check back to a customer. It will create goodwill and word-of-mouth advertising.”

Expansion vs. Alignment

In a separate seminar, Joel Williams advised RPA conference attendees that they should consider expanding their business rather than losing a potential customer.

“Don’t send customers down the street,” he said. “You should be able to offer all services that will satisfy your customers’ needs. Expand your business in order to offer complete service.”

Williams suggested that forming a “loose alliance” with another business requires no legal agreement and is easy to dissolve. But he said to make sure owners understand the implications of such an agreement. A partner can walk away with a customer list, for example, or owners can incur “contingent liability” for work performed by another if an attorney can establish a working business relationship.

For the most part, Williams said that in a partnership situation, it is best to have the “upper hand.”

“There will be personality clashes in partnerships,” he added. “Make sure you have controlling interest. A 50-50 partnership is not desirable because there is no way to break an impasse.”

Publication date: 06/11/2001

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