Early this year, Emerson Climate Technologies began a campaign titled "Get SEERiousâ„¢ About 13 SEER." At the end of the first quarter, they shared survey results that indicated how the HVAC industry is positioned for this transition. Now, with Emerson's release of the second-quarter study, a few noticeable trends are surfacing. The bottom line - there is a long way to go before this industry is ready for the transition in residential efficiency standards.
Preparing For ChangesWhen asked "What steps have you taken to get ready for this change?" about 55 percent of contractors in the first survey said they had at least talked with suppliers about the subject; that number jumped to 65 percent in the second survey. Twenty-nine percent of respondents said they had attended product meetings by the end of the first quarter, compared to 55 percent that had done so by the end of the second quarter of the year. That sounds pretty good. People are talking with each other.
Herein lies the problem: The second-quarter survey revealed that 75 percent of distributor and contractor respondents said their respective manufacturers had not advised them of final firm order dates for 10-SEER units. The first-quarter results showed that 86 percent of respondents had not been informed of inventory phaseout dates. So, in fact, manufacturers are starting to communicate their strategy. However, it's not enough.
Approximately one-third of respondents said that one of their action steps has been to create a marketing plan for 13 SEER. That number is relatively unchanged from the first-quarter survey results. Not having a marketing plan for this transition, at this stage, could be bad news for some companies. On the other hand, those contractors that have already begun to address this subject are probably quite happy to know that many of their competitors are behind the eight ball.
Sure, many believe that it will be easy enough to get through this summer, and prepare for changes next year - after all, the changeover doesn't take place until Jan. 23, 2006. True enough, perhaps. However, the fact that more than 90 percent of the unitary air conditioners and heat pumps sold today are below 13 SEER might create a bit of a hurdle for people who will later have to adapt to selling more expensive products.
Believe it or not, some contractors will find themselves challenged to convince customers that there aren't any more 10-SEER products being made, and that they have to pay more for what is available. (The products will run out eventually, no matter how many units some people horde in inventory.)
Another point to consider: Many knowledgeable people in this industry project that maintaining profit margins under the new scenario could prove difficult. This is one of those times when being an early-adopter could be beneficial in the long term.
Learn how to sell higher efficiency products this summer. Learn now how to maintain your edge in the market, and how to maintain your profit margins. Develop your long-term plan for dealing with the 13 SEER transition now, rather than later. Of course, until the manufacturers and distributors begin sharing their complete inventory phaseout plans with their customers, it is difficult for a contractor to develop a strategic plan.
I'm looking forward to seeing the next Emerson surveys due to come out in August and October. Watch for our July 11 issue, where you will learn even more about Getting SEERiousâ„¢ About 13 SEER.
Mike Murphy is editor-in-chief. He can be reached at 248-244-6446, 248-244-2905 (fax), or firstname.lastname@example.org.
Publication date: 07/04/2005