When the economy is down, people tighten the grip on their wallets. Contractors need to use more creativity, strategy, and marketing savvy to make up the differences in their incomes. It’s a very appropriate time to start mining those IAQ prospects that have generally been neglected. They are your existing customers.
“Study after study proves homeowners will purchase indoor air quality products over 30 percent of the time if the product is quoted,” said Mike Rimrodt, marketing director for Aprilaire. “Contractors that make IAQ a part of their business process and strategy will have a higher average sale price per install. This is real money that rides along, with no additional investment in time and transit.”
“One of the easiest things contractors can do is to go to their database of customers, and mine data for those households where they might have sold IAQ products,” said Jeremy Peterson, director of IAQ Products, Honeywell. “They can upgrade and sell IAQ whenever they do clean and checks. They can increase the yield of their service agreement customers by looking for and offering IAQ solutions.”
There is a need for HVAC contractors to take control of this market. “This is an area very dear to my heart,” said Bob Scaringe, Ph.D., P.E., president and founder of Mainstream Engineering. “The jokers out there doing IAQ don’t know about air conditioning. They know about vacuuming. They just stir up dust. It’s fear for $49.95.”
For those contractors who were involved in the new construction market, it’s a good time to present upgrade and IAQ information to the people who bought the homes. “Obviously with a lot of new construction, there are a lot of contractors who didn’t have an opportunity to talk to the consumer, to upsell to newer, better products,” Scaringe said.
REAL ESTATEEven the existing-home sales hold potential IAQ work, despite the recent gloomy report. These home sales declined in January, “with some buyers waiting to see how details of the economic stimulus package would affect them,” according to the National Association of Realtors (NAR). “At the same time, inventories fell to a two-year low.”
“Existing home sales - including single-family, townhomes, condominiums, and co-ops - fell 5.3 percent to a seasonally adjusted annual rate of 4.49 million units in January from a level of 4.74 million units in December, and are 8.6 percent lower than the 4.91 million-unit pace in January 2008,” reported the association.
Once homebuyers can benefit from the stimulus package, “The housing market will soon get a lift from very favorable buying conditions - not only from improved affordability, but also from the stimulus of an $8,000 first-time homebuyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year-low mortgage rates,” said Lawrence Yun, NAR chief economist. The association estimates that the stimulus and lower interest rates will create about 900,000 additional home sales in 2009.
Until prices stabilize, sellers will need to work harder to justify their asking prices, or at least prevent their homes’ values from falling still lower. This is where IAQ improvements come into the equation.
Part of the IAQ depreciation stems from the nature of the home inspection market, said Scaringe. “The role of the home inspection guy is to generate enough problems to justify his fee: ‘I got you more than $400 out of the closing.’ Their bias is to try to find problems. Mold is the easiest problem to find.”
ONE CONTRACTOR'S WORKThe real estate market is already aware of the need to limit property depreciation as much as possible. HVAC contractor Bob Wolfley, owner of Bob Wolfley Air Conditioning & Maintenance, Rockledge, Fla., decided to search out reputable IAQ certification after he lost a $900 job. When a real estate company requested mold inspection and remediation to help complete a condominium sale, Wolfley learned that only an IAQ-certified HVAC service contractor would be acceptable.
A home inspector had spotted mold on the A-coil and blower assembly of the condo’s 2-ton, split-system central a/c. Even though Wolfley is qualified to perform the mold removal and system repair, the condo buyer insisted on an IAQ-certified contractor. To say that the market is sensitive to mold would be an understatement.
Wolfley searched for IAQ certification programs, eventually finding www.epatest.com. He downloaded a free IAQ certification course, Indoor Air Quality and Mold Remediation Service Techniques; a 120-page desktop training manual by Mainstream Engineering; and studied its four sections. He took the optional certification test online.
Now Wolfley not only takes care of mold requests for several realtors, he also offers a Preinspection IAQ Service Package, a proactive approach he created where realtors get mold inspection and remediation before the property is listed. By pre-emptively removing IAQ problems, it prevents the mold labeling by inspectors, which later tarnishes a property’s reputation throughout the listing period and many times either lowers its selling price or, in extreme cases, cancels the deal, according to Wolfley.
The preinspection package includes:
• Cleaning all the coils with a foaming cleanser and applying a mold prevention application;
• Cleaning the blower and heating elements (if any);
• Resealing the plenum;
• Cleaning the registers;
• Sealing the boots and cans of floor, ceiling, and wall registers, and applying a mold preventative to uninsulated areas;
• Performing a general tune-up by checking pressures and amp draws, plus washing outdoor coils, etc.;
• Cleaning the condensate line and putting time-release disinfectant tablets in the condensate pan.
Wolfley leaves an invoice on the property featuring his IAQ certification, itemizing all the services he has performed, and the Manufacturer’s Safety Data Sheet (MSDS) forms and EPA certifications for all the chemicals he’s used in the process.
“When an inspector sees my itemized Preinspection IAQ Service Package invoice, they typically don’t even bother looking for mold and other problems,” said Wolfley. “That’s one less inspection item the realtor has to worry about failing.”
With the referrals to new realtor customers from his existing clients, Wolfley sees this new niche becoming a major part of his HVAC business in the coming years.
Regular residential customers are buying into his niche, too. During annual tune-ups, Wolfley offers optional mold-removal services to customers that can increase a routine service fee.
Additionally, Wolfley said he hopes to expand to more IAQ products, such as electronic filters by Honeywell, reheat boards by Mainstream Engineering, higher-MERV pleated filters, and combination temperature-humidistats by Honeywell carried by his local HVAC wholesaler, Baker Brothers Distributing, Merritt Island, Fla.
“After studying IAQ and becoming certified, I recommend it for all service techs,” said Wolfley. “Even if they work for companies that don’t offer IAQ services, it demonstrates they’re continually trying to improve themselves and their upgraded qualifications make them more valuable to HVAC contracting employers. In a troubled economy, the more qualifications, the better.”
Working with realtors is “a huge opportunity for them, frankly,” said Scaringe. “Housing prices are affected by the presence of mold.” After contractors do the work for the real estate agent, “Wolfley puts his sticker on the unit and gets a client when that house sells.
“Bob Wolfley is a smart guy,” he added. “The new clients are rolling in.”
VARIED SOLUTIONSIAQ solutions aren’t limited to filtration and air cleaners. High humidity levels create problems that can be addressed directly by the a/c system. Roxanne Scott, Heat Controller’s product manager, pointed out that the key to preventing mold and dust mites is moisture control.
“By managing the amount of moisture in the home,” she explained, “you begin the process of controlling these indoor pollutants. In addition to avoiding potential health problems, you can prevent damage to the home and its furnishings.”
One of the reasons for the increased concern over IAQ, Scott said, is that homes today are tighter than ever before. In these times of rising fuel costs, homeowners are trying to conserve energy by adding insulation, and installing storm doors and low E windows, weather stripping, and vapor barriers. Without proper ventilation, more contaminants are being trapped inside the home.
Solutions here include ventilation strategies, improved housekeeping, and whole-house dehumidification. Although air conditioners provide dehumidification as part of the cooling process, this may not be enough during extreme heat and humidity, Scott pointed out. “On the other hand, an air conditioner that is oversized or that is extremely energy efficient may lower the indoor temperature, but may not run long enough to adequately remove moisture, especially in areas with little air movement.”
A whole-house dehumidifier may actually save energy, stated Heat Controller, because “people are generally comfortable at a higher temperature if the humidity is around 50 percent, so they may require less cooling.”
MARKET POTENTIALIn an economy like this, “the add-on sale becomes that much more critical,” said Peterson. “The contractor’s ability to add those products onto a repair job will add value to that repair job. IAQ products certainly add value to any home,” he said, especially for those buyers who are susceptible to health problems caused by high particulate levels.
Honeywell recently conducted a “Homeowner Survey on Comfort and Indoor Air Quality.” The company worked with Zoomerang to conduct an online survey of 2,529 homeowners. They did not know that the survey was being conducted for Honeywell.
The potential for homeowner education is great. According to the survey, 57 percent of the participants said they weren’t aware of any type of whole-house air-cleaning technology - or that a professional solution exists.
“Even though whole-house air cleaning solutions have been around a long time, awareness has been slow to spread,” said a report on the survey. “Always carry whole-house air cleaner sales literature with you and inform your customers about the many benefits of whole-house air cleaning.”
The research also highlighted the fact that homeowners don’t replace filters as often as they should. The opportunity is there to educate homeowners on the importance of filter replacement, especially if the problem for which the technician was called to service was in fact caused by the homeowner not replacing the filter.
The research also indicated that while the majority of homeowners are willing to invest more for a better-efficiency filter, they often prefer not to incur ongoing filter replacement costs. “Most of your customers will choose a renewable, high-efficiency option,” said the report. “This allows you to lock in increased sales today versus working to capture replacement filter sales tomorrow.”
Offering more than one solution in a good, better, best scenario gives customers the choices they desire, the report said.
The technician in the house should get used to asking customers about allergies, asthma, and other respiratory issues. Asking about pets is an even greater lead-in to a discussion about IAQ solutions.
Taking a quick glance around a home as the contractor enters can be useful. “When you see an attached garage, you see a need for ventilation, filtration, and CO detection,” said Honeywell. Candles and air fresheners are often used to mask odors, and candles themselves become a leading indoor air pollutant as they burn.
“Look for signs of opportunity and relate solutions that you can provide to your customers,” said the manufacturer. “Keep in touch with your service contract customers with ongoing follow-up marketing to drive more sales and referrals.”
There’s no better time to start than now.
For more information, visit www.aprilaire.com, www.forwardthinking.honeywell.com, www.heatcontroller.com, and www.mainstreamengineering.com.