Modulating Furnaces Intrigue Customers
Today’s contractors are looking for more and more ways to engage the interest of their residential customers. For a lot of these consumers, it takes more than lowered heating bills, it takes comfort improvements, such as those achieved with fully modulating gas furnaces.
Contractors John Beery, Beery Heating & Cooling, Inc., Oswego, Ill., and Claude Drabek, Drabek & Hill Inc., Oklahoma City, are even finding that comfort is a stronger selling point than efficiency when it comes to their heating customers - even though the modulating furnaces they sell are said to offer the industry’s highest AFUE. This is something of a revelation in a market that is generally tight.
CUSTOMER AWARENESSPart of the trend is driven by the customers themselves. These contractors agreed that there is higher consumer awareness of what is available.
“They are getting more aware,” said Drabek. “A lot of that has to do with the salesperson going out there and advising them. A lot of contractors are giving more options.”
“They are more Internet- and information-savvy,” said Beery. Compared to five years ago, these customers are much more aware of “efficiency and dollars and cents,” he said. “They know ‘what I currently have, and what options do I need to make it more efficient and cost effective.’”
“A lot of customers go to Websites, and they know that more is available” than the standard system, Drabek said. “This seems to be increasing every year. We give three different options. Once the customer knows about these options, they tend to want the better system.”
REPLACEMENT EDUCATIONAbout 98 percent of Beery’s residential customers have gas heating systems. Drabek’s percentage is a little lower, but just a little: 85 percent of the customers have gas systems.
When it comes to replacing older furnaces with newer, modulating models, Beery also offers a range of good-better-best. “I would say 50 percent do end up going with the higher-end system,” Beery said. “We offer 12 months same as cash. It’s almost a necessity now, and usually the replacement is an emergency.” When it costs $600-$700 for the repair, the customer says, “Forget it, put in a new one.”
Drabek’s customers are also making the mental leap to “better” or “best” systems. “The tipping point with the modulating furnace is customers like more even comfort throughout the home,” he said. “And with variable-speed and ECM blowers, they like the blower going 24/7 for IAQ. With the old standard and single-stage furnaces, they couldn’t do it economically.
Right now, around 20 percent of the contractor’s customers are reaching for those higher-end systems, he said. “I think we can do a better job with that. What’s helped everything pretty dramatically are the tax benefits available for 90 percent plus furnaces. When you’ve got more than one party saying ‘Yes, this is the thing to do,’ it’s like a team sport.” Those benefits are expected to increase in the near future.
Beery finds that customer willingness to learn about the features of newer systems is an age thing. “If you get somebody in their 50s or younger, not much of an education is required. For those who are 50 or older, it’s more of a challenge. Some people who are retired might feel that they won’t see the payback.” He points out to them that payback is usually within five years if it’s a combination heating-cooling replacement. “If it’s one or the other, it’s seven years.”
For Drabek’s business, customer education starts with employee training. “There’s a little scariness with new hires; we have to go through the training.” When they are with customers, these employees will talk about what they’re comfortable with.”
Their education also prevents another embarrassing situation: when the customer knows more about the system than the employee does. The training is very important for service techs as well as salespeople, because “customers ask questions of the front-line guys, and they will trust and believe those guys in a heartbeat over the guy they perceive is in sales.”
Is the attraction comfort or economy of operation?
“It’s comfort for some people,” said Beery. “There are so many bad systems out there, almost anything is an improvement.” Other customers take dollar and cents over comfort. Tax rebates and operating efficiency get their attention.
WHAT IS MODULATION?According to the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) “modulation” can define any furnace with more than two stages of operation.
“In a modulating gas furnace, the firing rate of the gas valve varies incrementally according to a home’s heating load requirements at any given time,” said Andy Armstrong, director of marketing for the Unitary Products Division of Johnson Controls Inc. “The furnace inducer motor and the air-distribution blower motor also modulate, resulting in extended run times for the furnace with lower output rates.”
In most cases, the gas firing rate in a modulating gas furnace adjusts in a range from 35 or 40 percent through 100 percent in specific increments, he explained. These increments range from 0.65 to 20 percent, depending on the furnace manufacturer, and make the furnace equivalent to one with a 100-stage, 61-stage, 51-stage, 13-stage, or three-stage gas valve.
Algorithms built into the integrated furnace or thermostat control manage the manipulation of the gas valve along with other controlled components, including the inducer motor and the air-circulating blower motor, Armstrong said. “A single-stage, multistage, or fully modulating wall thermostat directs or initiates the operation of the furnace.”
With a modulating gas furnace, he said, most heating requirements can be satisfied by the lowest operating ranges of the gas valve. “As a result, full firing rates are rarely seen and energy efficiency is ensured.” Home- owners also experience fewer temperature swings for increased comfort. Longer run times at lower firing rates also account for quieter operation. The icing on the cake for these homeowners is the electricity savings because the inducer motor and blower motor run at a reduced capacity most of time the furnace is in operation.
“Modulating technology is primarily found in 90-plus AFUE gas furnace models, although an 80 percent AFUE model is available,” said Armstrong. “Some manufacturers offer modulating gas furnaces with three stages, while others work up to 10 stages, our modulating furnaces range through 100 stages.”
All Johnson Controls high-efficiency condensing modulating gas furnaces with permanent split capacitor (PSC) and variable-speed (ECM) motors have a 97 plus percent AFUE rating.
“I see it growing dramatically,” said Drabek. “We are trying to position ourselves so it’s a bigger percentage of our sales. The 13 SEER units and 80 percent furnaces are commodities.” The modulating line “gives us a way to make a profit margin, so our people can make a comfortable salary. Our sales are increasing with that. This gives us a way to sell that higher-end product.”
Perhaps his best testimonial is the fact that “I’ve got three in my home. This is my second winter with them. I was building a new home and it seemed like the perfect opportunity. I’d rather me be a guinea pig than my customer.”
Of course, it’s better to be safe than sorry - but higher AFUE ratings and more modulation mean distributors and dealers have a stronger selling position, which is a very comfortable position to be in.
Publication Date: 03/23/2009