Adding hearth products, repairs, and upgrades to an HVAC company located in a hot climate may seem strange to some, but to Rich Morgan, president, Magic Touch Mechanical Inc., Mesa, Arizona, it makes perfect sense.
“While it seems like an unusual product to offer in the desert, many homes in our market have one or more fireplaces, so we felt there was a good opportunity to offer more services to our existing clients and reach new customers as well.”
Many contractors are following Morgan’s approach and adding new products and services that do not fall under the traditional HVAC contracting realm. These products can include everything from generators and tankless water heaters to security systems and pest control, and contractors are reporting a positive response to these non-HVAC offerings.
HEARTH TO HEARTH
Choosing to carry a new product line is a decision that takes extensive research and preparation if it’s to be successful. For Morgan, making the decision to add hearth products involved years of planning due to the sheer number of applications, brands, components, fuel sources, and venting options available. In addition, practically every application is different, so there is no boilerplate upgrade for either existing fireplaces or new installations, he noted. “It was definitely not an overnight decision, execution, or success, nor has it come without some trial and error. We spent a number of years putting together the pieces before launching hearth products three years ago.”
The reason Morgan chose to offer hearth products was that he felt they would fit nicely with the company’s current offerings and abilities. He selected specific product lines based on the relationships he had with suppliers, as well as product availability and client feedback. Right now, his most popular offering is the fireplace modernization, which involves a complete remodel of an existing fireplace that can include remote control power capability and flame adjustment, new log sets, fire glass, modern burner pans, resurfacing, and more.
Another reason hearth products made sense is that there is not much competition for them in the area. “Phoenix is largely a heat pump market, and many HVAC technicians do not regularly work with combustion appliances as in other parts of the country,” said Morgan. “Coming from New York, I cut my teeth on gas- and oil-fired equipment, so I provide a lot of the technical training to our technicians in-house.”
As can be expected, adding a new product line required a large amount of additional (and ongoing) training for technicians, installers, salespeople, and administrative staff alike. “We spend two hours a day, five days a week, training in classrooms, and hearth product technical training is regularly included in our curriculum. Most would probably consider this to be an exorbitant amount of time, but because we offer a much wider array of products and services than a lot of our competitors, that training is necessary.”
Morgan markets hearth products alongside the company’s other offerings, through the same media, including traditional and electronic advertising, home and garden shows, and direct mail. “Our marketing plan is weighted toward keeping our name in front of our existing clients, but it’s also designed to continually add on new customers.”
Adding hearth products to the company’s lineup has been a big benefit, said Morgan, and he would definitely consider adding other products in the future. “I always chuckle when I hear someone say HVAC doesn’t have to be a seasonal business. I don’t care how great your marketing is or how big your client base is, the demand for HVAC products and service is weather-driven. Hearth products, like the other niche products we offer, help to fill the gaps in our work schedule and create additional revenue streams. The entrepreneur in me is always thinking about the next way to grow and improve the business, so we’re already working on other products and services to add to our portfolio of offerings.”
In addition to hearth products, including fireplaces, gas log sets, inserts, and custom fireplace doors, Baumann & DeGroot Heating & Cooling, Holland, Michigan, also offers Bradford White tankless water heaters. “We started offering tankless water heaters as a way to complement the whole-home comfort system we were already selling,” said Chad Baumann, the company’s lead sales representative. “We offered them as an alternative to the traditional tank water heaters, because homeowners like the idea of conserving energy while not in use as well as an endless supply of hot water.”
The company does not offer any other plumbing services, such as drain and water supply lines or fixtures, and it considers itself to be exclusively an HVAC company, said Baumann.
“We only get involved with the actual water heating equipment. They’re a great add-on for our jobs, because we are already in the home working on the mechanicals. Addressing the water heater while we are there lessens the cost to the homeowner while adding the convenience of not having to schedule additional installation dates.”
Tankless water heaters have been slow to catch on due to their prohibitive up-front installation costs, said Baumann; however, utility companies and local municipalities have been introducing substantial rebates, grants, and financing to encourage homeowners to purchase more energy-efficient equipment. “These additional incentives have started making tankless water heaters more financially feasible for families in our area, and, because of this, we’re starting to see more high-efficiency water heaters being implemented.”
Three years ago, Casteel Heating, Cooling, Plumbing, and Electrical, Marietta, Georgia, opened its full-service plumbing division, which offers an array of solutions and high-efficiency options, such as Rinnai tankless water heaters. “We felt it was important to provide customers a solution to all their residential HVAC, plumbing, and electrical needs from the same company they’ve trusted for many years,” said John White, the company’s plumbing general manager. “We wanted to offer a variety of options, including tankless water heaters as well as solar and hybrid water heaters. Our goal is to be flexible and knowledgeable and to better service our customers’ whole-home mechanical needs.”
The company rolled out its plumbing division slowly in order to make sure it could still provide “amazing service” to customers, many of whom have been with the company’s HVAC division for almost 30 years. “We’ve grown substantially over the years, adding manpower and adjusting processes to be able to provide the best solutions to our customers,” said White. “We’re continually looking for the best plumbers to add to our team, since our call volume continues to grow.”
While water heaters are offered at just about every big-box store, White notes that Casteel provides the solutions many homeowners might not be able to solve on their own and customizes each diagnosis with the best-tailored solution for the home and budget. “We constantly work with customers to show the value of our findings and to offer the best solution possible. Having an emergency water leak or water heater rupture is not something everyone is prepared for. We help take the stress away from the homeowner by handling their needs quickly and efficiently.”
H.J. Frank, owner, Personalized Air Conditioning Inc., Boca Raton, Florida, also offers electrical service to customers — primarily wiring new homes, remodels, and additions for residential and light commercial projects — in addition to servicing, repairing, and installing HVAC equipment. He is also a reputable dealer of standby generators. “We get a fair number of hurricanes in Florida and Texas, and, with an emergency standby generator, homeowners and business owners can stay safe, comfortable, and secure.”
Severe weather, such as hurricanes and severe thunderstorms, usually drives homeowner interest in generators, and the lack of severe storms over the last seven years has put a dent in Frank’s generator sales. “Even though we have seen a decrease in demand, generator sales still make up about 60 percent of my total sales.”
While wild weather can help generate leads, Frank also relies on a referral service from a local utility to drive generator sales. “Working with CenterPoint Energy in Texas is a perfect fit. We also work with natural gas companies in Florida.”
Frank also offers service agreements for the generators he installs, so homeowners can make sure their equipment will operate properly during an emergency. The twice-a-year service consists of inspecting, testing, and adjusting the units, as well as checking (and/or changing) the oil and filter. Technicians also check all fluid levels and components on each generator to ensure they’re functioning properly. This regular service is what Frank believes sets him apart from big-box stores that also sell generators. “Smart customers care about service more than saving a couple hundred dollars. Home Depot won’t be there before or after the storm, but I will.”
As can be seen here, offering a variety of products and services can be a smart way for HVAC contractors to widen their appeal amongst consumers. The key is to take the time to thoroughly research the new products and then create a marketing plan to ensure a successful rollout to customers.
Publication date: 8/17/2015