WHEN ‘SMART’ IS ‘DUMB’

Smart thermostat sales have grown over the past few years for many contractors, including Douglas Hunt, co-owner of Palmers Heating & Air Conditioning in Thomasville, North Carolina.

“Our sales split for smart thermostats so far this year is 22 percent smart or Wi-Fi thermostats and 78 percent standard thermostats,” Hunt said. “The younger homebuyers are starting to be a presence in the marketplace, and this number is going up.”

But, even though smart thermostat sales are increasing, contractors pointed out several situations where simpler thermostats are the best candidates for the job.

“Senior citizens are one example,” said Peter Kusterer, IAQ specialist at Air Comfort For Homes in Raleigh, North Carolina. “I got a call from a manufacturer to go out to see a woman in her 80s who just had a new system installed and couldn’t get any heat. I drove out there, and nobody had explained to her how the thermostat worked. She looked at me and said, ‘I just want heat.’”

The problem, Kusterer explained, was that the woman didn’t understand the technology and wasn’t offered help or a better solution. “I spent time with her and said, ‘You have to learn how to use a permanent hold.’ So, remember, there are people who might be challenged by the technology.”

Dennis Biggerstaff, co-owner of Biggerstaff Plumbing & Heating Inc. in Lincoln, Nebraska, said his staff often does not recommend smart thermostats for elderly customers, though for a different reason. “We do not recommend a smart thermostat for elderly customers if they stay in their home year-round, but if they go away for the winter, we talk about the Wi-Fi models,” he said, referring to the ability to connect to their homes when they are away for long periods of time. “We explain what a smart thermostat can do and let customers decide. We do
not push.”

Those who spend a lot of time at home are also often poor candidates for smart thermostats, said Rich Morgan, president of Magic Touch Mechanical Inc. in Mesa, Arizona. “We typically will not recommend a smart thermostat for people who work from home or retirees who never raise or lower the temperature throughout the day,” he said. “We also typically do not recommend them to people who are scared of technology; some people just want simple up-and-down controls with no bells or whistles.”

While geofencing technology — where the thermostat turns the air conditioning or heating on when it senses a user is within a certain radius of the home — is useful in some situations, it’s not always an effective feature, Biggerstaff added. “I’m aware of [products that use] the smartphone to turn the thermostat on or off depending on how close the phone is to the thermostat, but what about other people who are in the home?”

For the HVAC contractor, keeping up with the proprietary technologies of the different smart thermostats can often be time-consuming.

“A disadvantage would be having to constantly stay updated on these changes and training, our staff on the various Wi-Fi thermostats on the market,” said Dave Knight, co-owner and director of sales and marketing for Thornton & Grooms in Farmington Hills, Michigan. “Currently, all of our systems in the office are controlled by different Wi-Fi thermostats, so our staff sees them and uses them on a regular basis, and, in the very near future, we will have a thermostat wall in our office so we can train more efficiently. Wi-Fi is one more thing that can fail, so customers can get frustrated at times because of the added inconvenience. As the saying goes, ‘technology is great — when it works.’”

The main thing to remember, Kusterer explained, is that many people simply don’t know how to use the technology properly, and unless and until they are trained, a smart thermostat can often do more harm than good.

“The average user doesn’t know how to use these things, and we can’t prevent people from getting into the installer menu and getting their systems out of whack,” he said. “The hardest lesson was in the vacation community. If you have vacation rental property and you put a smart or even just a programmable thermostat in the unit, people don’t know how to use them — the guests don’t know how to use them. They work against you. Not all situations are suited to smart thermostats, and, in some cases, the lowest-tech product may be the best.”

HELPING CUSTOMERS DECIDE

To determine what kind of thermostat is the best fit for the customer, the best thing to do is to listen, ask questions, and offer multiple options, Knight said. “We provide customers the benefits of each thermostat and show them the products we carry; then, they decide which thermostat works best for their situation.”

“Determining which thermostat is best for each customer is a combination of our understanding of our customer and the customer’s requests,” Hunt said. “We must use common sense, too; most of the customer base and new customers trust our input, so we must access what’s best for their knowledge base, as well as usage — not just our bottom line. We see that we have a responsibility to assist our customers, as they really don’t know what they need in most circumstances.”

Morgan also stressed the importance of listening and taking all factors into account. “We like to interview customers to find out things like their lifestyles, work and home schedules, other family members’ schedules, utility bill histories, HVAC equipment types, whether there are IAQ or humidity control devices in the home, etc.,” he said. “From there, we may present a good-better-best format of options.”

While upselling is good for the contractor’s bottom line, it’s not always best for the customer, and it’s up to the contractor to help customers make the best decision.

“We do not offer a smart thermostat to customers lacking the knowledge base to use the technology to their advantage,” Hunt said. “Simply stated, some folks just don’t understand the thermostats and what they can do. And, they have no intention of learning. It’s a judgement call; we won’t not sell to someone, but we make them aware that continuous callbacks and reprogramming due to their not knowing or understanding the units will incur a necessary fee. Some people aren’t right for the technology, and padding our bottom line isn’t a compelling sales point.”

A GROWING MARKET

While the contractors interviewed for this article reported smart thermostat sales have yet to crack the top half of their total thermostat sales, they all noted the ratio is certainly changing as people become more aware.

“About 20 percent of the thermostats we install are Wi-Fi-capable, and it’s a growing percentage as consumers become more aware,” Knight said. “Nest has been effectively advertised, and the big-box stores display the Nest and Honeywell Lyric thermostats prominently. As a result, more and more consumers are willing to install these thermostats.”

Morgan, who said smart thermostats currently make up roughly 40 percent of his company’s total thermostat sales, also said he believes that number will continue to grow. “We expect the ratio of smart versus conventional thermostats to keep increasing, and we also think thermostat sales, in general, will increase because of the capabilities of smart thermostats.”

In the end, the average customer’s growing desire to save energy and money while improving IAQ and comfort will only continue to drive smart thermostat sales, and contractors who capitalize on that by ensuring their customers are happy with the technology will benefit the most.

“There is a tremendous battle between manufacturers over-gaining market share and developing technology to meet customers’ connectivity demands,” Knight said. “Thermostats will continue to evolve and become the central control for the entire home — not just the furnace. We strive to follow the technology advancements and want to be able to offer our customers choices.”

Publication date: 10/19/2015

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