The global Internet of Things (IoT) market is forecast to grow from $7 billion in 2014 to $45 billion by 2019, according to a recent report by Technavio, making it abundantly clear that homeowners nationwide are investing in devices that help improve security, comfort, and peace of mind in their homes.

HVAC contractors have taken notice and stand ready to fulfill these demands, which often begin with the gateway into their customers’ homes: the smart thermostat.

THINKING AHEAD

Mike Agugliaro, co-owner of Gold Medal Service in East Brunswick, New Jersey, and The NEWS’ most recent Best Contractor to Work For in the East region, said it’s in the best interest of both his business and customers to stay on top of the industry’s technological advances.

“Gold Medal strives to stay at the forefront of technology that offers homeowners greater safety and comfort,” he said. “We believe [home] automation is a big part of that.”

Gold Medal currently offers Wi-Fi thermostats, generators, and electrical devices, though, “Wi-Fi thermostats are, by far, the most popular items we sell,” Agugliaro said. “Homeowners love that they can control their comfort from anywhere. The demand went from 5-10 percent of the systems [we installed] three years ago to 70-80 percent of the systems we install today.”

Derek Cole, general manager of One Hour Heating & Air Conditioning in Laurinburg, North Carolina, said customers are embracing home automation technologies — especially smart thermostats — which have created opportunities for One Hour to work its way into customers’ homes.

“Obviously, with the Internet, things have exploded as far as installing your own thermostat. People know what everything costs, and it does make a difference who’s behind it and who installs it. We’ve gone on a lot of calls where people [purchase a thermostat and] install the unit incorrectly,” he said.

“We install a lot of Sensi thermostats from White-Rodgers, and we make sure everything’s ready to go. There’s an app for the phone, and we help download that app and set it up properly,” Cole added.

Jeremy Anderson, franchise owner, Aire Serv of Las Vegas, said the company has been somewhat cautious when it comes to evaluating and adopting new home automation technologies. “Our industry has had so many fads that as soon as you jump on it, it’s gone or out of style,” he explained. “That being said, we did jump on the thermostat trend, and we’re certified with Nest, Sensi, and RedLink. Our customers typically tell us it’s unnecessary until they play with it, and then they absolutely love it. Our elderly clients tend to love the technology the most. The younger generations are buying their own [thermostats] at Home Depot, Lowe’s, and Best Buy and installing the units themselves, but the older generation prefers that our techs install them.”

ADDING SERVICES

While some contractors are just now taking their first steps when it comes to offering home automation services, progressive contractors are already thinking of their next steps.

“We’re a forward-thinking company in this small town, and we do a lot of social media and other things that keep us ahead of the competition,” Cole said. “We had to have a modem to get onto the Internet four or five years ago, so we were on the frontline of that. We offered the Honeywell RedLink when it first came out. Installing a Wi-Fi thermostat standard is not really the market right now, though I don’t think it’s going to be a big problem for us to make that shift in the customers’ minds. We’re already controlling the thermostat. We don’t offer home automation services that cover the entire residence quite yet, but we’re moving to that in the next couple of years — cable, lights, locks, the whole nine yards. It’s definitely something we’re interested in.”

In keeping up with technology, Cole’s One Hour franchise offers text messaging as a way to schedule appointments and keep in touch with technicians. The move is a response to customer demand, Cole said.

“We’re texting customers that we’re on the way, which seems to be going really well,” he said. “I have this app on my phone for texting so they can text our main phone number. It’s a good way to communicate, and I’m a big believer in speed when it comes to communication. You need to be as fast as you can because we’re living in the age of instant gratification. Customers want solutions now, not 24 hours from now.”

Keeping up with technology, however, isn’t always a priority for many HVACR technicians and staff, Anderson said. “I was trying to get guys who’d been in the industry to talk about it [home automation], and they said, ‘we don’t need it,’ and, ‘we’ve always done it this way.’ I remember thinking the same thing when the iPhone came out — who wants to have their iPod connected to their phone? — but, now, I can’t imagine doing anything without it.”

Peace of mind is one of the biggest drivers fueling the adoption of home automation technologies, Agugliaro said, and HVACR contractors are poised to profit from that peace of mind.

“We noticed that, with all the convenience smartphones offer today, homeowners are more likely to purchase time-saving and convenience items for their homes,” he said. “Plus, it’s peace of mind that most are looking for. This goes across the board. We have more products to offer our clients, which help our core purpose — to help people live in greater safety and comfort.”

While not all home automation services will be lucrative, they open the door, literally, to the customer’s home, which can translate into a lasting — and profitable — relationship.

“We’ve had to drop our prices because a lot of these units are sold in retail stores,” Anderson said. “We wanted to be competitive with the do-it-yourselfers, so we drastically dropped our prices. However, we’ve learned that a lot of these connected thermostats tie contractors to their clients. For example, Honeywell’s RedLink and White-Rodgers’ Sensi actually send your information to the client. So, yeah, you might not make much money, if any, on the thermostat, but that return revenue for having a locked-in client more than makes up for it.”

For contractors who are considering adding smart thermostats and other products to their lineups, Agugliaro said it’s important to stay educated and remain ahead of the technology. “Everything is constantly changing,” he said. “You don’t want to offer clients devices that will be obsolete in a few years.”

Anderson also stressed the importance of staying up to date on the latest industry technologies. Contractors who don’t stay a step ahead, he said, “are putting themselves into a position like a Blockbuster; they need to do what Redbox and Netflix did or it’ll be too little, too late. It’s eat or be eaten.”

Publication date: 3/21/2016

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