IAQ equipment seems to be in high demand as consumers become more aware of their indoor environments and the role fresh, clean air plays in their lives.
A study conducted by BCC Research backs this claim, reporting that the IAQ market in the U.S. totaled $7.8 billion in 2015 and is estimated to grow to $10.8 billion by 2021, increasing at a compound annual growth rate (CAGR) of 5.3 percent from 2016 to 2021.
Though consumers are becoming more familiar with IAQ, it’s important for HVAC contractors to facilitate conversations that focus on indoor environmental problems and solutions and then let them make their own decisions.
“First off, I would never want to try to convince someone to buy something,” said Bryan Orr, co-founder and vice president of service, Kalos Services Inc., Clermont, Florida. “And that’s an important language distinction that I make with my technicians and sales staff. We always want to have conversations with customers about their fears and desires, because all buying decisions are made based on fears and desires. IAQ is a real central part of that. If somebody has some significant fears related to health or allergies, or let’s say they even have some phobias in some cases, then you want to have a conversation on it, not push into that fear or accelerate that fear.”
Orr said his business model focuses on being able to do as much on-site for the customer as possible.
“That doesn’t mean we want to sell them as much as we possibly can; it means we want to serve them as much as we possibly can because that’s how you build long-term relationships. This approach also helps improve our billable per hour, which helps with our overhead per hour. We’re focused on capitalizing on our time when we’re already at customers’ homes in order to do more things that benefit them. So, that’s how we look at IAQ. I don’t look at it as an upsell. I look at it as a way to improve upon how much billable per hour we make on a site.”
Travis Smith, president, Sky Heating & Air Conditioning, Portland, Oregon, said his technicians simply ask customers questions and really listen to their answers.
“We often ask who in the house has allergies,” Smith explained. “In 90 percent of homes, somebody has allergies. We have three offices and two of them are in the high desert, so we sell a lot of humidifiers by asking people if they get cracked or dry skin. It’s really just about listening to customers because it’s rare that someone has no need for IAQ.”
Scott Merritt, owner of Fire & Ice Heating & Air Conditioning Inc. in Columbus, Ohio, agreed that the best way to sell IAQ products is to ask questions.
“If my tech is inside the house doing a tuneup, he is trained to ask, ‘Do you have any issues regarding dry skin, static electricity, allergies, dust, expensive woodwork, or bloody noses?’ Then, they’re trained to listen. People don’t want to be sold; they want an experienced tech to ask the right questions and inform them about the products that may solve their particular problems. For example, you could ask, ‘You mentioned you have very dry skin in the winter. Would you be interested in hearing more about a whole-house humidifier that could solve that problem for you?’ Of course, they will say yes. Once you inform them on what is available, then you educate them on the benefits. ‘Mrs. Smith, a whole-house humidifier can not only help with your dry skin but it can also help with static electricity, dust, woodwork, bloody noses, and more. We can set it each spring and each fall when we do your tuneups. There is nothing you need to do. Here’s how it works.’ After they understand all of it, or at least the basic concept, depending on their engagement, then you offer them the product [at a discounted rate for maintenance agreement customers, of course] and let them know you can install that item right then and there — or another time that’s convenient for them.”
SHOW AND TELL
Adding on or upselling IAQ products is easier than cold selling, noted Greg McAfee, owner of McAfee Heating & Air in Kettering, Ohio.
“You’ve already made the sale,” he said. “They’ve already said, ‘I trust you, I like you, and I want to buy from you.’ The hard work is over. So, it’s a much easier sale. If you offer too much at once, that sometimes turns people off. You’re trying to sell them the world, and they don’t want the world. You have to sell them what they need, and the best way to do that is ask questions, like, ‘You probably don’t have much dust in the house,’ when you know everybody does. Then, you ask, ‘Have you ever considered having your ducts cleaned with a new furnace? Because if you don’t have them cleaned, it’s kind of like putting on new shoes while wearing dirty socks.’ You give them a little analogy and explain that the new furnaces move a lot more air, so all that dust that’s settled in the ducts for years is probably going to be moved. We’ve been doing duct cleaning since 1993, so it’s an easy sell for us because we know exactly how it works and what we’re doing. We’ve built a good reputation just based on our duct-cleaning services. And, we offer a discount if they do it with an installation, which is a great upsell. For the most part, people say yes.”
McAfee said one of the best sales techniques is to have samples on hand to show customers.
“We have a few great tools in our arsenal to help us through the process, including sample UV lights,” McAfee said. “We bring them along and show customers what they look like and how they’re installed. We also offer online videos customers can watch while we’re looking at the system and encourage them to check out referrals from customers who have these products in their homes.
“I tell this same story to my sales classes,” he continued. “I built a detached garage that matches my house — it’s really nice. I had three landscaping companies come out to give estimates. We had a guy come out with full-blown plans. Where our patio and garage met, he had this big fountain that comes right off the patio. I was wondering why he would do that because I didn’t want a fountain. And he said, ‘You don’t have to buy this fountain, I just wanted to show you what it would look like. The water comes off the rocks, and when you’re sitting out there at night on your patio, you can listen to the water, it’s very tranquil.’ Guess what I had to have? I had to have the fountain. It wasn’t even an option. Nobody else showed a fountain. This guy did, so he got the job. It’s the same thing in the HVAC world. Nobody else showed air-duct cleaning. Why would you want to put a new furnace in with dirty ductwork? It’s just that kind of question that puts a little doubt in customers’ minds, because they don’t want dirty ductwork.”
Mark Alford, president and CEO of Alford Air Conditioning Inc. in Tequesta, Florida, said his techs find it easy to sell RGF Environmental Group Inc.’s REME HALO®, because they all have one installed in their own homes.
“Since our employees know the product firsthand, it makes it very easy for them to talk about its benefits,” Alford said. “They wholeheartedly endorse the product on service calls. Our employees’ satisfaction is our most important business card. For my company, it’s important to have the full endorsement of my employees. They cannot sell products they don’t believe in.”
INCREASING THE BOTTOM LINE
One advantage to successfully selling IAQ products is they help contracting companies increase their bottom lines.
“IAQ sales are huge,” Smith said. “Many IAQ products, like the AirScrubber, take 15 minutes to install and can have a 50 percent gross margin. That is a huge driver of increasing profit margins, and it’s a huge benefit to our customers. I have an air scrubber at each of my houses and offices.”
IAQ products and accessories generally have high profit margins, Merritt noted.
“They increase the number of items the homeowner is responsible for,” he said. “That being the case, it drives the conversation toward ‘worry-free maintenance,’ because if they purchase our maintenance agreement program, we’ll take care of everything for them. The more items in the home, the more we will be in the home. The more times we’re in the home, the better our bottom line. The best customers to get are the ones you already have. Too many companies are always worried about getting new customers all the while hemorrhaging customers they already have because they don’t pay enough attention to them.”
IAQ products, if sold properly, will certainly increase a company’s bottom line, McAfee said.
“We can add anywhere from $300 to $1,200 in accessories a customer would not have purchased had we not asked a few key questions,” he said. “You’d be surprised how many people buy HEPA filtration. A few years ago, before the pet industry was a multi-billion dollar industry, I was in a home and the customer said she wanted to buy a HEPA filter on behalf of her dog. I thought, well, the dog must shed a lot. But she said her dog had allergies. This was a $3,800 filter, and she purchased it because her dog had allergies. We now make notes of dog’s names when we’re in homes, because if you have pets, we use that line — ‘If you have allergies or your pets have allergies, this product is awesome.’”
McAfee said offering multi-product discounts may help close a potential IAQ sale.
“Some companies try to price an IAQ unit as if they were selling it individually instead of selling it as a package,” he explained. “We bundle things. A humidifier might cost $750 if it was installed by itself, but as an add-on to a system installation, its $450. An air-duct cleaning might cost $500, but, we’ll knock it down to $300 as part of a system install. The more you bundle, the more you save. This approach is still very profitable, and it does add to our bottom line.”
Having the conversation is the most important part, Orr said. “The average IAQ upgrade is going to be about $500. If we do an upgrade that results in us collecting $500 gross with an additional hour of labor, then that can significantly increase our average because our average billable per hour, company wide, including parts and materials, is about $200. So, if we can increase that by adding on an IAQ product for the customer, that significantly increases our profitability in the same amount of time spent. It’s about a 2:1 ratio of our billable per hour when we add on IAQ products versus HVAC repairs without them. IAQ is a really deep conversation when you get into the specifics, but I think the main thing is to use it as a method to build relationships with customers by offering things that already suit their desires.”
SELL THE BENEFITS
Daniel Jones, president of UV Resources, shared some insight into selling IAQ products.
“Potential buyers are often concerned about the cost that might be associated with IAQ products, such as UV-C, as well as the claims being made by manufacturers,” he said. “UV-C has a proven record of improving IAQ, reducing maintenance, and boosting energy efficiency. This record can be demonstrated through case studies of similar building types that benefited from the installation of UV-C equipment, university studies, ASHRAE’s supportive position documents relative to UV-C installations, and support material highlighting ease of application. The fact that the costs associated with UV-C installations have decreased by 50 percent or more over the past 10 years also factors into the benefits of this application.”
According to Jones, contractors should emphasize that improving IAQ using UV-C has the dual benefit of providing healthier breathing for occupants and reducing a/c cooling coils’ susceptibility to mold and bacteria buildup.
“On the human side, clean air can reduce sickness,” he said. “In addition, UV-C has been shown to stop and prevent foul odors from emanating from the cooling coil, where mold and bacteria are growing. On the mechanical side, UV-C energy helps prevent and remediate fouled coils in HVAC systems and the inefficiencies and higher energy costs associated with that. Finally, it reduces the need for frequent HVAC cleanings, especially if a UV-C lamp is installed, which eliminates the need for manual maintenance, with the exception of an annual bulb change.
“Adding the UV-C option to their quiver allows contractors to improve their bottom lines on potentially each service call they make,” Jones continued. “When at a residence, a contractor has the opportunity to upsell a customer and can actually feel good about the fact that the solution they are recommending can improve the customer’s quality of life through improved IAQ and a/c system performance. In addition, a contractor will no longer need to pull the system apart for a thorough, manual coil cleaning. Finally, when a contractor has installed a UV-C system, he or she has a natural reason to follow-up with the customer on an annual basis for a lamp replacement, which could potentially lead to other annual sales/service opportunities for the contractor.”
Publication date: 4/24/2017