Embracing the IoT is Key to HVAC Sales
Manufacturers create smart, customizable products for residential contractors and homeowners
Ah, the Internet of Things (IoT) — it seems to be a trending topic for every industry these days, especially with customers becoming increasingly tech-savvy. According to market researcher, Gartner Inc., in 2017, 8.4 billion connected devices are in use worldwide. That number is up 31 percent from 2016 and will reach 20.4 billion by 2020.
Numbers talk, and the HVAC industry has listened. HVAC manufacturers are consistently expanding their product lines to meet the ever-changing demands of the modern-day customer, and residential contractors are looking to sell the newest technologies. While the demographic for smart products does tend to lean toward the younger generations, this trend is not going away any time soon. Therefore, contractors are looking to capitalize on this growing market by introducing IoT products to all of their customers in an effort to make their homes smarter, energy bills lower, and provide greater overall comfort.
While it may seem like a no-brainer to sell new and interesting smart products, it’s not always the easiest process. Contractors have various demographics within their customer base and want to make the sale each and every time. For example, it may be a little more difficult to convince an 82-year-old grandma of the benefits of a smart thermostat with mobile connectivity — especially considering she may not even own a smartphone. It’s something that a lot of contractors are running into.
“There is no doubt the Internet of Things is trending,” said Butch Welsch, owner of Welsch Heating & Cooling Co., St. Louis. “Currently, we sell connected Wi-Fi thermostats, which are becoming more and more popular with the millennials, less so with the older generations.”
However, there is a sales process involved in selling IoT products, and contractors are seeing success in offering the latest and greatest for their customers. But, what is the most important part of this sales process? Knowing the product inside and out. If you believe in it, so will your customer.
“For those who are not aware of this technology, we share how we use these items personally at home and in the Magic Touch Mechanical offices and how they make our lives more convenient,” said Rich Morgan, CEO, Magic Touch Mechanical Inc., Mesa, Arizona. “I know for myself, for example, I regularly pull out my phone and show people how I control my HVAC equipment, garage door opener, smoke detectors, etc. on multiple properties all at once. The live demonstration speaks for itself — who doesn’t want that level of convenience and security? Usually, I seal the deal by telling people how often I’m using my phone like a remote control at home to change the temperature in the room without having to pause the show I’m watching.”
Matt Bergstrom, president of Thornton & Grooms in Farmington Hills, Michigan, sells IoT products by educating the customer.
“We just help educate our customers of the issues they are experiencing and help figure out the best product solution for them,” said Bergstrom.
But, Bergstrom also noted that it’s not always easy to sell people these high-tech products when manufacturers are evolving them so quickly. When asked if he thinks the HVAC industry is ready to truly embrace the IoT, Bergstrom said not yet.
“I would guess that contractors are holding this back a bit because we don’t fully understand it or know what products are going to be the ones that are going to be the best in the long run,” he said. “Products are improving so fast it almost paralyzes contractors because, by the time we learn it, something new is in, and that old product is out.”
So, once the sales process is perfected, what are residential contractors selling?
“In our market, we are still in the ‘early-adopter’ stage,” said Steve Schmidt, president, Frederick Air Inc., Frederick, Maryland. “Security products like locks and window or door sensors, as well as IoT lighting solutions, are the first to sell. With the advent of Alexa and other voice command hubs, we are starting to see more interest in items for convenience, like connected outlets.”
“We sell the ComfortGuard Smart Maintenance,” said Rob Minnick, Minnick’s Inc., Laurel, Maryland. “With ComfortGuard, we send performance checks each month that let our Smart Maintenance customers know how well their system is operating overall and when it’s time for a cleaning. It also emails the customer in real time if there is an urgent issue with a component or when it’s time to change their filter. Our customers are busier today more than ever, and they really appreciate only needing to have maintenance when the system lets us know, rather than having to go out to their home. It saves us all a lot of time.”
American Residential Services (ARS), Memphis, Tennessee, has partnered with Google Nest and offers the Nest Learning Thermostat, Thermostat E, Nest Protect, and Nest Cams. By doing so, they’ve seen a growing interest in products beyond thermostats, and they are selling big time.
“Cameras are the most popular smart device,” said Christopher Mellon, senior vice president, chief marketing officer of ARS. “As an established home service provider with experienced technicians, installing Nest Cams is a natural fit for ARS providers. It also allows ARS customers the ability to be completely connected to their home. ARS’ customers are already discussing HVAC around the kitchen table, and, now, ARS can broaden that conversation to a number of connected home capabilities.”
Bergstrom has invested in software IoT products, specifically ServiceTitan software and real-time GPS for the company’s fleet, but he has also found success selling a variety of Wi-Fi-enabled thermostats.
“We are using Lennox’s S30 communicating thermostat,” he said. “It allows the customer to see if the system has any faults, and it looks pretty cool. We also install the Nest thermostats and the Sensi by White-Rodgers. All are doing well for us.”
Welsch has also tapped into the Wi-Fi thermostat market and started selling higher-end smart equipment.
“Currently, the higher-end Bryant equipment we install utilizes a special Bryant thermostat that communicates with the furnace and air conditioner and is internet connected,” said Welsch. “Once set up properly, it will send notifications to designated emails. The notifications can be anything from regular maintenance reminders to replacing filters, as well as alarms if there is a problem with the equipment.”
In addition to Wi-Fi thermostats, Morgan has taken his product offerings a step further.
“The IoT products we’re seeing the most traction with are wireless Energy Management Systems (EMS) and associated sensors and controls, smart thermostats, mini-split Wi-Fi controls, and, most recently, Wi-Fi lead detection and freeze detection sensors,” he said.
CUSTOMIZED FOR CUSTOMERS
The biggest benefit to selling IoT products is the ability for contractors to customize them to fit their customers’ lifestyles. Manufacturers are making great strides to provide contractors with a variety of customizable IoT products that are easy to install and sell.
“Our Sensi thermostats are simple to use by both our contractors who are installing the thermostat and servicing heating and cooling equipment and by our homeowners who use it daily to manage their home comfort,” said Ed Blittschau, vice president of marketing, White-Rodgers for Emerson’s commercial and residential solutions platform. “With some smart products, there can be a tendency to throw everything in but the kitchen sink. Features can become gimmicky instead of useful. We put a lot of research and Use Experience Design (UX) studies into deciding what technology is actually valuable — something that people want and will use.”
Similarly, Carrier Corp. has developed a portal that pairs with its Côr thermostats to benefit both the customer and contractor.
“Carrier continues to invest in our Connected Contractor Portal with our Côr thermostats that provide real-time system data and diagnostics to dealers and homeowners,” said Siva Iyer, head of smart home, Carrier Corp. “The Connected Contractor Portal also provides more actionable and predictive information directly from the equipment to the Carrier dealer, who serves as the equipment expert. The information travels from the Côr thermostat to the Carrier factory and also via an online portal to the dealer who installed it.”
Now, even the look of the thermostat is important to customers, which is why Lux Products Corp. created the Lux Kono Smart Pro Edition that allows consumers to customize the appearance.
“Our aluminum control knob looks great and can match any décor with our changeable décor-snap covers,” said Gary Hsieh, director of strategy, services, and support, Lux Products Corp.
And while consumers appreciate the ability to customize the way their products look, they also want to customize the way they work.
The ability to connect to HVAC systems from multiple smart platforms allows homeowners to customize their comfort level and energy usage.
“The Nest learning Thermostat uses Machine Learning algorithms to learn from and adapt to the homeowner’s routine to make sure they’re always comfortable,” said Gene LaNois, general manager of Nest professional channel, Nest Labs Inc. “The Nest thermostat learns from occupants — it gets to know the temperatures they like and when they like them. Then, it programs itself and creates a schedule. It even learns from the home and figures out how it heats or cools, because no two homes are exactly the same. Homeowners can check on their Nest products from anywhere using the Nest app via their smartphone, which is a huge perk to customers.”
Lux Products Corp.’s Home and Away Aware feature allows customers to program what times they are home or away, allowing them to create their own temperature schedule.
“The Home and Away Aware feature automatically adjusts the temperature to a personally selected preference when leaving or entering the home by simply setting a custom radius on the Lux mobile app,” said Hsieh.
While these technologies work great for consumers with regular daily schedules, not all homeowners and families fall into that category. Geofencing technology allows flexible scheduling options, so customers can save on overall energy costs.
“Homeowners can use the new geofencing proximity detection feature or flexible scheduling options to achieve energy savings without compromising their comfort,” said Blittschau. “For busy people, or people with families with no set schedule, the geofencing feature allows them to be more efficient with their heating and cooling energy usage without needing to remember to adjust their thermostat. For those with a more predictable schedule from day-to-day and week-to-week, the scheduling feature may fit their lifestyle better.”
In addition to all these technologies, providing interactive messaging helps the homeowner make the best decision and also enforces energy saving measures, according to Hsieh.
“For instance, we offer a Smart Tips feature as part of the Lux App. The Smart Tips feature automatically sends seasonal tips on ways to help save energy. It offers general tips, as well as proactive suggestions, based on the user’s behavior on how to best save money and be energy efficient. These year-round recommendations help consumers manage their wallet and energy usage.”
With the IoT evolving at such a rapid rate, manufacturers continue to develop connected products equipped with the features that satisfy both residential contractors’ and customers’ demands.
“Some of our products are able to leverage algorithms to learn the home and how the people live in it to optimize energy savings,” said Iyer. “Our products can also tell if the HVAC system is oversized or undersized, which gives the homeowner a clear directive to optimize the system’s efficiency. It can also analyze how quickly the house gains or loses heat and is able to make adjustments to optimize daily operations to minimize run time while maximizing comfort. All of these intuitive, technology-driven adjustments can lead to energy savings for consumers.”
Publication date: 12/4/2017