Knowing and Meeting Customers' Green Demands
Small and large HVAC businesses are adjusting to the increasing consumer demand for green products and practices. Despite the trouble with green washing, federal reports indicate that the green economy will not only continue to grow, but that it will also be a key arena in providing a new source of jobs in the near future. With its promise of a better environment and improved economy, the increased demand for green products and services is often undefined territory for business owners along the supply chain. Distributors are no exception. As the HVAC distributor considers what green means to their customers and business, many of them realize it will likely take more than adding a few product SKUs to engage the green arena.
MAKING A GREEN EFFORTArnold Morgan's customers have a high interest in green equipment, and he thinks that it just makes good sense for the consumer as well as for his contractor customers.
"For contractors, their customers are more comfortable with green equipment and what that means to them in energy and cost savings," said the territory manager for O'Connor Co. Inc., a residential and light commercial distributor in Wichita, Kan. "Consumers are being taught how they can control their energy usage and that is helping drive the increasing demand we are seeing."
No longer tied simply to a desktop computer, many of the energy monitoring applications currently being introduced have mobile platforms allowing consumers consistent access to system controls and information at any time.
"Providing these types of technology to their customers gives contractors the ability to enjoy a business climate of increased profits and satisfied customers," said Morgan. "Distributors play a key role in providing these products and training to help contractors succeed in the green market."
O'Connor Co. not only provides some of the latest green products to its customers, but it has also adopted some green principles in its own business practices. The company continues to improve its recycling efforts, as well as furthering its energy-saving and efficiency discussions with residential and commercial contractors that come through the business' door.
"We also promote the R-410A refrigerant and all but refuse to sell equipment that uses R-22," explained Morgan. "The manufacturer market share has become a driver for us somewhat being forced to get back into the distribution of R-22 refrigerant."
SORTING THROUGH CUSTOMERSFrom the consumer to the distributor, not everyone is jumping on green opportunities. Ivan Quinchia, vice president and general manager of Air Purchases Inc., a wholesale distributor in Burlington, Mass., divides his customers and their consumers into two classes - trend setters and skeptics.
"As in most cases when there is new technology and new opportunities, there are trend setters and skeptics," said Quinchia. "It is typically a small minority that are trend setters."
He continued to point out that green technology brings contractors benefits, but that those choosing to embrace green initiatives are also choosing challenges.
"I instruct my customers that are interested in green technology that there some basics they must first understand," Quinchia explained. "One of the more important realities is that green technology is highly technical and often requires some form of certification. These technologies also require a commitment in time for education and this can be challenging since the education time is usually a non-revenue producing time."
The distributor also takes the time to give his customers information about what he considers to be the extended sales process of green technologies. According to Quinchia, the process can be lengthy and require analytical skills on the part of the salesperson.
"In most cases you are selling payback," noted Quinchia. "It also requires knowledge of available regional utility rebates, as well as state subsidies/credits, and federal subsidies or tax credits."
Despite the realistic warnings he gives his customers, Quinchia still feels there are benefits to his customers who engage green technology. According to him, geothermal seems to be the green technology of choice in their region as it is getting quite a bit of traction at Air Purchases Inc.
TRENDING INFORMATION AVAILABLEWhat green technologies are contractors' customers asking for and how often? The short answer is it depends on the region and the contractor. That being said, a good source for this trending information is likely the contractors walking through the distributor's door on a regular basis.
For those who are offering more green products and incentives, the respondents to an informal contractor survey said that their customers' interest level ranged between medium to high. Quite a few showed that consumers were willing to listen but that they weren't always ready to pay the increased cost for green technology.
"The interest is there," said Skip Ronan, owner of Abell's One Hour Heating and Air Conditioning, Scituate, Mass. "The price of green, however, scares them away to less green products."
According to survey respondents, uncertain economic times weighed heavier on the consumer's decision-making process as well.
"We have found that prior to 2011 customers were more open to green equipment and incentives," said G. Andrew Smith, president of Bob Smith Air Conditioning Inc. DBA Aire Serv of Southeast Texas, Nederland, Texas. "Beginning in 2011, customers started making economic choices due to uncertainty in the economy."
Fred Kobie, president of Kobie Kooling Inc., Fort Myers, Fla., said that most of his current customer interest in green equipment and technology is tied specifically to financial incentives.
"Very few of my customers are primarily focused on green equipment but will select green if there is a discount incentive to do so," he said. "Even efficiency investments are not made unless tied to valuable incentives. Green is not a stand-alone motivator in southwest Florida."
GREEN EFFORTS REWARDEDThe HVAC industry supply chain continues to meet the challenge of green technology head on and each link seems to have its role to play in the education, promotion, and installation of green equipment. Distributors are no exception and as they analyze the growing demand in the green market, they should be able to identify the products and services that will assist their contractor customers in meeting consumer demand. For some it could be education and training, for others it could be incentives and rebates.
Most likely there is money to be made in the green market, and with distributors and contractors working together, perhaps both will reap the rewards of their green efforts.
U.S. Energy Secretary Steven Chu made multiple appearances at the Solar Decathlon in Washington, D.C. The event was later opened to the public in an effort to continue green and sustainable education of the overall public. (Credit: Stefano Paltera/U.S. Department of Energy Solar Decathlon)