HVAC Contractors Find Money, Customer Satisfaction at the High End
YEAR-ROUND INSTALLS: High-end heat sales, installation, and maintenance happen year-round, but some contractors find they have better success in spring and fall, when the heating replacement is not an emergency.
Sales + installation + maintenance = business. It’s a simple equation that HVAC contractors apply to their businesses on a daily basis. The equation doesn’t often change but the products do, especially when considering specific market sectors such as high-end heat. For many contractors, high-end heat represents a good investment with solid returns. So how do contractors get involved in high-end heating equipment? They talk to other contractors and find out what worked for them.
CUSTOMERS FIRST
Chad Texter is sales manager at Haller Enterprises Inc. The plumbing, heating, cooling, electrical, water conditioning, and solar contractor has five locations in Pennsylvania — Lancaster, York, Harrisburg, Exton, and Quakertown.
“The key to upselling high-end heating products is to present the options to a customer and educate them on the different levels of equipment,” he said. “This allows our customers to pick the equipment that’s right for their house and family.”
Before presenting options, contractors will need to know exactly what is best for the home and listen to the customer for their problems and concerns. Haller has a special team that goes through homes and designs systems to specifically meet the customers’ needs and expectations. The team also considers what equipment will work best with the design and construction of the home.
According to Texter, the company’s mission is to enrich lives, and one of the ways employees do that is through selling and installing high-end solutions. Two days after one install, he had a customer call him in tears. She was overjoyed with the new system and wanted to call and thank the Haller team for their time and hard work. She said she had lived in her home for 20 years and had never been so comfortable. Though calls like these may not be typical, living up to the company’s mission is.
“High-end equipment is all about the customer, and a common feature on this type of equipment is self-diagnostics,” said Texter. “The equipment communicates with each piece of the system, and if there is a fault signal sent to the thermostat, it can be sent to the customer’s phone.”
Using these same fault codes and self-diagnostics on arrival allows Haller’s technicians to quickly finalize the diagnosis and make repairs. The quicker calls save time and money for both the contractor and the customer.
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MOVING PROFIT MARGINS
Ben Young is the CEO of Hybrid Air Inc. in Virginia Beach, Virginia.
He uses the technique of offering a good, better, best approach to sales, but he always encourages the higher-end product. He said that simply offering high-end products is the key to selling them.
“Technicians or salespeople think with their own pockets, and that’s wrong,” Young said. “Don’t judge a book by its cover. Offer it all.”
Chris Hunter, owner of Hunter Super Techs in Ardmore, Oklahoma, said high-end systems have changed his business model.
“Higher-end systems allow you to focus more on quality than quantity,” he said. “It typically produces the equivalent gross profit dollars of one week of service work.”
The company sells high-end heat year-round but often sees a spike in sales in the spring and fall.
“Don’t get me wrong, we install them year round,” Hunter said. “But overall, we do better when it’s not an emergency for the consumer and they have time to make a decision instead of being forced into what they have to have now.”
Approaching each customer as someone with an 840 credit score is what helps Hunter and his technicians with every sales call. Doing this levels the sales playing field, and there are specific strategies and illustrations used by the company to help customers grasp the effect of investing in a high-end heating system. One element Hunter discusses is the difference in warranties.
“The higher-end efficiency systems typically will have a greater labor warranty included or that we offer on them, and sometimes, better manufacturer warranties,” he said. “For example, our top-of-the-line high-end comes with a 10-year labor warranty and limited lifetime unit replacement manufacturer warranty. Most lower and middle of the road systems only come with one- to five-year labor warranties.”
The company’s high-end furnaces actually come with a lifetime guarantee on the heat exchanger and, according to Hunter, the closest in the industry to it is only 20 years.
Another example to help communicate value to the customer is to explain the outcome of installing a high-end heating system in terms of dollars and cents.
Hunter Super Techs like to ask their customers to imagine paying $1 for heating their homes. The dollar that goes into an 80 percent furnace sends 20 cents up the flue pipe and 80 cents worth of heat into the house. With a high-end option, those numbers change: Only 2 cents is heading up the flue pipe, and 98 cents is heating the home.
Manufacturer Advice to Contractors
Selling, installing, and maintaining high-end heating equipment is the key to a contractor’s success. There is profit to be made when installing these systems and plenty of opportunities and markets that haven’t been touched yet.
The best advice for any unit, but particularly higher efficiency units, is to take your time during installation to make sure the unit is set up correctly. Often a second trip must be made to a home because of a simple issue, such as the furnace and coil not being level, the proper airflow not being chosen, or the refrigeration charge not being accurately set.
Homeowners are doing much more research upfront and online. In addition to learning about products, they’re going online to find contractors, and they expect responsiveness. Stay up-to-date on the latest tech and invest in a laptop/tablet if you haven’t already. Customers want to work with contractors who listen to their needs, know the latest research, and can provide onsite recommendations based on real-time data.
With the definite and aggressive shift away from fossil fuels and toward the use of electric equipment, contractors can position themselves on the leading edge of the industry by getting well-acquainted with air source heat pumps for extreme climates. Participation in the ongoing Strategic Electrification of the country is logical for any contractor. Utilizing this participation as a sales tool, along with taking advantage of utility rebates, puts contractors at an advantage when it comes to selling high-end heating equipment.
When it comes to selling and installing high-end heating equipment, contractors should be working a brand and product they trust. This means a quality product with a long life expectancy. In general, it’s important contractors do their research and embrace new technologies, such as inverter technology and connectivity. High-end heating should increase comfort and lower energy bills, making it a worthwhile investment for homeowners.
Find a brand that gives you the support you need and push consumers to have regular maintenance with service contracts and extended warranties.
Engage in manufacturer’s training and certification programs and leverage the tools that are available. Homeowners more frequently shy away from high-end systems because they feel it may be beyond the cost they are comfortable spending. Monthly payment options, seasonal promotions, and exceptional warranties provide the flexibility and peace of mind to make the decision to invest in high-end equipment.
Essentially, prepare for the future. Embrace technology, familiarize yourself with the new products and software available to you. High-efficiency products are only part of the equation. Taco offers a wide variety of tools, apps, and design software to make your job easier and more profitable … but only if you use them. Think of the components you select as part of an integral smart system that can run more efficiently and reliably when they work and communicate together, instead of just as a collection of stand-alone piece of equipment.
Rheem’s team of experts would share with contractors that as technology advances across all industries, homeowners will increasingly demand technologically advanced products, so now more than ever, it’s crucial to stay current of new tech developments. Furthermore, customers are online. Contractors should consider online reviews and advertising. Customers are regularly taking to the internet to review products and services. The word-of-mouth way of business may soon be obsolete.
Take advantage of the diagnostic capabilities available through the systems and use them as a way to build long-term relationships with your customers. By proactively reaching out and resolving system issues, you can become your customers’ trusted HVAC advisor.
HVAC contractors must continue to be a service provider to their customers and offer the best solutions for indoor comfort that allow the homeowner to have greater control and easier access to their HVAC system. The more involved homeowners are with their HVAC systems, the more they will choose high-efficiency heating systems. Walking to the thermostat to change the temperature setting will soon seem as antiquated as changing the channel on a television without a remote control.
Publication date: 11/19/2018
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