In the famous book, A Tale of Two Cities, the opening line accurately describes the issues confronting both small and large HVAC businesses today – “it was the best of times, it was the worst of times”. How better to describe the circumstances and conditions which erupted full force sometime around the beginning of March.
Irrespective of the kind and style of your business, you have relied on some aspect of marketing, which hopefully your company balanced with a well thought out “sales plan.” We recognize that in some companies, people may get upset when what they offer as service technicians, project managers, proposal writers, and estimators (and similar) is categorized as selling.
Within the structure of all HVAC companies, who offer sales and services sold directly to homeowners, there has to be a model of communication and interaction that meets the wants of customers, and fulfills the unstated needs, which are not always apparent. The sales visit then becomes a problem-solving discussion between a salesperson/communicator and a prospect that leads towards a meeting of the minds that deepens the dependence of each on the other.
Despite your intuition, you may be doing things that fail this purpose. Presenting speculations or ideas before you do “a thorough needs assessment,” quoting prices in “ball park” figures, believing that a “price break” will compensate for a weak or poor presentation, giving prices over the phone without an actual, thorough inspection of the project, and failing to ask for the order in a non-offensive manner all negate the process of meeting the prospects needs. We deem these to be malfunctions in the sales/communication process.
Changes and Challenges for HVAC Sales/Marketing
Shows and events were/are cancelled and the prospect of them fully reopening does not loom on the near horizon. Television and radio “spots” were available at a bargain and now have diminished due to political advertising. Many homeowners virtually barricaded in their “health safety” cocoons, bristled at the thought of allowing someone in their home, except for emergency services. Those companies which utilized outbound solicitation of old customers or leads found they were hampered by poor techniques and even poorer return on investment. Some companies tried little or nothing with the assumption that the pandemic conditions would soon pass.
Let’s return for a moment to those companies who rebel against the use of the word “selling” or “salesperson.” Many search for techniques which avoid modern “selling practices” altogether. Consider this universally accepted fact: whenever an interaction between parties takes place for the purpose of establishing new ideas, exchanging goods or services, or the development of a relationship, some form of selling will occur. The skills of the communicator/salesperson will determine the outcome.
Closing the HVAC Sale Is Neither Magical, Nor Mystical
It is a process – a science by which you introduce your product or service to others in a manner which convinces them that your offer meets their needs better than that of others. Closing the sale is the natural conclusion to the satisfactory completion of each step of a sound sales methodology. All steps are built on understanding and respecting the values of your prospect, then perfecting a technique called Customer Satisfaction Selling.
In most HVAC companies, the marketing plan has to be rewritten. In all probability, it was already out of date and counterproductive long before the pandemic hit in March.
Also, many HVAC companies had a great year end in 2019 and business was moving at a fast pace in the early months of 2020. Even more factual, many companies thinking they had grabbed the “bull by the horns” have had a highly productive business intake for the second quarter. So, what genuine concerns are there for businesses large and small in the HVAC industry in the months ahead?
A Closer Look at Some Market Realities
- Marketing costs, though not clearly defined, in many companies range from lows of 12 percent to highs of 22.5 percent or more.
- The average cost of an issued lead ranges from a “low” of $250 to a high of $600 or more.
- Closing rates-vs-leads issued to the salesforce were below 40 percent and less than 30 percent in many companies.
- Compensation methods for salespeople (including managers) frequently are not tied to the proper analytics.
- Customer service practices (language and attitude) require change.
- Cycle time has increased for many products – cash flow is highly affected.
- Recruiting, retention and retraining costs will continue to escalate. Turnover and out of date sales and marketing methods and customer service techniques require change.
- The use of independent contractors for installations will be challenged more than ever.
- Forthcoming changes in home improvement financing and the way it is presented in the home requires improved training of sales/marketing personnel.
- Actual profit (pre-tax net) and cash flow has to be improved in most companies.
Let me be clear – these are realities and there are more to come. However, knowledgeable companies dedicated to unearthing the needs in their organization, then applying discipline to effectuate change can “thrive not just survive” in this new, ever changing environment.