'Too complicated' stifling sales?

One of the biggest challenges this segment of the market faces is consumers that have a difficult time programming their thermostats. If they were easier to program, the average end-user would be able to take full advantage of the long list of benefits provided by programmable thermostats, and contractors would reap the profits.

The market for setback thermostats currently accounts for 21% of the entire market, with revenues estimated at $212.5 million for 1999. This segment includes the conventional programmable thermostats with the five-day week and two-day weekend programming features. This segment also includes light-sensitive setback and occupancy setback models.

The conventional programmable thermostat is the one most commonly used in residential and light commercial applications. Ironically, it also happens to be the one most end-users are having difficulty programming.

The industry consensus is that most market participants do see this as a challenge, but have not given it the attention it merits. The fact that most end-users cannot program their thermostats has them looking for more user-friendly options, such as the electromechanical thermostat.

According to manufacturers, end-users can achieve up to 30% savings in their utility expenses with the use of a programmable thermostat. Unfortunately, they are passing up these benefits for something much easier to operate.

As a result, this market segment has been limiting its market potential and not achieving the type of growth a technologically advanced product should be experiencing. Currently, this market segment has been experiencing an average growth of 3% to 5%, which is minimal for a product that can offer more than just a functional benefit.

The market is composed of players like Honeywell and White-Rodgers, whose experience in the field should be enough to give them the insight needed to develop a user-friendly product that anyone with minimal technical sense can program. However, this issue relates back to the principle of consumer behavior and the learning curve.

Conquering the learning curve

The answer lies in minimizing the learning curve between old technology(electromechanical thermostats) and a more advanced one (programmable thermostats).

Achieving this is easier said than done. Fortunately, there are key consumer research programs that can offer research and development departments an advantage when creating products.

A recent trend in the manufacturing industry has been to develop products that engineers and product managers feel consumers will be comfortable operating. The fact is that neither engineers nor product managers have ever been able to develop a successful product without first consulting with the key advisor, the customer.

It is not uncommon to have manufacturers skip over this very important step in order to get the product to market within a limited amount of time and under a limited budget.

The programmable thermostat, based on its benefits, is a must for anyone with an hvac system. The demand for the product is there.

The only thing that remains to be resolved is to give the end-user a product that is functional, while at the same time easy to operate. The only major strategy manufacturers need to undertake is to develop a research program that can ask end-users to guide product managers and engineers so they can develop a better product.

It can be assumed that the manufacturer that develops the “perfect” product will have an apparent competitive advantage and will retain a healthy portion of the market.