One of the problems may be that the air filtration industry, with numerous nondifferentiated products, is highly competitive. Purchasers recognize this and can use it to drive prices down. Moreover, the initial purchase price of any product is tangible; one can immediately see the cost savings and resulting effect on a budget.
Some HVAC contractors are attempting to shift this paradigm by focusing on value instead of price. Customers often think of value as only a buzzword, and others argue that price rules over features. But while price will always be a consideration, it's important to understand that price only encompasses the initial cash outlay for acquiring a product. Indeed, price is only one component of the bigger cost picture.
What The Customer WantsContractors have their own customer groups. Building owners and tenants, for example, want different things. Tenants want clean air, and building owners want happy tenants without sacrificing their budget. If the cost of providing clean air exceeds the budget, managers are faced with a decision: either continue to provide clean air to tenants and exceed the budget, or focus on meeting budget and potentially jeopardizing the health and productivity of the tenant.
The facility manager will most likely choose to meet budget first. And when operating budgets decline, the facility manager may look for opportunities to reduce product expenditures. This, however, may not be the best approach, especially if it involves sacrificing quality or performance.
Energy Savings ValueReflecting back to the concept that price is a component of total cost, consider what an HVAC filter costs to operate. Studies have shown that investment and maintenance account for about 18.5 percent of the cost to operate a filter, while energy accounts for about 81 percent of the annual cost. The numbers in Table 1 show the breakdown for various types, verifying that energy provides the biggest opportunity for cost savings.
Smart facility owners will want facility managers concentrating their money-saving efforts on the area of greatest opportunity. They may be surprised when told that the area of greatest opportunity is not the initial filter price, but the related energy costs. That's why it's important to get customers focused on cost-savings instead of price-savings.
Price-savings refers to the relatively small amount of savings that can be achieved by negotiating with suppliers on purchase price. Cost-savings relate to costs as a whole, and include the larger energy costs as well as reduced labor costs possible when upgrading to a higher-capacity filter that doesn't need to be changed as frequently.
Instead of forcing price deflation, building owners and facility managers would be better served by upgrading to new, high-performance, energy-efficient filters that provide sustainable cost savings over time. Filter manufacturers should respond by developing the next generation of cost-effective, energy-efficient filters beyond what exists on the market today. And HVAC contractors should focus on selling value: the best filtration performance at the lowest total costs.
Contractors should also be-come educated as to what performance means. It includes much more than efficiency and expected filter life. Other items - such as resistance to microbial growth, the propensity of the filter media to shed fibers, and the energy costs - should be considered as well.
Running the above information through a simple energy cost model, such as the one available at www.kcfiltration.com, results in an energy cost difference of $29/year (using the same assumptions for both filters). While $29/year may not sound significant, keep in mind that the savings is per filter.
If the customer is still not convinced, try framing the savings in a different context to make it applicable to the specific situation. It is important to communicate these savings in a method that is meaningful to the customer. For example:
However the information gets communicated, the important point is that there is more money to be saved in energy cost than there is in the initial filter price. In addition, the money saved with reduced energy costs is a good way to pay for upgraded filter efficiency and upgraded indoor air quality (IAQ).
It is important to communicate these savings in a method that is meaningful to the customer.
For those who may think that such a "magical money-saving filter" doesn't exist, remember that the data presented was generated from commercially available filters. In fact, development of newer materials has provided the filter industry with a chance to produce lower pressure drop filter media which reduces electricity usage costs while maintaining high particle capture efficiencies. With a lower pressure drop filter, the HVAC system motor needs to overcome less resistance to deliver the required airflow, thus reducing the motor's energy consumption.
It is up to each HVAC contractor to work with their suppliers to demand lower pressure-drop filters adding value to the customer, the facility manager, and the building owner.
Matela is with Kimberly-Clark Filtration Products. He can be reached at email@example.com.
Publication date: 12/05/2005