I am sure your company has received this call. It is from a homeowner you’ve never done business with. This individual has found you either through a Google search or perhaps your catchy radio jingle.
At this point, you’re thinking either service call or a replacement install. That is when the homeowner throws you a curveball. He or she has purchased an air conditioner online and would like you to install it. No product sales for you, just your time and labor. This would have been almost unheard of 15 years ago, but now I assume most contractors are receiving calls like this on an all-too-regular basis.
It is decision time for you as a business person. Do you install the product and make some money, or do you tell the homeowner to take a hike?
When I first started hearing about this trend, I was fairly certain how a contractor worth anything would react to this request. I assumed 98 percent of contractors would offer a polite thanks but no thanks. They would explain to the caller that this is not how they do business, and the homeowner would move on to the next company.
However, as is frequently the case at my house, I was proven wrong. We ran a poll at achrnews.com where more than 300 contractors voted. The results showed that 30 percent of contractors are willing to install products purchased by customers online while 70 percent would not. There were still more people saying no, but it was much closer than I imagined it would be when we posted the question.
Then came some anecdotal research performed by myself. While traveling to numerous events the last few months, I commonly brought the subject up with contractors I trusted and respected to gather their thoughts. More than a few I talked with were perfectly fine with installing these products. And they had sound reasons for doing so.
Of course, they made sure the math worked in their favor. One contractor in Texas had a fairly airtight plan.
When he receives such a call, he confirms that his company can install the product. Then he begins the discussion on price. This contractor takes his normal price for purchase and install and subtracts how much he is paying wholesale for the product. So, at this point, his margins are not changing.
He was also quick to point out that he has no warranty responsibility. You see, the warranty exists between the homeowner and whomever he bought the product from.
The same thought process exists in regard to the size of the system. The contractor was not responsible for the load calculation, so if the system is sized wrong, the homeowner has only himself to blame. So, according to this contractor, his margins actually improve with this work as there is a limited callback opportunity.
Now there can still be some issues with this course of action. The sizing of the equipment and warranty explanations seem logical to contractors, but when something is wrong with the system, the homeowner wants someone to blame. And while you may not be responsible for what is going wrong, it does not prevent customers from becoming keyboard tough guys and tarnishing your reputation online. There is also the concern that the skills HVAC contractors offer may become a commodity, which could inevitably lead homeowners to shop solely on price.
I am not saying this is the decision you should make in your business. Perhaps it does not work for you. However, I am saying that it is shortsighted to immediately dismiss installing equipment homeowners have already purchased without giving it some real thought.
Publication date: 7/3/2017