Google Poised to Take a Piece of the HVAC Pie
I’ll admit, I’m an avid Google user. I use Google search for just about everything — when I need to figure out a song lyric; look up a movie; find local restaurants; get directions; and especially when I need a witty, wise-guy meme or GIF to respond to my boss’s email. And, the thing is, I’m not alone. In November 2016, Google was ranked first amongst the most visited multi-platform web properties in the U.S. with 246 million unique visitors and a market share of 63.4 percent among the leading search engine providers, per Statista. It’s even become a verb in modern day society — when someone has a question, the response is, “Google it.”
HVAC contractors have also found Google to be a useful source for leads through strategies like AdWords, pay-per-click advertising, and search engine optimization (SEO). However, that may all change soon.
Last month, I took a trip into Buckeye territory to attend Service Nation Alliance’s Success Day in Dayton, Ohio. There, I had the chance to meet David Squires, president, Online-Access, and co-owner of Port Huron, Michigan-based Vincent’s Heating & Plumbing. Squires was one of three presenters at the event, and, according to him, Google is in the process of changing the game board again when it comes to generating leads.
For the last three years, Google has been experimenting and testing ways to compete against websites like HomeAdvisor and Angie’s List to break into the lead-selling business.
“Google wants to be the gatekeeper of your business,” Squires said. “You have to understand, our industry is now a battleground — we are now the last big pot of gold that the internet has not disrupted. We do billions of dollars in sales, and they don’t get a piece of that. They want it. So, welcome to Google Home Services — when it appears, everything gets pushed down, and at the top, you’ll see HVAC services in your city. Everything above the fold will be Google property. We’ve had it pretty easy with free leads from the internet, but now they’re demanding their piece of flesh.
“The problem with Google Home Services is it creates the illusion of sameness,” he continued. “And you’re invited into it — it’s not something you can choose to be in. You can put in an application, but you have to have good Google reviews. You also have to have a background check on all your people — and they will pay for it. They’re putting some skin in this game.”
While this news may be unsettling for HVAC contractors, it’s the “Google Guarantee” part of this equation that Squires is calling the most disruptive thing that has come to the industry in his lifetime.
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“Simply put, the Google Guarantee states if you choose a contractor through them, and they do something wrong, then Google will pay for the job up to $2,000,” he explained. “So what is going to determine who they choose? Ever heard of the term economic friction? It’s anything besides price that makes the decision.
“We live on economic friction, and what Google has done is removed it with the illusion that we’re all the same,” he continued. “You understand why I’m saying this is a game changer. The president of HomeAdvisor said they did $40 million in TV advertising last year because they’re building a brand. What he’s really saying is, ‘We don’t think we’re going to get anything out of Google anymore.’ So, the only way for those companies to survive is if consumers type in HomeAdvisor or Angie’s List. And he’s right. Google is cutting out the middleman.”
So what does this mean for HVAC contractors? Well, Squires is advising all of his clients to do whatever it takes to get invited to play.
“I have little doubt that the initial ROI [return on investment] will be great for the contractors who get invited,” he said. “However, be aware that, overall, the economics of the model suggest that it will probably gravitate to favor smaller, price-driven companies that take pride in their work but either ignore or personally absorb their full overhead costs. In the long run, be aware that when it no longer becomes economically viable to stay in the program, it will still be taking a lot of potential customers out of the repair market that you will have to find a way to replace.”
Publication date: 11/27/2017