• The Tax Credit Is Gone: What Now?

    March 1, 2011
    Someone once said that change is the only constant; what motivates consumers to buy today will change tomorrow. Yesterday, tax credits motivated them to buy. Today, consumers' buy motivation is different.

    How did it get to be March? Wasn't it Christmas last week? Life comes at us faster than it ever has before. An article in the Wall Street Journal a few weeks ago estimated the average American today is exposed to more information on a daily basis than an American living in 1900 was exposed to in 10 years. Startling!

    Contractors across the country are saying business for the first two months has been slower than usual. Much of the blame has been placed on December being a great month because consumers were taking advantage of the tax credit.

    Now it's March: we're still waiting for the economy to come back and hoping the government re-instates tax credits for split systems.

    Stop waiting! This IS the economy after it's recovered.

    With the federal government trying to balance the national budget, and states trying to recover their tax short falls, tax credits appear to be a thing of the past.

    Someone once said that change is the only constant; what motivates consumers to buy today will change tomorrow. Yesterday, tax credits motivated them to buy. Today, consumers' buy motivation is different.

    A recent article in The Wall Street Journal stated, "After years of splurging with an eye on their rising assets, that phenomenon known as the wealth effect now cuts the other way, spurring frugality. Of 46 economists responding to a recent Wall Street Journal survey, 43 predicted the new era of thrift will persist."

    A Fortune magazine article called "10 Signs the Consumer is not Dead," stated: "Despite the Great Recession, aggregate U.S. personal income increased from $11.3 trillion in 2006 to a $12.5 trillion seasonally adjusted annual rate in quarter two of 2010."

    Case in point: if you don't think today's consumer has money to spend, tell that to the family of three in Wisconsin who spent $12,000 for tickets to the recent Super Bowl game.

    Bottom Line: Today's consumer is choosing to spend their dollars more carefully. That means we must work harder to educate them about why spending money on our products and services is in his or her best interest.

    So how do we get the attention of consumers? By helping them recognize they have a problem, then showing them the products and services our company has to solve the problem. Yes, we also must create urgency so the consumer will act on the problem now. The purpose of any marketing you do is to get one of your employees face-to-face with a consumer.

    Today's consumer is investing in quality of life rather than luxury items. So focus your marketing on problems that impact the quality of the consumer's life at home — high energy bills, sick kids, hot rooms, dry skin, allergies, a noisy air conditioner interfering with patio time.

    Next, prove that the product or service you offer solves the problem. Indoor air quality products help alleviate allergies and sick kids. High energy bills are reduced with high efficiency equipment, blown insulation, energy audits, attic door covers, and covers for can lights.

    Finally, comes urgency. Tell the customer what to do now to earn a reward. If, for example, the customer calls your company and schedules an energy audit by March 31, he or she receives a free camera inspection of their duct system (regularly a cost of $49.95), to determine if dirt might be causing indoor air quality problems.

    Who do you target with this marketing effort? Answer: existing customers with air conditioning systems that are eight years or older.

    But what if records can't be sorted by equipment age?

    Then do it the old fashioned way. Go through customer files one at a time and compile a list of past customers with equipment that’s eight years or older. Walk neighborhoods placing door hangers. When you successfully complete a job, rent the customer's yard for placement of a company yard sign. The rent payment is a discount on a future service. Knock on neighbors' doors and offer the same rent program. The new economy may force you to conduct marketing in a more cost-effective, old fashioned grass roots method. Combine this with cost-effective, often-free social networking, and you should hit on the strategy for marketing in the new economy.

    Consumers will undoubtedly remain cautious in their spending for the foreseeable future. But they're not as financially crippled as perhaps we've been led to believe. Most consumers do invest in the quality of life they have at home. We should make sure those consumers know our products and services are the best investment to improve their quality of life.

    Vicki LaPlant has been working with HVAC contractors for the past 30 years as a trainer and consultant. She is expert in helping people work better together for greater success. She is a Contracting Business.com editorial advisory board member and can be reached by email at [email protected], or by phone at 903/786-6262.