I just returned from the ACCA Convention last week and after getting 50 inches of snow in southern Pennsylvania last month, the trip to Tampa was a welcome one. The dose of good weather was reinvigorating, but spending time with some of the country’s top contractors was even more so. The Warm Thoughts team and I spent three days digging deep with these industry leaders, discussing their marketing plans, consulting with them on how to grow their business this year and listening to their strategies for 2010. For contractors who couldn’t make it to the ACCA show, I’m going to share some of the latest trends in the industry, which I’ll do in the next few issues. In this issue, I’ll focus on “The Next Big Thing.”
Home performance – “The Next Big Thing”
In this sluggish economy, which has many homeowners hesitant to move forward with big home improvement projects, the home performance industry has become a godsend to many HVAC contractors for growing their businesses and making up for lost revenue. HVAC contractors are taking advantage of the federal incentives, along with very healthy rebates in certain states.
There are some common threads to success in this arena that contractors spoke to me about at the convention.
What they are doing to succeed:
They figure out the model for success first. Home performance can be an exciting opportunity for an HVAC contractor. But before you jump in headfirst, you have to figure out exactly what your business model will be. Are you going to subcontract certain work out and just oversee the project? Are you going to conduct the energy audit and pass the work off elsewhere? Or are you going to handle the whole project from soup to nuts? It’s critical that you don’t just jump in without having figured out a model that is repeatable and maximizes your profitability.
In addition, be sure that you plan for the handling of the administrative aspects. The paperwork for state and federal incentives can be cumbersome if you don’t have an infrastructure for handling it--and you can’t get paid if you can’t get your customers approved. So it’s key to develop a process on the back end.
They have shifted the company culture. The contractors who have been most successful at creating a whole new revenue stream in home performance are those who have completely aligned their companies behind it. They’ve gotten their salespeople and representatives BPI certified to perform home energy audits. Their internal staff is well versed in the paperwork that goes along with these projects. Their techs can speak easily about the rebates and incentives while in the home and can sell the benefits of an audit and of home performance projects. And most importantly, the companies that are succeeding are not looking at home performance as a small short-term means of boosting revenue, but as a long-term stream of business, which is a core part of what the contractor delivers for their customers.
They market heavily to corner the market. It’s still early in the home performance game. Most contractors aren’t certified, so the ones that are have a great advantage. But the advantage won’t last long. For example, there are 130 certified companies in New Jersey right now. By the end of 2011, that number is expected to triple.
The opportunity here is that with a concentrated focus, HVAC contractors can corner their market. By marketing to their existing customer base, and broadly to the market at large, you can establish yourself as your customers’ energy conservation partner. Use your customer newsletters and other customer communications to farm your existing customer base. Leverage the power of the Internet and your company website to promote the rebates available and the services you offer. Train your sales team and technicians to promote home performance every time they are pitching a service agreement. The bottom line is that in the next 6-12 months, the window is open to create a strong footprint for your company as THE home performance provider in your market.
And finally, the HVAC contractors who have bought into home performance have done it because this “green movement” is not going anywhere. Stan Johnson, president of Stan’s Heating and A/C in Austin, Texas, put it best in his ACCA presentation. He said that “contractors should not wait for the legislation to force you to get into home performance. Get out ahead of it.” Stan is right and a fair number of contractors are following suit. I hope you’ll be one of them.
In the next issue, I’ll share the latest trends in online advertising and where many contractors are spending their marketing dollars this year.
Blaine Fox, Vice President of Warm Thoughts Communications, is a recognized expert on the residential mechanical services industry. In a world where every marketing dollar must be deployed to maximum effect, HVAC contractors are turning to market research to inform their decisions.The Warm Thoughts team of experts is helping contractors unlock the research and fine-tune marketing efforts. Blaine is a sought-after speaker, and presented at Comfortech 2009. He is also a frequent contributor to HVAC industry trade publications. If you have any questions about how to take advantage of market research for your service area, please email him at [email protected]