by Dominick S. Guarino
EDITOR’S NOTE: This month, Contracting Business magazine launches an exclusive Total Comfort series of articles about sales and marketing. The first, by Editorial Advisory Board member Dominick Guarino, sets the stage for contractors to consider how to differentiate themeselves in the marketplace. Understanding the benefits of Total Comfort is so important that we’ve included a special pull-out poster in this month’s issue (page 48) to help you illustrate the Total Comfort concept. Sometimes, the most difficult task for an HVAC contractor is to explain the benefits of a complete system, not just the boxes and the features. Why not order a supply of these posters for your sales staff to use? But, be prepared: your customers may just ask you to deliver on your Total Comfort promise. Contracting Business will be there for you every month with a new sales or marketing article providing the information you need to help your organization become a Total Comfort business — and reap the profits that come with it.
Stepping Back to Look Ahead
To better understand what is happening today in the residential HVAC industry and get an idea of what will be happening in the near term, we must step back, about 45 years or so.
In the late 1950s, air conditioning was just coming of age, especially in upper-middle class homes. New types of air cleaners and humidification devices were springing up everywhere. The HVAC industry was doing a fairly good job of selling comfort, considering the technical limitations. Even looking back at advertising in both consumer and trade media, it’s clear that we were in business to provide comfort.
Better duct systems were being designed and installed for improved air distribution to make homes more comfortable. Supply registers were moved to outside walls to provide a perimeter heat curtain, reducing drafts and cold spots in winter. We were definitely on the comfort track.
During the late 50s, an attempt was made to put together a national comfort program called Silver Shield, where dealers provided a comfort guarantee which spelled out precise comfort standards. Unfortunately, not only did we not have the technology to deliver systems that met the stringent standards, consumers simply weren’t interested at the time. Most systems were installed in new homes, and details were left to builders whose main objectives were to keep costs as low as possible.
Efficiency vs. Comfort?
Perhaps the Silver Shield program was just 50 years ahead of its time. But the point is the industry’s main focus was improving peoples’ comfort. This trend continued through the early 1970s until the energy crisis brought its impact to our industry just as it did to many others.
Suddenly, flue dampers were a popular option, often standard, especially on upscale equipment. Mechanical setback thermostats were gaining popularity fast. All the signals were there: manufacturers were gearing up for the Energy Efficiency Revolution.
The race for manufacturers to produce the most efficient equipment, and for contractors to differentiate themselves by selling and teaching the merits of high efficiency was on. We began talking about Return on Investment and Payback Periods. These terms along wtih Energy Audits were new sales tools — and they’re still very important.
Unfortunately, as an industry we began losing sight of the very thing we are in the business of providing: COMFORT. Little by little, we were trading equipment efficiency for comfort. To increase furnace efficiencies, blowers were downsized and brought on sooner and kept running longer. Many of us selling in the 80s and 90s began saying things like: “Sure it’s a little cooler, but you’ll get used to it — and look at the money you’re saving on energy costs.”
Top contractors differentiated themselves by installing ultra-high efficiency systems. They provided the financing and payback information that allowed them to rise above the price wars and make a decent profit. Then, we got the rug pulled out from under us!
Since 1992, efficiency has no longer been an option — it was federally mandated. Again, in 2006, new efficiency standards for equipment will create less efficiency differentiation for HVAC contractors. For years, contractor profits have eroded. Even the advent of contractor groups focused on providing superior service at premium prices haven’t yet produced any noticeable changes in this industry.
So how do we move back into the Profit Zone? By keeping customers in the Comfort Zone! One of the keys to surviving and prospering is being flexible and willing to change as your customers needs change.
However, before you change the way your company operates, markets and sells its products and services, it’s important to understand the present market conditions, and to try to predict future conditions. Several changes have taken place in the last 20 years that greatly affect how we must do business with today’s customer, and how we will do business with tomorrow’s customer.
So what has changed so drastically about consumers that you need to rethink how to do business with them?
s They have less time
s They want more value
s There are more working couples
s They’re more educated
s They’re more demanding
s They’re less patient
Opportunities Abound for Those Who Serve Their Customers
To gain a better understanding of what customers want from their comfort systems, Contracting Business magazine recently commissioned a survey of over 10,000 consumers. Here are a few highlights:
u 43% of respondents said that they are only somewhat or not at all satisfied with their comfort systems
u Among dissatisfied consumers who have purchased a new system in the past 12 months, 78% said temperature control was the root of their complaint
u Nearly 6 out of 10 respondents feel some or all of the areas (temperature control, air purification, humidity control) need improvement
As you can see, opportunities abound. We, as consumers, want better comfort and control over our environment. The industry falls far short of the mark of meeting or exceeding customerm expectations. This is why there’s a growing belief among progressive manufacturers and contractors that providing comfort, as opposed to selling equipment, will be the major focus of the 21st Century.
The survey also shows that consumers are becoming more knowledgeable, taking the time to research important purchases. They want to be informed. This is an opportunity for those contractors trying to differentitate themselves.
Up to now, many of us have focused on efficiency, teaching about AFUEs and SEERS and COPs. Even these numbers don’t mean a thing if the air distribution system isn’t designed and installed correctly — and most are not!
A 12 SEER condensing section can easily operate at 6 or 8 SEER if the ducts are leaky and/or the system isn’t moving the right amount of air to the right places.
We like to call this INVENTORY! Now we can also educate customers about comfort, control, indoor air quality, and creating or maintaining an ideal indoor environment. That’s where you can truly outshine your competitors who are just now getting comfortable with selling efficiency!
Let’s face it: It’s not easy being different from your competition. It’s human nature to want a magic formula that lets you plug numbers into a computer estimating form, and not have to think too hard while in the customer’s home. Yet, this is where a salesperson must be in tune, paying attention to every word, every detail. There’s a small window of opportunity in which you can ask all the questions, see, hear, and feel — use all your senses to understand the home, the comfort system, and most importantly, the customer.
You Need All the Right Tools
With the development of variable speed equipment and zoning systems, we can truly provide both optimum comfort and efficiency. Houses are being built tighter, and progressive contractors and builders are installing better ventilation and other systems to improve comfort and indoor air quality.
The tools and the equipment — are all there. The challenge today is not just providing high quality work at a fair price, which good contractors are already doing, but also understanding customer needs and solving their comfort problems.
One mindset to develop is that we’re in the business of providing solutions, not selling boxes. The equipment is just one part of the equation. We can’t solve existing problems by just replacing equipment. If comfort problems could be solved by just replacing equipment, anybody could do it.The beauty is not everyone wants to, or has the ability or resources to truly solve problems.
If you think about it, equipment efficiency isn’t much of a differentiator. Any contractor can buy and sell high efficiency boxes. If the only thing you have to offer is equipment efficiency you have just put yourself on equal ground with everyone out there — fly-by-nights included.
Sure, you’ve been around longer, and have 24/7 service, and top-notch installers, but that’s what the other five guys bidding on the job said.
Anyone can say they’re capable of doing the job right. Giving your customers measured results will set you apart. Providing names of satisfied customers will help your credibility immensely.
The only tangible things you have to sell are yourself, and your ability to understand and solve the customers’ comfort problems. Showing them pretty charts on future energy savings just isn’t enough anymore. Customers need to understand their comfort system extends beyond the equipment. They need to be taught about the importance of a well-designed, properly installed distribution system, and all the comfort solutions available to them.
Today we have tools to measure total system performance that are more accurate and easier to use than ever. These tools include flow hoods, anemometers, static pressure gauges and infrared thermometers.These tools can be just as valuable in the hands of your salespeople as they are to your technicians. Training your sales people to use them to evaluate your customers’ systems can be one of the most effective sales approaches you’ll ever use.
If you’re already a total comfort contractor, congratulations on your higher revenues and profits. If not, begin by contacting your wholesalers, manufacturers, and other industry partners for the tools and training to equip your salespeople with the skills they need to sell total comfort. n
Dominick Guarino is chairman and CEO
of National Comfort Institute, a national
training, certification, and membership organization. NCI offers traning including air
diagnostics, balancing, sales, marketing,
carbon monoxide, and combustion diagnostics. He can be reached at 800/633-7058, or at [email protected]. For more
details on training topics and schedules, visit www.nationalinstitute.com.