Mine Your Business

Most residential contractors are terrible at maintaining customer relationships. You know it’s true. 

Even though it’s fundamental to business success, too many of us fall into the trap of transactional relationships: Get the job. Do the work. Get paid. Move on.

That's not a path to profits — it’s a formula for being overworked, underpaid, and always stressed. You’re forced to work twice as hard to attract new customers while overlooking your existing loyal clients.

A better solution is to market your HVAC business to the kind of profitable people you can have lasting relationships with: existing customers who have already seen value in the services you provide. 

In this article, I’ll explain why so many contractors struggle with marketing, the opportunities you’re missing, the mistakes you’re probably making, and how to fix them. I’ll also explore some of the technologies that can help you grow your business without wearing yourself out. 

Why So Many HVAC Contractors Struggle With Marketing

The fact that even the best home service contractors have a tough time marketing their businesses isn’t a surprise. Many contractors are more concerned with their technical skills and equipment expertise than their ability to sell air conditioners or furnaces. 

And for a lot of established companies, word-of-mouth — inexpensive and trusted — was all the marketing they needed. Plus, creating and executing a marketing plan takes time, energy, and knowledge that many contractors just don’t have. Then there’s the lasting sting of previous marketing campaigns that were too expensive or didn’t deliver. 

The Untapped Potential of Marketing to Existing Customers

With so many contractors struggling to market to new customers, it shouldn’t surprise you that outreach to prior customers is an afterthought, if it happens at all. By some estimates, 80% of service contractors never contact customers again after a service or sale. And I understand why. Everyone is (hopefully) busy. But people with whom you have an existing relationship are far easier — and cheaper — to turn into new business. They already like you and have trusted you to service their equipment. 

That’s a message Kirk King, the CEO of ContractorHalo, a customer relationship management service aimed at HVAC businesses, stresses to his clients. King says it costs about $15 a year to keep an existing customer. Compare that with the $300 to $600 it takes to secure a new customer. And only around 23% of those new customers will come back to your company when they need service in the future.

It pays to focus on existing customers. King says just a 5% increase in your company’s customer retention rates could boost profits 25% to 95%. 

“It’s a no-brainer,” he told me. 

Common Mistakes in HVAC Marketing (How Many Do You Make?)

From sticking with an advertising platform long after most of your customers have moved on (printed yellow pages, anyone?) to forgetting to follow up, it’s easy to make the wrong decisions around promoting your business. And every one can cost you money. 

Here are some marketing mistakes I often see.

1. Positioning your business as only fixing problems. It’s great to be the go-to contractor when a furnace breaks, but successful contractors want customers to know they also offer services that prevent breakdowns and enhance comfort. Maintenance work and services like whole-house filtration not only boost profits; they mark your business as one that can make customers’ lives better in many ways.

2. Relying too much on one marketing tactic. Maybe you’ve had success with Facebook ads, or postcards have worked well for you. And for the last few years, that’s all you’ve used. I’m not saying you should drop them, but try testing them against other targeted tactics such as neighborhood flyers or Google search ads.

3. Using coupons to bring in business. Coupons work. They can get your phone ringing and boost website traffic, especially in slow times. But in most cases, they only attract price-conscious shoppers — the customers you don’t want. They’re the least loyal and hardest to please. Coupons are not a long-term marketing strategy.

4. Not tracking your marketing efforts. Is your advertising working, or do you just think it is? The era of operating off hunches is over (and it was never a good idea). With the right software, tracking advertising performance has never been easier. You can find out how and where people are clicking on your ads, visiting your website and converting into sales. 

According to Lori Smith, director of Online Access’ “More” marketing program, the typical contractor makes 80% of their revenue from just 20% of their service area. So, focus your efforts on the neighborhoods where your sales are strongest.

And you know which ZIP codes bring in the majority of your revenue, right?

How HVAC Contractors Can Improve Their Marketing to Existing Customers

When it comes to boosting your marketing efforts for existing customers, it’s easier than you think. Here are a few suggestions.

• Diversify your products and services. Just because you’ve always been a residential HVAC company doesn’t mean you can’t offer related (and profitable) services. What about adding plumbing or electrical work (both are natural fits for HVAC contractors)? Or duct cleaning? Frame it as one of several indoor air quality services you offer, such as installing air purifiers, germ-killing ultraviolet lights, or high-end filtration systems.

Other add-ons include energy audits and home weatherization, generator, or water heater installation, drain cleaning, radiant floor heating, and zoning. Offering complementary products and services helps ensure that customers see you as more than just someone to call when equipment breaks down.

Don’t want to risk investing in the staff or equipment to offer all those services? Partner with a contractor who does. It could mean more money for both of you.

• Use email and text marketing (the right way). Emails and texts are a great way to remind customers it’s time to change a filter, schedule a tuneup, or gently inquire if they have any issues that need addressing. They also work well for sending out educational articles (content that isn’t directly trying to sell anything) that position your business as a comfort expert. 

But don’t hammer your customers with sales pitches and content. Sending too many emails and text messages is a sure way to end up blocked and reported as a spam sender. And if that happens too many times, you could find your messages routed to junk folders without your customers even knowing you sent them. There’s a balance between sending messages so infrequently that customers forget who you are and so often that they wish they could. Fortunately, there are customer relationship management software programs that can help you strike the right balance.

Remember to ensure you have recent opt-in permission — generally within the last two years — for email and text marketing. And make it easy for customers to remove themselves from your email and text lists if they’re no longer interested.

• Create a loyalty program for your best customers. If customers see value in what you offer, they’re more likely to use your company in the future. And this is where carefully distributed coupons can demonstrate that value. Right after completing an HVAC system installation, send homeowners a “Welcome to the Service Club” packet thanking them for their business. Include discounts on future maintenance visits and optional services. Remind them that you offer packages to ensure their HVAC system offers years of trouble-free operation.

• Use social media and encourage online reviews. Many homeowners use platforms such as Facebook to find dependable service contractors. They’re constantly asking their friends and neighbors for referrals. Encourage satisfied customers to recommend your company on social media by offering a gift card, extra discounts, or a small referral fee. You’ll quickly recoup the cost in new business. And encourage your customers to post positive reviews on sites such as Yelp, Trustpilot, Google, and Facebook. 
• Get personal. For longtime or high-value customers, consider sending out a personal note — handwritten even — or phone call from the owner to thank them for their loyalty. It’s also an ideal time to ask them if there’s anything (products or services) they need. 

Why You Should Use CRM Software for Better Marketing

Earlier, I mentioned that CRM software could help you strike the right balance in customer outreach. A CRM program helps you manage, organize, and analyze your customer data so you can grow your business. It can track interactions, manage leads, and even run a marketing campaign. 

Using a CRM program, you won’t have to worry about forgetting to keep in touch with prospects who are ready to buy. The CRM program can automatically send out targeted customer reminders. It can help you make more accurate revenue forecasts and improve customer service. By inputting stats on your customers, it can reveal insights that Smith says all contractors must have if they want to succeed. These include:

• How many active customers you have;
• How long your average client has been a customer;
• What your longest customer relationship is. And with whom;
• How many customers have only used your services once;
• What the size of your average ticket is; and
• How many of your jobs are only repairs or tune-ups.

I hope this article helps you understand the importance of marketing to existing customers. They’re an underused resource that can be a steady source of work and profits for years to come. And it only takes a little effort to get started. A CRM can make it even easier. Look at your database and see if there are any customers from the last year or two whom you can contact. Then get to work on a seasonal service reminder, follow-up email, or setting up a referral program.

You never know how much money you’re missing.