The HVACR Contractor Says . . .

The leadership of Heating, Air-conditioning and Refrigeration Distributors International (HARDI) describes 2019 and 2020 as years that evolved in radically different ways, with little in common between them. But despite the differences in those two years, HVACR contractors affirmed during both years that product availability and price are the most important variables they consider when evaluating the performance of a distributor. 

But what are HVACR contractors needing today, after a tumultuous 2021?

T.J. O’Connor, president, Farmington Consulting Group, provides the answers as he shared the results of HARDI's  3^rd Annual "Voice of the Contractor Survey," during the HARDI annual conference, Dec. 2-4, 2021. 

O'Connor said the survey was aimed at those at contracting businesses who have the most influence on buying decisions. An astounding number of respondents -- 830 -- offered opinions, which O'Connor said is double the number who responded in 2020.

Older Crowd

"Sixty-eight percent of our responses came from owners and executives of these contracting firms. While I realize a large commercial contractor that person isn’t always making the purchasing decision, in many they are. The remaining 32 percent who responded included professionals in administration, purchasing, estimating, sales, marketing and technicians. 

"We are an aging industry," O'Connor exclaimed, as he revealed that 80 percent of the contractor owner survey respondents are 45 and older. Six percent are 20-34; 15 percent are 35-44.

"The reason I show [age information] is because it's vitally important that we change the way we’re doing business. So many of the people who have been buying from us as distributors will change over the next 3-5-10 years. It's important for us, as leaders of our companies, but also as sales people, to customize  how we are servicing customers based on their demographics."

Suburban-based contracting businesses accounted for 49 percent of respondents. Rural and urban-based businesses comprised 25 and 26 percent, respectively.

Market Focus

Fifty-nine precent of contractor respondents perform residential HVAC add-on and replacement services. Twenty-three percent offer light commercial services. Eight percent perform residential new construction, and seven percent offer heavy commercial services.

"Last  year's survey was extremely heavily weighted on the residential side. We made an extra effort this time to get more feedback from commercial contractors, so it’s a bit more representative of your customer base," O'Connor said. And while 67% of the customer base we got feedback from is still either an add-on/replacement contractor or new construction/residential contractor, we did receive quite a bit of feedback from light and heavier commercial contractors."

Service Focus

O'Connor reported that 28 percent of respondents offer HVAC only. Twenty four percent offer  refrigeration, and 23 percent offer plumbing service.

Contractor Revenue

Twenty-two percent of contracting businesses participating in the HARDI survey reported 2021 revenue between $2 million and $4.9 million.

Twenty-one percent reported 2021 revenue of $100,000 to $499,000.

One percent reported revenue of $25 million to $49.9 million; $50 million to $99.9 million; $100 to $499.9 million and $500 million and above.

Preferred Distributor Attributes

 "When a contractor is making a decision on which distributor to buy from, the top attribute they look for is product availability. Where can they find it and how fast can they get it? O'Connor shared. 

Pricing was the second preferred attribute for residential HVAC contractors. For commercial contractors, pricing was the first attribute they want to see from a distributor.

Timely and accurate delivery ranked third for all but rural contractors. Those who are farther out from larger cities ranked timely and accurate delivery as the top distributor attribute they seek, even ahead of inventory and price. Therefore, O'Connor said, "You better have a top-notch delivery service for your rural contractor customers."

Equipment manufacturer brand ranked fourth among respondents.

Counter and will call service ranked fifth. "The smaller the contractor, the more important of a factor counter service is in their purchasing decision."

The sixth preferred distributor attribute is local technical and field service support. 

Combined for the 10th preferred distributor attribute were: e-commerce, online ordering options, website information and availability of a mobile phone app.

11th: training provided.

12th: credit terms and payment flexibility.

13th: dealer benefits and rewards programs.

And although e-commerce ranked 10th, O'Connor said that category is growing in importance. 

"You will, as a distributor, never become Amazon, and you don’t want to become Amazon. This is still a people-to-people business. But you need to be in the game, with significant digital offerings, so that tour customers can go online on a Tuesday night or Sunday morning and identify what they’re looking for, and see the branches’ real-time inventory," O'Connor said.

Brand Preferences

Carrier was the preferred ducted HVAC brand for 16 percent of respondents, followed by Trane (15 percent); Lennox and American Standard (both at 9 percent); Goodman (8 percent); Rheem and York/JCI (7 percent). Preferences for Amana, Daikin, Bryant and Ruud combined for 19 percent.

Preferred ductless HVAC equipment brands were:

Mitsubishi (36 percent); Daikin (21 percent); Fujitsu (9 percent); Carrier (5 percent); LG (4 percent); Gree, Lennox, Samsung and Trane (each at 4 percent); and Bryant (3 percent). 

'Tell Me More'

Contracting businesses depend on distributors for vital information. The survey found these to be the types of information contractors want distributors to regularly provide:

1. Price changes.
2. Stock shortages.
3. New product information.
4. Warranty status updates.
5. Training opportunities.
6. Regulatory changes.
7. Tech tips.
8. Promotions, counter days and other events.