Thursday, April 24, 2014Labels: marketing, NY Times, selling to high-end homeowners, selling to low-end homeowners, shrinking middle class
This may not come as a surprise to some, but according to a recent front-page story in The New York Times, the middle class is steadily eroding. Because of this, upscale, high-end products and services are thriving, as are the lowest-end of the market, while businesses and products that support the middle are shrinking.
What does this mean for HVAC contractors?
Your business should create a strategy to target the high- and low-end markets separately. As the article says, you can accomplish this by “chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers…You don’t want to be stuck in the middle.”
Let’s break down these two, distinct business strategies.
Selling HVAC to high-end homeowners:
- Emphasize value: Industry regulations continue to push the HVAC industry to focus on high-efficiency models. These premium models have higher SEER and EER ratings and result in lower electricity bills for homeowners. While premium models are often noted for their increased efficiency, the comfort these models provide often goes unsaid.
The concept of “comfort” cannot be ignored or undersold. Make sure your customers know about the benefits that accompany many premium products. For example, high-end air conditioners often come with variable speed fans—so homeowners don’t feel the on/off of the air conditioning or heater.
Two-stage furnaces also provide homeowners with a similar comfort. They offer mild heat and don’t broil as hot as other furnaces. They use two levels of natural gas, making homeowners’ homes more comfortable during the winter season.
A remote sensor is a great accessory to offer high-end homeowners. With the ability to automatically control the temperature in each room in the house, remote sensors provide homeowners with a smooth, flowing temperature throughout the house so they don’t have to suffer from one room being hot while the other is cold. These products pair well with our Honeywell thermostats.
- Provide excellent service: For many high-end customers, exceptional customer service isn’t an added bonus—it’s expected. Let these customers know the commitment you have to providing top-notch service—from product selection, to installation and maintenance.
Selling HVAC to low-end homeowners:
- Focus on competitive prices: Because penny-pinching customers are looking for the best deal, they’re most likely not as concerned with the service accompanying your products or the value of things that come with premium models. That doesn’t mean you shouldn’t still offer great products and excellent service, just that it doesn’t need to be the main thing you promote.
To reach these customers, offer sales and promotions on products and equipment. Penny-pinchers are often “brand agnostic,” meaning they don’t care what brand they get, or where they get it—they are looking for the best deal available.
Another good approach to satisfy penny-pinchers’ bargain hunting is to sell them original equipment manufacturer (OEM) parts for their existing HVAC equipment. For example, our partnership with Neuco, an OEM vendor, gives you access to non-warranty OEM parts. Now, if a customer complains of a non-warranty part you installed for them breaking, you don’t have to worry. Bring the problem to any Comfort Supply location and we will get you a replacement through Neuco.
Let us know how these tactics work for you, and if you have any additional strategies to share.