For HVAC Contractors, Home Performance Delivers a Year-Round Blast
September 25, 2012
Last December’s weather was no more extreme than the norm in Tulsa, Oklahoma, where temperatures can swing from above 100°F in summer to below zero in winter. Yet for Air Solutions Heating & Cooling, a 19-employee HVAC contractor serving the Tulsa area since 1997, last December was “the best we’ve ever had,” says founder and owner Keith Hilligoss.
The reason is simple. Motivated by an “incredible incentive” (customer rebates of up to several thousand dollars) from the Public Service Company of Oklahoma (PSO), Air Solutions catapulted to the front of the city’s tiny home performance industry within months. As a result, Hilligoss’s staff are more engaged in their work, projects have grown, clients are referring more business, and annual revenues are on track for an all-time high of $3.2 million this year, up from around $1.8 million in 2010.
“In our market, winter is typically slow, so it’s great to keep our guys busy all year with insulating and air sealing,” says Hilligoss.
Nearly 2,000 miles northeast, in Lansing, Michigan, Comfort First Heating and Cooling has embraced home performance since 2004, six years after Brad Mann started the business with his father. Michigan’s brutal winters have always placed a premium on indoor comfort and energy conservation, but Mann also recognized that diversification would help his business ride out economic ups and downs.
Now, about 80% of Comfort First’s approximately $1 million volume involves the retrofit market. By taking advantage of financing and incentive programs, speaking to homeowners in language they understand, and focusing on the root of home comfort problems, the company has become first and foremost a home performance contractor, and only incidentally an HVAC contractor.
Like many HVAC contractors, Hilligoss and Mann have seen demand for their core services dwindle since new construction collapsed. Unlike their peers, however, they have not only survived but thrived by incorporating home performance into their business. Through continuous evolution, they are converting more prospects to sales; producing larger work scopes; and increasing client satisfaction, loyalty, and referrals.
The Message Is Comfort
In Mann’s case, home performance is woven into nearly every job, where all installers and sales staff have Building Performance Institute (BPI) certifications. Appropriately, comfort is the primary sales message. While the internal target is to reduce air infiltration by 30% on every project, the promise is to solve the customer’s comfort problems—and it’s backed by a 100% guarantee.
“One of this industry’s biggest problems is thinking that everyone really cares about saving the planet,” says Mann. “Most homeowners care more about helping their asthma or being more comfortable.”
How do you get homeowners to speak the language of home performance? Easy: Don’t even try. Too much talk of CFM and R-values will cause customers to shut down, says Mann.
Despite Comfort First’s low-pressure message, its solutions don’t compromise. The company’s average home performance ticket price is in the range of $7,500–8,000—without an HVAC system upgrade. “That’s because I won’t let customers choose to only air seal part of their home,” Mann says. “We explain that we’re a home performance contractor, and it’s important to focus on the entire house.”
Following through on the satisfaction guarantee, Mann and his staff check in with past customers regularly. Time and again, the talk is not of utility bills, but of comfort. “I’ll say, ‘How is your gas bill?’ They’ll say, ‘I don’t know, but I do know that our A/C doesn’t come on until 3 pm, it cools so efficiently now.’”
Opening New Doors
As a relative newcomer to home performance, Hilligoss understands his HVAC peers’ wariness toward the field. He had to shed some skepticism to take the plunge himself. He started Air Solutions Heating & Cooling when he was just 26, and for the next 14 years learned the business one project at a time. ”We were following the same path as all the others, going out and basically not looking beyond heating and air systems,” he says.
In more recent years, even as Hilligoss and his staff learned more about Duct Blasters and blower doors, they considered home performance primarily an East Coast fad that would never catch on among conservative Tulsa homeowners, whose utility bills tend not to be high to begin with.
Hilligoss challenged his own perception last fall when he learned of PSO’s Residential Solutions program, which requires participating contractors to employ at least one individual with a BPI Building Analyst certification in each of its locations. Among the attractive incentives were job completion bonuses, and assistance with training, marketing, and public awareness.
Home performance turned out to be a natural fit for HVAC contractors. Unlike many specialized contractors, “we’re focused on finding ways for homeowners to save money and be more comfortable,” Hilligoss explains. Further, Tulsa’s diverse and allergen-rich environment is ideal for selling efficiency improvements based on comfort and air quality—benefits that he and others say resonate more strongly with homeowners than energy savings.
Almost every call we go on is an opportunity to talk about home performance in one way, shape, or form.
—Brad Mann, Comfort First Heating and Cooling
Hilligoss’s staff quickly embraced home performance, too. Enriched through training and on-the-job learning, they “understand concepts like air leakage, and what’s required to fix it correctly,” he says. “They love it; they say it’s like being a detective,” with each “case” presenting a unique set of clues and challenges.
At Comfort First, Brad Mann says his staff also like the problem-solving nature of home performance. His customers do, too. He speculates that his company’s lead-to-sales conversions are high “because my people are so much more knowledgeable” than most traditional HVAC contractors. “One thing we hear a lot is ‘We went with you because you were the only ones to point out that the HVAC ductwork was inadequate,’” or some other issue not directly related to the reason for the call. “When we’re in somebody’s house, we look at a multitude of things” that could be causing comfort problems.
Leveraging New Marketing Tools
To differing degrees, both companies leverage marketing strategies to spread the word about their companies’ home performance work. At Comfort First, existing customers get cash credits for referring friends and neighbors. Credits range from $10 for referring a simple service call to $90 for major retrofits of $2,000 or more.
Among Air Solutions’ marketing campaigns is fairly aggressive use of social media, including an integrated campaign involving TV commercials, Facebook, YouTube, and Twitter. The company’s Spot That Van contest, for instance, has proven to be “one of the best marketing programs we’ve ever done,” says Hilligoss. Launched through a TV commercial, the campaign invites Tulsa consumers to snap photos of Air Solutions vans they see about town and post them on the company’s Facebook page to win a free lawn chair, and become eligible for a monthly $250 Visa gift card drawing.
“For visibility and engagement, the program can’t be beat,” Hilligoss says. Dozens of photos have been posted on the company’s Facebook page, which has close to 900 “likes.” Moreover, Air Solutions’ bright green lawn chairs are now seen all over the Tulsa market, including at sporting events.
Internally, a staff referral program incentivizes HVAC service technicians to be alert to undiagnosed home performance problems. Should an Air Solutions “comfort consultant” visit the home and make a sale, 2% of the contract value is credited back to the referring technician. “They love it,” says Hilligoss.
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