Why HVAC market companies should focus on customer education
HVAC market companies are constantly expanding their scope of business, and many contractors offer some degree of service work to consumers and/or businesses needing your expertise.
If you already offer service work — awesome. If not, consider that service work is both profitable and easy to implement. Here are some ways your HVAC sales company can boost revenues with minimal efforts through an educational approach.
An educated customer is the best customer. Knowledgeable consumers seek out improvements that benefit their lifestyles or homes. This could mean better air quality, a more efficient dryer vent or even cleaner air ducts. The truth is your customers have wants, needs and expectations and you have products and services for sale. Your goal must be to bridge the gap between the customer’s requests with the benefits that your products/services can provide to meet or exceed their expectations.
Here is a formula that helps identify the value of a client called customer lifetime value. This value is not based on the dollar amount of a service job completed, but encompasses the yearly amount spent by a customer along with the retention rate of that customer over time. The CLV formula encourages companies to shift focus from daily or quarterly profits to the long-term health of customer relationships.
Let’s look at two basic examples of how CLV is applied to achieve better long-term sales through improved retention rates. In the examples, two types of sales mentalities are explored:
- A turn-and-burn HVAC sales company that does the job and leaves without any upsell or upgrades offered.
- An education-focused HVAC construction firm that takes the time to walk customers through the process and explain various ways to improve their homes beyond the basic service call.
Based on the examples above, the education-oriented company is able to develop trust with their customers and provide add-on sales — products or services — to better the job. Their technicians explain processes, quantifies results and proves real skilled work was completed to meet and exceed the customers’ initial requests. Because of this rapport, the educational service company is likely to retain customers longer, giving them a 90 percent retention rate over the turn-and-burn company, which may only keep 70 percent of their customers each year.
Yes, walking customers through your processes does take extra time. So how does that extra time spent at each home actually affect the company’s overall success?
Many business owners would look at the daily sales to determine success without identifying the key metrics needed for long-term success. Notice that the turn-and-burn company makes more money per day in the first year than the educational company because of the number of jobs completed each day.
However, by simply increasing your customer retention rate by 20 percent, the value of that customer — or your entire business — will more than double. Remember, it’s always easier to keep a customer than to get a new customer. This is especially true for regional businesses that operate within a limited radius. The CLV formula proves that retention rate is the key to your long-term profitability and is gained by slowing down, educating customers and providing solutions to enhance each job beyond the basic service call.
Educated customers are happy customers and the proper approach eliminates customers feeling like they were taken advantage of. Educated buying decisions accomplish four objectives:
1. Reduce client complaints.
2. Minimize cancellations and returns.
3. Boost customer satisfaction.
4. Create customer retention and referrals.
If you know educated customers are the best customers, then how do businesses leverage free educational resources to engage new business? This can be accomplished through various types of earned media — aka “free press” — both locally and nationally. It’s equally important to understand the best way to introduce a value proposition to your HVAC market so potential clients are more willing to call your sheet metal works company for the best service available.
Start by taking advantage of online forums, communities, and current events that take place every day. Sign up for Google Alerts, which is a free resource to have qualified leads and pertinent stories sent to your email account daily. Participate in Yahoo Answers, post blogs on your site with relevant information, and even reach out to local media outlets (television, newspapers, magazines, etc.) when a current event is related to your industry knowledge.
For example, if a dryer fire was reported on the news, send a press release about fire prevention and the benefits of a clean dryer vent to the editor. Or if mold was found in a building, reach out to the media source and provide informative information on the value behind green HVAC, improved indoor air quality and the ways consumers can be more protect their homes.
In all of your marketing efforts, keep in mind it’s best to use words such as “you,” not “I” or “we.”
Compare these two marketing messages that are relatively similar yet are presented in a much different manner.
“Our products are the best for home ventilation. Come see why we’ve been so successful with our venting solutions today!”
This statement can be re-engineered to capture the prospect’s awareness: “Learn how you can improve your family’s home ventilation through better efficiency and improved indoor air quality by visiting XYZ Duct Guys today!”
As part of your educational marketing efforts, try and shift from selling “features” to advertising “benefits.” A “feature” is what something is and a benefit is what something does. People will always react stronger to benefits over features. Is it better to advertise a dryer vent transition duct that’s “UL-2158A Class 0 rated” or a transition duct that ensures safe and efficient drying and helps decrease overall cycle times?
Regardless of your marketing efforts, always create advertising campaigns that deliver the same general message at least three times to maximize your return on investment. In doing so, the customer will first see the ad and generate some degree of curiosity. The second piece will create brand and/or product recognition, and the third ad provides sufficient information to generate a purchasing decision.
Educate on the job
Once you have booked a service job, there are a few ways to continue driving an educational message to the customer that can easily result in increased sales. Contrary to what some believe, don’t close early and close often. The more you push a product or service sale on customers, the more they will push back. When was the last time you bought something that was forced on you?
Pushing for sales hurts the relationship with the customer and the end goal should be to increase retention rate rather than eliminate the chance of a future sale.
Consumers that contact your business for service work are not do-it-yourself people, which is why you got the job. The value proposition you provide is being an HVAC market professional. Don’t hesitate to showcase your expertise through certifications, qualifications, awards and even customer testimonials. Demonstrate that you know how to solve the problem.
Good sales staffers are great listeners. Before doing traditional HVAC sales diagnostic tests, discuss with the customers what their needs and wants are from the service call. Why did they call you? What problems did they experience? How did they find out? Use open-ended questions that can be answered by you — the expert. From there, educate accordingly and provide value-added solutions to get the job done.
Tangible sales will always trump verbal sales attempts when working directly with clients. Though it may sound elementary, it’s always easier to say “No thanks” to a product that’s not physically there. In other words, introduce saleable items directly to customers so they can see, feel, and demonstrate how your solution can further enhance the services provided.
Companies can leverage a mix of social media efforts, regular contact and referral programs to increase retention rates. The social media landscape is always evolving, so here’s a basic view on how the same message can be re-engineered on multiple free marketing platforms.
Facebook: “I like cleaning air ducts.”
Google Plus: “I’m looking for an air duct cleaner.”
Insert hashtags before words and phrases to make them easier to find: #ductcleaningservice #ductcleaning
YouTube. “Watch me clean this air duct.”
Twitter: Short messages with hashtags work best: “I’m cleaning #airducts”
LinkedIn: My skills include cleaning air ducts
Instagram: Use with lots of photos. “Look at how dirty this #airduct is #ductcleaning #cleanair #IAQ”
Each of the social media outlets has the ability to reach your clientele. Knowing your market will help dictate what avenues to take, but using all channels will increase your likelihood to maximize brand recognition and boost retention. Even blogging should be done regularly, which keeps information flowing along with boosting your website’s organic search engine rankings.
Referral programs and customer-based contests can be powerful tools to increase both new business and client retention. Consider creating unique contests that make customers the winner. For example, have your social media followers post pictures of their dirty air ducts or blocked dryer vent terminations and offer a free cleaning to the dirtiest system and a small percentage off for all other participants. One customer will win, yet you’ll know exactly who needs to have service done immediately. When possible, make the contest relevant to current events such as in October, which is fire prevention month.
Spread the word
Lastly, high sales-conversion rates are inevitable through positive word-of-mouth advertising. Try and reward your best advocates by offering some discount on future services. This concept is independent of annual service contracts, but is equally important. Annual service packages allow you to lock in a continued revenue stream by only giving up a small margin. For example, “Buy now and receive money off your future service call.”
Overall, your company’s sales and marketing efforts should always keep in mind the importance of retaining customers. By increasing your retention rate by just 20 percent, the revenue from that customer (and your business) will more than double. Shifting from short-term sales to long-term customer satisfaction plays a critical role in the business’s success.
Educating consumers is vitally important. Try and avoid using “I” and “We” in your advertising to engage consumers before getting the job. Even when work is being performed, continue to involve clients in the process so they better understand the value you offer. Educated customers are more likely to come back in the future while also spreading invaluable positive word-of-mouth advertising.
Keeping a customer will always be easier than getting a customer, so do everything you can to improve that relationship, develop trust, and enjoy the growing revenue stream as your business builds loyalty and satisfaction around your region. Good luck, start educating and keep selling.