In 2001, at Peachtree Heating and Air Conditioning in Atlanta, our sales for hvac accessories (i.e., humidifiers, air cleaners and air purifiers, whole-house dehumidification systems, programmable digital thermostats, and CO detectors) represented about 20% of our total retail installation revenue.
Expressed in 2006 dollars, our retail installation revenue for 2001 was $13,921,000, which included $2,781,000 in accessories. On average, we installed two accessories with each replacement job we sold. If I still operated that business, given today's heightened consumer awareness and concerns regarding IAQ issues, I estimate our accessory product sales would represent around 30% of our total retail installation revenues.
Why Focus on HVAC Accessories?
As I have written before, our company culture at Peachtree was "WIN! (Customer) + WIN! (Coworker) = WIN! (Company)." In order for our customers to be "winners," we assumed the responsibility of informing and educating them regarding the many benefits of the accessories we offered. The primary customer benefits were:
- • Improved indoor air quality.
- Increased indoor comfort.
- Lower heating and cooling energy bills.
- Increased protection of the home and its furnishings.
- Improved occupant safety.
- Longer hvac equipment life.
- Improved hvac equipment reliability.
Our coworkers also became "winners" when we sold, installed, and serviced accessories. They benefited with:
- Commissions and spiffs for selling accessories,
- More work available year-round for service and installation technicians,
- Enhanced career opportunities by working for a growing and profitable company,
- Increased service-agreements sales, and
- Increased service-agreement renewal rates.
Naturally, our company was a "winner" through the sale of accessories at healthy profit margins. Accessory sales also greatly benefited our company by adding consumer value to our service agreements, which enabled us to sell more service agreements. In order to perform properly, all of the accessories we sold required periodic maintenance. This certainly helped us to achieve a high (>85%) renewal rate for our service agreements.
Service technicians sold about one third of our accessories, and our comfort advisers (retail sales personnel) sold the balance in the course of their selling of replacement hvac jobs.
We trained service technicians to make note of the need for high-efficiency air cleaners, air purifiers, humidifiers, CO detectors, programmable thermostats, etc., while performing maintenance or repair work. At the conclusion of maintenance or repair work, technicians would use manufacturers' consumer brochures to present the accessories' features and benefits to customers. They would then invite and answer questions, present the installed price, and ask for the order.
If the technician didn't make the sale, an inside-sales support person would make a follow-up call when the service invoice came into the office. We paid service technicians "Bonus Bucks" (spiffs) for accessories they sold. "Bonus Bucks" were divided equally between technicians and inside-sales support personnel when sales were made with follow-up phone calls.
Our comfort advisers sold an average of two accessories with each replacement hvac job they sold. We used a unique process to accomplish this.
Early in my career as a contractor, I did a lot of in-home retail hvac selling. At first — after going through the appropriate steps when on a sales call — I would prepare my proposal to include not only the major hvac equipment, but also the accessories I felt the customer should have. I soon determined this process hampered my sales-closure rate for two primary reasons.
First, selling yourself, your company, the hvac products, your company's installation quality control, and its services after the sale, required the investment of substantial time and attention on the part of the customer. Including the features and benefits the accessories afforded in a proposal simply added to the time, confusion, and decisions required of the customer. Information overload!
Secondly, adding the costs of the accessories into the quoted price of the replacement job elevated the price and further reduced the sales closure rate. I learned also that when the sale was not closed at the time of the initial sales call, I often lost the sale to a lower-priced competitor who had not complicated the buying decision for the customer or elevated the price by including the accessories in his price.
Many years ago, I developed a process that worked well for me while I was still selling retail hvac, and I continued the process with my comfort advisers down through the years. Here's how it works:
- The comfort adviser does not bring accessories into the hvac replacement presentation (unless asked to do so by the customer) until after he closes the sale for the hvac replacement job.
- After the close and completion of all paperwork, the comfort adviser presents the accessories he recommends to be installed in conjunction with the replacement hvac job.
- Following a thorough features-and-consumer-benefits presentation for each recommended accessory — and after answering any questions from the customer— the comfort adviser presents an HVAC System Enhancements form. (To see an example of the form, go to the Resource Center).
- The comfort adviser then explains the substantial savings available to the customer provided the accessories are installed in conjunction with the hvac replacement job. (The actual savings versus having these accessories added to the job at a later date ranged from $50 up to $200 per item.)
- Comfort advisers then require the customer to initial either "Accept" or "Decline" for each accessory item. The comfort adviser explains to the customer that this is required and will be retained in the customers file to avoid any possible misunderstanding regarding accessory prices should the customer choose to have accessories added after the replacement job is completed.
This process is one that I learned about and "borrowed" from automotive rental agencies. Whenever I flew somewhere and rented a car, the agent always offered extra cost items such as additional insurance coverage or refueling options. Each option required me to initial my acceptance or non-acceptance.
Using this process to help sell accessories lends creditability to the actual savings the customer can realize by having the accessories installed with the replacement job. The process also helps them to more clearly understand the benefits of the accessories, enabling them to make better-informed buying decisions. This truly is a "WIN!" (Customer) + "WIN!" (Coworker) = "WIN!" (Company) process.
Jackie Rainwater is a 46-year veteran and former owner of Peachtree Heating and Air-Conditioning in Atlanta. He built his businesses on service agreements.