Mark Bulanda, president of White Rodgers, flew into Cleveland on an unusually warm January day to meet with Publisher Terry Tanker. They discussed the economic outlook for 2007, potential growth areas for contractors, IAQ, and strategies that will help contractors in the coming years.

1. Was White Rodgers' business up in 2006?

Sales were up in 2006.

2. What are you forecasting for 2007?

We forecast an increase, but the mild weather will certainly impact the year.

3. What is your view of the economic outlook for 2007?

The economy has slowed, but, as an industry, we need to react in the near term and be able to adapt to market changes. The replacement market could be strong if we get some weather extremes.

4. What reports, leading indicators, or statistics do you rely on to forecast your business?

We're always looking closely at interest rates, composite leading indicators, new housing starts, consumer credit and savings rates, ARI and GAMA statistics and, in the short term, weather and climate forecasts from NOAA.

5. What is your favorite method to relieve stress?

I have five kids, so I'm almost always getting lost in their soccer games and other events. I participated in my first triathlon just this past year. Training for that during my lunch really helps.

6. What is the best idea you've implemented in the last six months?

We've really expanded our efforts to go out and get feedback from our customers, then use that data to help drive product development.

7. White Rodgers has many products. Which one is your favorite and why?

I like all of them, but our thermostats are fun because that's what the end user sees.

8. The White Rodgers Web site section for contractors is very comprehensive. How did it get to this point?

We continually improve the site based on feedback and suggestions from our customers in the OEM, distribution, and contractor channel. Our goal is to build a place that really meets our customers' needs.

9. You've held several titles in marketing throughout your career. What type of marketing do contractors respond to best? 

Contractors look to companies like Emerson Climate Technologies for technical or service training. I think they also appreciate some of Emerson's alliances with groups like ACCA, and publications like HVACR Business, as they often result in materials they can use to improve their business skills.

10. Contractors need the ability to market to the consumer as a fundamental of their business model. How would you rate their ability as a whole?

Most know there is a lot of work to be done in this area.

11. What can they do to become better?

It is common for manufacturers to segment their market and offer solutions that fit the specific needs of each segment. Contractors can do the same to make sure they're taking advantage of opportunities as they come up. Some other potential areas for growth include knowing how to sell certain products, when to sell them, and to whom. All too often it's not price, but quality of service they need to sell and market to the client.

12. How far have they come with marketing their capability over the past three years?

Contractors have been extremely busy the past three years, especially last year due to the 13 SEER transition, so it appears they haven't had a lot of time to spend working on business growth strategies. 2007 may slow down for them, and they can concentrate on this area. Larger contractors have done better simply because of manpower.

13. What do they need to do over the next three years?

I think it is important for the entire industry to be able to upsell the higher-end 20systems. This will help contractors to increase their profitability per job and overall. Improving margins through higher-end equipment will help them invest in people and other areas of their operation.

14. How can they improve?

Focus their employees in areas they have an interest in and decide what markets they really want to serve. It's really about developing a niche and marketing to that niche, versus trying to do it all and stretching themselves too thin.

15. What has been the key challenge for contractors looking to upsell their customers on high-end hvac systems?

The complexity of some past high-end systems generated a lot of callbacks, making it difficult for contractors to profit. Also, there's simply a lack of qualified installers. NATE certification is very important and a benchmark for determining which installers are qualified.

16. Where is the growth potential for the residential market?

High-end systems and IAQ products hold a lot of growth potential.

17. Where is the growth potential for the commercial market?

Energy-saving equipment for retail or service space will be in demand.

18. What role will Indoor Air Quality play in future growth?

For those contactors that engage this area, the potential is significant, especially in new construction. Retrofit also has huge potential.

19. Is future growth also tied to how well a contractor can build a strong service-agreement client base?

Yes. Service-agreement work helps balance the weather-related swings in the business.

20. What new products will White Rodgers launch this year?

Our unitary controller, along with the Copeland Scroll UltraTech compressor, help to make up the Emerson Climate Technologies' UltraTech communicating system, and we're very excited about that. We'll also be launching several upgrades to our Blue touch-screen thermostat line.