Why your Competition in the HVAC Industry Doesn’t Really Matter

If you’re a businessperson you’ve probably been told at some point or another that the key to success is beating your competition. While this is ultimately true, there is a strategy you can use to get a leg up on the other guy. Business, particularly in the HVAC industry, is very much like a tennis match. Yes, you should be concerned about the person on the other side of the net, but once the ball is hit onto your side of the court, it doesn’t matter how good the other person is.

As long as you don’t drop the ball — in HVAC terms, provide quality work and conduct your business with honesty — it really doesn’t matter how good your opponent is. In other words, your competition is really yourself, so you should worry more about your own practices than what the other HVAC contractors are doing out there.

Most contractors worry about being price shopped- when a customer gets several bids from separate contractors. While price may play a factor in who they choose, when it comes to big purchases like an HVAC system, the customer buys from one particular type of contractor — the one they trust. So if you’re worried about coming in with the lowest price or putting your bid in last so you’re at the top of the customer’s mind, you’re missing the point.

Know your Market

In every industry, there is a customer for every price point — low, middle and high. What you need to decide is which market your business is going to compete in.

Are you going to be the cheapest? If so, you better be the Walmart of HVAC contractors because in most cases, only the large companies who can rely on large numbers of customers are successful in this category.

What about the middle price-point? These are the Nordstom-level players in the HVAC world. In other words, you’re priced noticeably higher than the guy below you but you can rely on product and service quality to make up for the price hike that might scare away the bargain-hunters.

Finally there’s the high price-point, that would make you the Chanel or Gucci of the HVAC industry. You rely on a small group of loyal, repeat customers that you have won over with the enjoyable experience of working with your business.

What most contractors don’t understand is, the higher your price-point, the easier it is for your business to be successful. A lot of HVAC contracting businesses are small, so they think their overhead is low, misleading them to believe they should play the bargain game when it comes to pricing. This is why so many small contractors stay busy but never really make as much money as they have the potential to.

Winning the Bid

So how do you place yourself at the highest price-point and still win the job? It all goes back to the original concept — building a trusting relationship with the customer from the get-go. Like we mentioned above, people tend to buy from people they like and trust — that means taking the time and making the effort with the customer, asking questions, giving them solutions to their problems, and offering multiple options to solve those problems. You can build that relationship the following ways:

1. Understand why they want to spend money. It’s not simply about the price or the type of equipment, it’s about their situation and how they want to feel when that situation is resolved.
2. Ask questions and talk less about yourself. AKA, avoid mentioning how many years you’ve been in business, how skilled you are, how renowned your company is. Make the customer feel like they are cared about.
3. Create a connection. If you do number one and two right, you will learn about this person, their family and their life. You will see they are a real life person, just like you. Not coincidentally, real life people have things in common — kids, sports, beer, whatever it may be. This is that magic moment where you can make a connection that they will remember long after the bids are in.
4. Follow up. If you asked the right questions in step number two, you will know the specifics of the project and what exactly it is that the customer is looking for. Repeat this back to the customer so they know you understand what they want and need from you as a contractor. This should be the shortest part of the conversation, yet most contractors make it the longest because this is the step they know well and are comfortable with. Don’t be that contractor.

When you pick the right people to do business with and are the person they want to do business with, it doesn’t matter who is on the other side of your theoretical “tennis net.”