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Connected products offer homeowners unique advantages such as the convenience of temperature adjustments from a smartphone and enhanced monitoring of energy usage. Although some contractors might be unfamiliar with these devices or installation processes, the industry is shifting to meet evolving consumer demands. And contractors stand to benefit from their efforts to adapt.
Today, approximately 10 percent of homes are outfitted with connected units. However, an underlying shift in the age demographic of homeowners is expected to trigger a rapid acceleration in the adoption of these products.
Millennials, for example, now account for 51 percent of home buyers and are just beginning to enter their peak influence on the real estate market, as they, and other digital native demographics such as Gen Z demand “smarter” functionality in conventional home products.
This shift poses a significant business opportunity for plumbing and heating contractors.
But to capitalize on this trend, PHCPPros will need to adapt to market demands, keep pace with advancements in technology and rethink conventional pricing models.
Adapt to market demands: Consumers are searching for the convenience, efficiency and enhanced functionality of smart products. The steadily increasing influence of millennials and Gen Z suggests these priorities will continue to be important.
The ability to monitor energy and equipment usage, detect maintenance issues early and manage an entire household from a smartphone are key selling points of connected products that also align with this evolution in consumer demand.
Energy efficiency is another increasing focus for consumers, as younger age groups are more environmentally conscious than previous generations. The growing list of energy efficiency features appeal to most customers and result in significant cost savings.
Keep pace with tech: It is critical that contractors thoroughly understand the newest technology to effectively guide their customers through the sales process. This increases their potential to complete an install with a higher-end connected unit that meets their customer’s needs and adds to their overall profitability.
Another factor to consider is the snowball effect, as tomorrow’s product innovations will most likely build upon features and concepts being utilized today. Contractors that aren’t comfortable with the current scope of connected products may face a disadvantage every time a new wave of innovation hits the market.
A simple step to becoming comfortable with newer, connected products is to participate in product training sessions. From install to maintenance, most training sessions will provide answers and help you become acquainted with emerging products and technology.
For example, Rheem offers a variety of training options to help contractors learn about topics that are most relevant to their customers and business.
Between in-person lessons (when possible), virtual walkthroughs, and streaming videos, Rheem Academy is a great resource for those seeking to learn more about our products and the technology that we see shaping the future of the HVAC industry. Currently, connected product training is in the highest demand at Rheem, with about 60 percent of our air training focusing on connected products.
Rethink convention pricing: It is true that connected products carry steeper price tags than their conventional alternatives. And although there are cost benefits of this advanced functionality and energy efficiency in the long run, the upfront cost may still be prohibitive for some customers.
Offering financing options, however, can help make the initial investment in these higher-end products more affordable to broaden the pool of potential customers. The flexibility of these financing plans, which are typically available in varying terms like 12, 36 or 60 months, benefits both the contractor and the customer.
From the customer’s perspective, they are making a responsible short-term financial decision while investing in a high-end product that will be efficient and reliable in the long-term. The contractor, on the other hand, stands to make more profit from a high-end sale and, hopefully, repeat business from a satisfied customer. Early pay-off options can help as well, as customers sometimes just need the head start.
Connected products are an emerging area in HVAC, but will soon be a necessity for homeowners seeking convenience, enhanced efficiency and remote monitoring/control.
Contractors should embrace this shift to connected products as a business opportunity and invest in developing the market awareness, product knowledge and pricing structure that will help them both advise customers and grow their business.
Phil Oglesby is manager, education and content development at Rheem Manufacturing and has 10 years of industry experience.