Upgraded Systems Give Builders Options

(13 August, 2003) – by John R. Hall
Picture the following scenario: A local builder is putting in a new residential subdivision. You, as an HVACR contractor, have worked with the builder in the past as a subcontractor, installing the basic "construction-grade" equipment because the builder sticks to a strict budget and doesn't have time to get into the custom market.

But you have an idea that might intrigue the builder — if you can nail his feet to the floor long enough to listen. You propose offering a package consisting of a higher-efficiency furnace and condensing unit, a dehumidifier, an electronic air cleaner, and a multifunction thermostat. The margins on these upgrades are very attractive, and you know that, if given the choice, buyers often opt for a higher-efficiency system in a new home.

Does the builder like what he hears? Can you make the sale? Several manufacturers have set up programs to help you do just that, asserting that upgrade packages can be a win-win situation for contractors, builders, and homeowners.

All-American Home Program
American Standard Heating & Air Conditioning (Tyler, Texas) began its All-American Home Program after noting the success of a similar program, which was run through its kitchen and bath products division. The original program is tiered, allowing dealers to sell kitchen and bath products throughout the home. The more products sold, the higher the rebate to the dealers.

"From working with our people in the bath and kitchen side, we determined that we could bring in heating and cooling equipment and tie in many of the same elements," said Paul Trotter, American Standard Heating & Air Conditioning's national sales manager. "We created this new program with the heating and cooling equipment eight months ago, targeting the local custom home builder. The two programs are run separately, but they appear to be seamless to the builder."

With the HVAC equipment, the categories for upgrading are listed as "good," "better," and "best" — depending on the product's efficiency. Air cleaners, coils, and thermostats are all included in this program.

"If a builder chooses the better and best equipment, he can get extra incentives, besides the higher rebates," said Trotter. "He can get a two-year parts and labor warranty. He can get up to a $300 rebate if he maxed out everything."

In order to market the product to the builder, American Standard Heating & Air Conditioning offers a Home Comfort Tour Kit. It comes in a briefcase-shaped display and includes door hangers and a home tour guide.

"The guide includes a map where builders can walk the buyers through the home, on a scavenger hunt through the home, looking for elements of the heating and cooling system," said Trotter.

"The home tour guide brochure allows the prospective home buyer to take a self-guided tour of the home highlighted by a stop at each of the actual components of the heating and air conditioning system."

"We merchandise each element of the system and describe the element with a 'hanger' card," said Joyce Warrington, American Standard Heating & Air Conditioning's brand manager. "The tour takes buyers outside, where we talk about the outside units such as the condensing unit or heat pump.

"The final part of the tour is an invitation to go back indoors and enjoy the indoor comfort. Buyers are encouraged to take a brochure entitled 'At Home With Comfort Guide.'"

The whole tour is an educational experience for home buyers, informing them of the various efficiencies and add-on products designed to make the home more comfortable and lower energy costs.

"The dealer includes his business card in the guide, providing a possible future lead for him or her," Warrington said.

"Builders enjoy this home tour because the buyers can see all of the amenities of the model, like crown molding and arched doorways — items they might pass by if they weren't on this tour," said Trotter. "They also like it because they can provide an extended parts and labor warranty on every American Standard Heating & Air Conditioning product in the house."

To top it all off, there is a galvanized powder painted steel site sign that can be placed on the front lawn, inviting the prospective home buyer to come inside. Dealers can insert their own name on the sign for added marketing.

"Our dealers love this program," Trotter said. "It is a creative way to get in with the local custom home builder."

American Standard Heating & Air Conditioning issues the rebates, which are passed down through the local distributor to the dealer and eventually to the builder. The dealer and distributor share the cost of the home tour and the two-year warranty. In many cases, the distributor markets the program directly to the builder and leads are then given to the dealer.

"We make it easy for the dealers to develop their own marketing tools and not to use a cafeteria-style menu to sell equipment," said Warrington. "The program is all packaged together in a cost-efficient manner, which makes it easy to order and to set up."

American Standard Heating & Air Conditioning also offers a builder upgrade program in which the builder provides the names of the home buyers to the local dealer, who then has the opportunity to sell upgrades, such as high-efficiency equipment and add-ons. The program can be customized. The dealer needs to have a showroom or the capability to show a computer program depicting a "virtual showroom."

"Everybody shares in the spoils of the game," said Trotter. "The builder gets a rebate, the dealer makes a higher margin, and the consumer gets the product he or she wanted anyway."

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