HVAC Marketing 5 Part Series: HVAC Marketing in 2017 and Beyond.
“Customer is King, only thing normal is change!”
*** December – SESSION 1 ***
HVAC Dealer – Do you want to make more money in 2017?
- HVAC Market Analysis
- HVAC Advertising Budget
- HVAC Promotional Programs
“Do HVAC Dealers Want to Make More Money in 2017?”
If the answer is YES, then you may need to do some things differently in 2017 and beyond. Continuing to do the same things and expecting a different result is one definition of insanity.
Let’s start with, Are you happy with the return-on-investment from your website and advertising? If the answer is “NO” then how are you going to fix it? If the answer is “YES”, then let’s talk about sports, food or other topics.
So ask yourself, am I willing to invest my most valuable asset “TIME” to fix the problem? If the answer is again YES then there is light at the end of the tunnel, or in your case duct work. For more information on this topic read on or visit www.bmlabs.com/hvac-marketing.
HVAC Market Analysis
If you are NOT happy with your website and advertising results, let’s start with a simple one page HVAC market analysis: What is your:
- Company Profile: Your company profile introduces your business to inform your customers about your company history, resources, management structure, and demographics associated with your products and services.
- Customer Profile: A portrait of your customers (home owners, business owners, general contractors) with similar goals, characteristics and expectations. This will help you make better decisions about opportunities and the services you provide.
- Product/Service Profile: A description of the products and services you provide, i.e. residential HVAC repair, maintenance, replacement, etc.
- What makes you different from the competition? One hint, it is NOT service or quality, make it about your customer. When you differentiate your business, you make it memorable and credible. Tell them why you are the best at determining, solving and servicing their life style and comfort needs.
Why is the HVAC Market Analysis important? Because it becomes the foundation of your advertising and promotional strategy. It helps you identify which advertising and promotional opportunities resonate with your customers and have the highest probability of success in generating leads and minimizing the cost per lead. Keep reading for more information on HVAC Budgets, Advertising and Promotion programs.
HVAC Advertising Budget
Before you start spending money on advertising, Brand Management Labs strongly recommend that you decide on an HVAC advertising budget. When I sit down with a prospect for the first time I always ask them about their advertising budget. They typically say “I don’t know” or “why do you want to know?” My response is always the same. You can continue to spend money on advertising on a trial and error basis or we can start with an agreed upon budget to prioritize how, when, where, and why we are going to spend the budget to build your brand, maximize the number of leads, or minimize the cost per lead.
There are two basic types of HVAC advertising, brand development and lead generation. Smaller businesses, less than $1M, typically focus on lead generation until they have sufficient critical mass to allocate a portion of their advertising budget to brand recognition. Because of a higher budget, larger HVAC dealers can take advantage of certain economies of scale to include brand recognition.
A simple budget guideline for HVAC dealers to maintain their current market position is based on sales.
- Less than $5M, 6% of sales, (i.e. $2,000,000 x 0.6 = $120,000)
- Greater than $5M, 4% of sales, (i.e. $6,000,000 x 0.4 = $240,000)
HVAC Promotion Programs
The HVAC industry is very competitive, highly unstructured, and has few dominant players. This means that few dealers have a strategy to increase market penetration or brand recognition. Most spend their HVAC advertising and co-op dollars as a luxury expense, let’s try direct mail, build a website, or advertise to see if it works. Invariably the results are very disappointing.
Rather than trial and error, another approach is to start with a few quantitative questions.
- What promotions have you done in the last two years? What’s worked and what has not worked?
- How many leads did your advertising and promotional program generate (phone calls, emails, impressions, clicks)? This is critical, if you are NOT measuring performance you cannot determine the effectiveness of your advertising strategy.
- What is your cost per lead? Divide your monthly advertising budget by the number of phone calls and emails received each month.
- How many new customers did you add this year? Compare last year’s list to this year’s.
- What is your customer acquisition cost? Divide your advertising budget by the number of new customers.
Upon answering these questions, we can now go back to your customer profile and based on the services you provide determine the most effective strategy to promote your business and connect with your customers and prospects.
The next article in our series is, “Is your Website your best Sales Person & what are your HVAC customers’ website expectations?” This article will address how technology and online search has changed your customer communication process and expectations. For additional information about growing your HVAC dealer business, visit www.bmlabs.com/hvac-marketing, email firstname.lastname@example.org or call 888-300-4649.