Are You Ready for the New 2015 HVAC Efficiency Standards?

As you know, our primary focus on PowerTips is to provide you with tips, tactics, and techniques for building a strong, consistently profitable remodeling company. But sometimes we just need to make sure you’re on top of the latest industry news! This week we’re proud to have Stefanie Petersen with Ferguson to share the key changes to HVAC Efficiency standards in 2015.

How well are you and your team educated about the upcoming changes?

In April 2014, the U.S. Department of Energy (DOE) confirmed upcoming changes for HVAC efficiency standards for residential and commercial equipment. However, according to a survey by Emerson Climate Technologies Inc., 74 percent of contractors are unaware of the change and how to best prepare their staff and inventory to meet customer demand and new regulations. Below are key aspects every remodeler should know.

What’s changing?

New Seasonal Energy Efficiency Ratio (SEER) standards will be enforced for air conditioners and heat pumps installed on or after January 1, 2015; however, standards differ by region. The current 13 SEER standard for air conditioners will move to 14 SEER in most areas, but 13 SEER air conditioning units can still be sold in the northern region.

The most significant product change regarding the new regulations involves all split-system heat pumps. All regions will move from 13 SEER and 7.7 HSPF, Heating Seasonal Performance Factor, to the new national heat pump efficiency minimum of 14 SEER and 8.2 HSPF.

Additionally, the changes also affect the FTC EnergyGuide label, commonly referred to as the yellow “hang tag”, attached to the heating and cooling system. The label contains SEER and HSPF ratings for the unit in relation to similar models. Instead of a single rating point, new labels for split-system air conditioners and heat pumps will now be shown in a range representing the lowest and highest SEER ratings for all the condenser’s certified coil combinations. This means all of the component parts in the entire system, inside and out, must have an aggregate SEER that meets the new guidelines.

HVAC Standards by Regiion

How to prepare

Education surrounding the new standards is key, as enforcement will begin in less than five months. Remodelers and contractors should be able to identify that the equipment being installed meets the minimum standards of the new regulations as well as meets the needs of the customer.

The majority of U.S. manufacturers already offer 14 SEER heat pump systems, and many manufacturers may spruce up current 14 SEER designs to meet product demands for 2015 inventory stocking. While the changes are effective January 1, 2015, the new regulation also includes an 18-month grace period for distributors to sell their remaining inventory.

Image courtesy of Emerson Climate Technologies

How to Sell Against Low-Priced, Non-Compliant Competition

wolf in sheep clothingOne of your fellow remodelers posted the following heartfelt plea on a discussion forum the other day:

“With all the RRP rules and OSHA rules, workers’ comp, liability insurance, licenses, taxes and more how do we compete with the people who don’t have all this?  How can I make money?  HELP!!!”

Sound familiar? The challenge is never going away and will probably only get worse with time. So what’s a Remodeling Pro to do?

Turn the Tables on Your Competition

One of the only ways to overcome this challenge, and I know it’s tough, is to turn it on its head and use your compliance to differentiate yourself from the low-priced, non-compliant competition:

“Mr./Ms. Prospect, how would you feel if your (addition/kitchen/bath) wasn’t constructed following proper modern health and safety regulations?”

“I know you might be talking to other contractors – what did they tell you about how they follow health and safety laws?”

“Ever seen one of those TV shows where they uncover and fix bad remodeling? How important to you is it that your remodeling work is safe AND legal?”

“Construction carries risks – what do you know about your liability if someone working on your house doesn’t have the proper insurance?”

“One day you might want to sell this house or pass it on. What would you think about a house for sale with remodeling that didn’t pass EPA standards (or was modified without proper licensing and permits)?”

These questions give you an opportunity to compare and contrast yourself against the lesser “competitors”. You need to develop LOTS of questions ahead of time plus you’ll need to be prepared to demonstrate to prospects how you are better.

Look for a Big-Picture Perspective

Another technique is to break away from this track and go in a different direction altogether:

“Mr./Ms. Prospect, what is your goal for this project?”

“Why are you remodeling your (kitchen/bath/basement)?”

“Why did you contact us?”

What you’re shooting for is to get the prospect thinking about why they called you (and the el-cheapo guy) in the first place.

Your prospective client must have hit a “pain-point” or a “dream-point” in their lives and this created the impulse to finally make an inquiry.  They have a need to make something right or they have a dream, a vision, of how things could be.  And, that pain can only be eliminated, that vision can only be achieved, if the work is done safely, legally, and correctly the first time.  The last thing they need is to be right back in the same spot, only worse (because they’ve paid for bad work), once the job is done.

Nobody has a dream that includes unsafe, non-compliant, possible illegal work done on their home.

Point Out the Pitfall, Then Teach Your Customer How to Avoid It

Once everyone is thinking “big picture” it’s time to further differentiate yourself and your firm.

You do great work that is meant to last for a lifetime, right?  Compare what you do to what might happen if sloppy, corner-cutting, non-compliant work is done on their home.

Ask your prospects if they’ve ever had someone else work on their home before. Yes?  Why are they talking to you instead of the last guy?  Find out what happened.  If they’ve never done any remodeling before find another consumer purchase that was substandard (car repair, ill-fitting suit, plumbing – doesn’t matter).  Drag them through that experience again:

“How’d you feel when you first saw the (problem with the purchase)?”

“What happened next?”

“How did you finally solve the issue?”

Now compare and contrast again, letting them know on each and every point they raise how you can make sure the experience will be awesome this time because they’re gonna choose you!

More Than Just a Sales Pitch

If you’re a pro this is no sales pitch.

You are a guide, a consultant, a facilitator to your clients, helping them make great decisions. You owe it to people to educate them about the difference between you and your “competitors”. It’s your duty.  Everyone deserves your best.  Everyone deserves protection from the worst.

The hurdle, for most remodelers, is that there is no “implied excellence” in your brand. If you talk to people and mention “Lexus”, “BMW”, “Polo” or “Ritz Carlton” they “get it” right away. The consumer has an immediate understanding of the quality inherent in that brand.

You must accept the fact that most prospects have no idea who is best in the remodeling industry.  Top remodelers must educate their prospects, every time, over and over again.

Embrace the opportunity that comes with the need to differentiate yourself and use it to your advantage.

The Education Never Stops

Last point: Don’t ever stop educating your customers.  Throughout the project you will have many, many opportunities to demonstrate your excellence. Some of your great work will be built into the project and never seen again. Other work includes small details that would definitely be missed by the average consumer.

Take the time to constantly educate your customer by showing them your top-quality work and procedures.  Have a plan to do it.  At the completion of the project you want the customer to feel great about your work AND you want them bragging about YOU – leading to lots of referrals!

Nothing Works Every Time

There are no magic bullets or miracles. You won’t sell ‘em all.  You don’t need to sell everyone. You don’t want to sell everyone!  Some folks will still be willing to go illegal and cheap.  That’s OK – they were never yours to begin with.

Wishing you much success – Happy Selling!