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Contractor Magazine

FORUM: An online response to change in our industry (Abridged)
By Tom Warner

I FEEL CHANGES coming to our plumbing and HVAC service industry as powerful as the changes faced by the horse-and-buggy transportation industry 100 years ago.

Like many of you, I was raised in a plumbing-and-heating family business, which was started in a garage behind my grandfather's house. People used to tell me: “You will never need to worry about having a job. People will always need plumbers.”

They were probably correct. But isn't that just like the horseshoe installer being told: “Don't worry about horses not needing to be shod. Horses can't pull buggies without horseshoes. People will always need transportation.”

A decade ago, competing against utilities and consolidators was a glimpse at an unknown future. If you have been doing plumbing or HVAC work for 10 years, think of all the products, materials and processes that are new since you joined the industry.

A few processes within our industry have changed little. For example, consider communication. We always had a telephone at work. In the 1950's, I noticed how our business worked:
  • Customers phone in their service request;
  • My father's cousin Mary or the dispatcher wrote what the customer wanted on a ticket and placed the ticket in the correct box on the wall for each day of the week; and
  • Each morning the plumbers came into the office and got their tickets for that day and turned in their completed tickets for the previous day.
HVAC sales and replacement “service delivery” has remained basically the same since it began with proprietor-to-customer sales. While some service contractors grew large or consolidated, others joined retailer collaborations. However, all existing contractors, firms or selling agents of home comfort equipment systems and products used the same basic methods: advertise to attract new customers; send a salesman or tech to the customer's home; and create an estimate to try to make a sale.

Today's market

We are migrating our company toward online customers. In our Washington D.C., area, I feel getting work from online customers is absolutely critical for our plumbing and HVAC service company.

Near the end of the millennium, I realized customers in our metropolitan area were demanding a new purchasing process. Among their issues are:
  • Everyone is pressed for time.
  • Most customers have no one home during the day.
  • Getting estimates for work done within the home involves missing time from work or taking time during a busy weeknight or weekend.
  • Most people have a computer at home or at work. Some even do their “calling” through the computer.
  • Buying online saves time.
  • Many cities now have online firms providing third-party validation for homeowners wanting to select a company for plumbing and HVAC projects.
  • Homeowners aren't happy with the time involved in getting plumbing and HVAC projects started.
Often they have to locate several contractors and then take the time to meet with each, obtain bids and check references. Despite these efforts, they can still find the experience troubling, because they lack the knowledge to evaluate proposals and the quality of the service performed. In all too many cases they discover the lowest cost contractor gave them inferior service, because the workmanship was shoddy. But unfortunately be then it's too late.

From our kiosks within local outlets of a national retailer, we gained crucial sales experience by discussing replacement HVAC systems with many of the thousands of customers who passed by the TRANE/At Home Services sales kiosk. We found most home-owners are Internet-savvy and Web-reliant. They prefer to research, find and purchase what they want online. Customers came to the kiosks just to obtain the URL of an HVAC product.

My Internet journey

Three years ago, I had about my 1 millionth request to:

Just give me a price.
I don't want to go through another dog-and-pony show.
I know the system I am going to buy. Just give me your price to match this installation.

I couldn't do anything for the customer because I don't give quotes for anything I haven't seen. Later it hit me like a bolt of lighting. I could develop a process to give "Quick-Quotes."

After six months I had a draft paper with a basic outline of how it could work, When talking if over with my staff, an employee with extensive computer experience suggested it would be better to code (computerize) the process. At that point, we changed the name to Value-Price.com. We spent more than a year testing and improving the Beta version before going live in May.

Less than three months ago, our first 35 requests for a proposal resulted in five systems sold. In mid-July I cut our future Yellow Pages ads. Now in early August, a pair of Web portals brings in more than a half-dozen solid clients daily.

You are welcome to check our site Value-Price.com and explorer. If you want to see what it would cost to replace your own air conditioning system select the “On-Line Quotes” and complete the query process.

If you don't live within our market area, you will need to use zip code 20190. To understand our online method of business, please use all other correct data entries. Our pricing may not be what you have in your market. However, in our high cost-of-living area with its congested road system, we make our normal profit and are able to cut more than 10% from our total cost for the systems sold online.

Remember, my online quote process is like a fifth child. Let me know if you think she is friendly, beautiful, intelligent and works hard to match the correct equipment package for you. Like a parent, I love my digital baby as much as my four wonderful kids.

Tom Warner is president of Utility Service Express in Reston, Va.
He can be reached by e-mail at [email protected].

Publication date: August/2005

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