After Decades of Commoditization, Are Customers Still Choosing HVAC Providers by Price?

Being in the HVAC industry has its challenges and today’s circumstances are no different than other times in the industry’s history. However, despite shared experience, too many HVAC vendors continue to make the same mistakes of the past. Whether we like it or not, a service-based industry such as HVAC equipment manufacturing, distributing, installing & servicing has always run the risk of allowing homeowners and business owners to lump all of us into one basket. The result of that commoditization was an industry where the only common differentiator was price.

It wasn’t until we realized that we needed to do things to differentiate ourselves from others in the pack that we began to separate ourselves. When our industry doesn’t differentiate, then the end user is forced to rely solely on price to choose their HVAC vendor. This mode of thinking oversimplifies the entire industry and leads to poorly informed customers. This is what commoditization in the HVAC industry means and why for so many decades the industry found itself competing only on price.

Unsure of how you should be differentiating your business? We polled HVAC contractors across North America with the following question to learn more about how contractors felt about differentiation in the industry.

Do you agree with the statement relative to HVAC equipment that, customers choosing HVAC providers often believe “a box is just a box”?

Contractor #1 Eastern Canada:

From a contractor standpoint, some would probably agree with that statement. From a consumer standpoint, I would say probably yes, but it’s the responsibility of the contractors to educate consumers on these things and, in my opinion, the more educated the consumer the better it is for me and my staff. Is a computer just a computer? Is a car just a car? It’s all subjective but when you begin to look beyond the obvious and dig deeper then you become more knowledgeable, and the views/opinions will often change with that new knowledge.

Contractor #2 Southeast:

I do not agree with the statement “a box is just a box” because inside the box there must be a qualitative, technological thing working hard to give comfort for all of us. In some areas heating, refrigeration & air conditioning is a must in order live.

Contractor #3 Midwest:

No, it’s not just a box. Every manufacturer has a different process when it comes to how they assemble it to how they test it. Also, some manufacturers also use different heat exchanger designs along with different parts. Furnaces and air conditioners have the same end goal no matter the brand but all reach this in different ways.

When you’re deciding how to grow your business, you must first break through this mindset and make sure your company understands that selling on price is a losing strategy. Define your value and ask your employees to help you. What makes you different? And it’s ok to think outside of the “box”. Contact us to learn more about how you can differentiate yourself in the HVAC industry.