Within the HVAC market, customer segmentation is a great marketing tool to help reveal the customers that you’re best equipped to serve. At our 2019 distributor meeting in Phoenix, we spent time discussing the segments we use at Allied Air to better understand the HVAC market we serve. You can use this same research to refine your HVAC customer segmentation to an exact vision.

Segmenting your customers means identifying the shared behaviors and characteristics of your customers and grouping them based on those behaviors. Typically zeroing in on 3-5 segments is recommended – any more than that and the data becomes overwhelming and impossible to act on. We usually attach a memorable name to each group that captures their essence, like “optimistic climbers” or “radical traditionalists”. Then, instead of taking a one-size-fits-all approach, try to focus on the specific needs of that customer segment. Here’s how to get started:

1. Learn What Your Data Says

Start with understanding who you serve best by looking at how and what your customers are buying.

• Try ranking customers by sales – do any patterns emerge?
• What do they buy – only equipment, only parts, your full line? Do they buy high efficiency equipment or just the basics?
• Payment method – are they on credit, or do they pay on pick-up?
• Ordering method – do they buy online, over the phone, through text, or at the counter?
• Engagement – do they participate in counter days, training sessions, or Red Carpets?

You should start to see patterns emerging, but there’s more to the story.

2. Find the Personal Side of Your Customers

Pull in your full team for an exploratory session. This could be in small groups for an hour, or in a larger group for half a day. We recommend including your field sales, branch, warranty, and technical support teams in this discussion, along with anyone else in your organization that has a strong understanding of your customers and the wider HVAC market.

• Ask them to describe different types of customers.
• Show them what you’ve found and ask them to describe the different types of customers they work with during the week.
• Include counter personnel, branch managers, territory managers, warranty processors, and your distributer service representative in this discussion.
• As they add color in broad strokes or about particular customers, supplement with the data collection in the first step.
• Develop a survey, you can ask your customers these same questions directly with tools like SurveyMonkey.

3. Zero in on the Best Segments

By now you should have a good idea of how your customers behave and how they buy. Start grouping up some characteristics you want to use to segment. Maybe you want to only group up customers who buy a lot, or customers who are “all-in” with you, or those who only buy parts and supplies. Give the segments names and write down what qualifies someone to be included in each segment. Here’s an example:

Counter Warrior

• Buys all equipment and supplies from us.
• Relies on the counter team for technical support, install guidance, and information on new products.
• One truck operation - sometimes has a helper.
• Skeptical about new technologies.
• Buys from us because we always have the necessary products and information

4. Consider What's Working and What's Missing

Now that you know the things that matter to each of these customers, how they behave, and what they want from you, it’s time to see what’s working and what isn’t. Each distributor has its own unique value proposition, and you know it well.

Where are you strong and focused?

What’s your key differentiator?

What do they want/need that you’re currently not providing/doing?

How does that resonate with these segments you’ve identified?

If there’s a segment where you’re struggling, it often means there’s a mismatch between how you’re delivering service and what that segment wants.

5. Develop an Action Plan for Your HVAC Customer Segmentation

You shouldn’t try to be everything to everyone. Pick a few segments that you’d like to serve better than anyone else in the market and compare what they want against what you’re currently providing. These are your priority segments.

If you see a tight fit, you’re probably doing great with these segments today – keep it going and look for plans to attract more customers who value the same things. If some critical pieces are missing, that’s your area of focus – zero in on building action plans specifically designed to close those gaps.

You don’t need a team of McKinsey analysts to put segmentation to work in your company. Following these steps will help get you started, and we invite you to visit us at Allied Air for further strategy and support.