How HVAC Customer Expectations are Reshaping the Industry
HVAC, MEP, and construction industry customers expect more these days. Changing customer expectations are jeopardizing once stable customer relationships for at many companies. The bar is higher today. Customers expect their interactions with us to be fast and convenient. But, most importantly, they expect us to get it right the first time, no matter how complex their problem may be.
A wave of technological disruption has reset customer expectations across the board. Companies like Amazon have set new precedents for convenience and customer service.
Those of us in HVAC, or Mechanical, Electrical, Plumbing and construction, need to keep up and respond to this shift in customer expectations. It is an uncomfortable shift for many of us. We are used to being paid for the quality of our products and our workmanship. But, today, the intangible elements of service that our employees provide can be just as important for winning and keeping an important customer relationship. In this post, we examine how your business can adapt and thrive in this new customer service focused environment.
The Entire Business Needs to Focus on the Customer Experience
This change in customer expectations affects every business function. Service staff need to be more responsive and solve problems on the first call. Sales people need to better understand prospective customer’s problems and proactively provide solutions. Executives need to lead this change, and also focus on better bundling of services with products to provide turn-key solutions.
Your business cannot simply depend on the traditional 10- or 15-year replacement cycles to generate demand. Customers are no longer simply looking to make a purchase to replace aging equipment. Across the board, for HVAC, MEP, and construction firms, customers want partners who provide solutions. They no longer simply want to make a purchase and figure out the rest on their own. As a result, you need to provide solutions that may include product, installation, training, and ongoing maintenance.
According to Manufacturing.net, “This shift in service has pushed large capital equipment manufacturers from focusing on how customers wish to pay for goods, to who is responsible for the ongoing availability of the value delivered by these products after the sale.” This applies not just to the manufacturers, but to distributors, contractors, and construction firms as well. Wherever your firm fits in the value chain, you need to own the customer’s experience with the products you deliver.
Embracing Change in the Mechanical, Electrical, Plumbing and Construction Industries
HVAC, MEP, and construction have been slow to accept changing customer expectations and response. To embrace this change, and get moving in the right direction, we can adopt some of the best practices that other industries are using.
Consider, for example, financial self-service equipment like ATM machines. Companies that sell and service these machines must support thousands of customers in banks and retail stores that depend on seamless operation. When a machine goes down, customers expect same-day service or even faster during peak hours. Providing that level of service often requires embracing technological, as well as organization change, in our companies.
In this example, one of the world’s largest manufacturers and servicers has implemented field service management (FMS) software to automate and track customer service, ensuring that service level agreements (SLAs) are being met. The FSM provides self-service schedule for customers and ensures that technicians with the right skills are dispatched promptly to meet SLAs. The system also provides the technician with access to customer history, machine history, and details about the current problem. Putting this data in the hands of a skilled trouble-shooter has resulted in a dramatic improvement in successful service calls and a corresponding increase in customer satisfaction.
HVAC, MEP, and construction firms should learn from examples like this and embrace the necessary changes. Maybe our service organizations need to be restructured to attach individual groups or technicians to specific customers. Maybe we need to adopt FSM software to better integrate our customers into our sales, service, and support organizations.
Focus on Recurring Revenue
Embracing the change to becoming more service-oriented goes hand-in-hand with another change we need to adopt to survive and thrive in today’s economy. Instead of focusing all our organizational energy on the sale, we need to be driven to optimize recurring revenue.
Traditionally, recurring revenue happens when a satisfied customer comes back to you to make another purchase. But today’s economy provides an opportunity to bundle maintenance or service contracts along with equipment. In fact, the entire equipment purchase may be amortized into a monthly service contract where the customer expects us to maintain, or even operate, the products that are incorporated into out solutions. Many customers now prefer this arrangement because it aligns their payments with how they receive value from the equipment and service over time.
Understanding Customer Needs for Product and Service Bundles
In order to adapt your business to these changing customer demands, it helps to take a step back and think about the most common product and service needs that your customers have. HubSpot, a software company focused on customer-centric operations, has developed a framework for product and service needs that you can use as a starting point. What follows is a synopsis of HubSpot’s framework, adapted from this article, to meet the needs of HVAC, MEP, and construction firms.
To start, below are the 15 most common types of customer needs that HubSpot identifies. Reading through these, think about how they apply to the product and services you provide to your customers.
Functionality: Customers need your product or service to function a certain way in order to solve their problem or desire.
Price: Customers have unique budgets with which they can purchase a product or service.
Convenience: Your product or service needs to be a convenient solution to the problem your customers are trying to solve.
Experience: The experience using your product or service needs to be easy — or at least clear — so as not to create more work for your customers.
Design: Along the lines of experience, the product or service needs a slick design to make it relatively easy and intuitive to use.
Reliability: The product or service needs to reliably function as advertised every time the customer wants to use it.
Performance: The product or service needs to perform correctly so the customer can achieve their goals.
Efficiency: The product or service needs to be efficient for the customer by streamlining an otherwise time-consuming process.
Compatibility: The product or service needs to be compatible with other products your customer is already using.
Empathy: When your customers get in touch with customer service, they want empathy and understanding from the people assisting them.
Fairness: From pricing to terms of service to contract length, customers expect fairness from a company.
Transparency: Customers expect transparency from a company they’re doing business with. Service outages, pricing changes, and things breaking happen, and customers deserve openness from the businesses they give money to.
Control: Customers need to feel like they’re in control of the business interaction from start to finish and beyond, and customer empowerment shouldn’t end with the sale. Make it easy for them to return products, change subscriptions, adjust terms, etc.
Options: Customers need options when they’re getting ready to make a purchase from a company. Offer a variety of product, subscription, and payment options to provide that freedom of choice.
Information: Customers need information, from the moment they start interacting with your company to days and months after making a purchase. Business should invest in educational blog content, instructional knowledge base content, and regular communication so customers have the information they need to successfully use a product or service.
Given this framework of customer needs, you company needs to measure the actual experiences that your customers are having with your products and services.
Measuring Your Company Against Customer Expectations
In the HubSpot article, they go on to explain how your company can align with changing customer expectations and provide the level of service that is expected today. They recommend that you start with a customer surveys and some basic analysis.
Customer Needs Analysis Survey
A customer needs analysis provides data about the benefits, attributes, and features that your customers need, and how your product compares. You should conduct surveys in each of your markets, asking customers to compare you with competitors and describe their perceptions of your strengths and weaknesses.
The surveys should include:
- Questions about positive and negative word associations with your product (or service).
- Questions asking customers to group your product (or service) in with similar and/or competing products (or services).
- Questions comparing and sorting products (or services) according to their preferences for usage.
HubSpot provides this guide for more details about how to understand where your brand is positioned. After you have completed the survey, you process the results using a means-end analysis.
A means-end analysis processes the data from your surveys to help you build a picture of why customers purchase your product or service. Reasons are typically divided into three categories.
- Features: A customer buys a product or service because of the features included in the purchase. If the customer were buying a computer, for example, they might buy it because it’s smaller and more lightweight than other options.
- Benefits: A customer buys a product or service because of a benefit, real or perceived, they believe it will offer them. The customer might also buy the computer because it syncs easily with their other devices wirelessly.
- Values: A customer buys a product or service for unique, individual values, real or perceived, they believe it will help them fulfill. The customer might think the computer will help them to be more creative or artistic and unlock other personal or professional artistic opportunities.
Obviously, different customers may have different reasons for purchasing your product. What you are trying to do here is identify groups of customers with similar reasons. Then, you can develop strategies to focus on improving your product’s position with respect to each group.
Becoming Customer Focused
Once you have analyzed your customer surveys, and identified where your company falls short, it becomes much easier to address the problems. It will be clear where the biggest opportunities are. Where do your customers need the most help in order to realize value from your products? Where are the pain points?
Build service offerings to address these pain points. That’s where your customers will get the most benefit and your company will build the most good will. In many cases, you will find that customers will happily pay premium prices for products that include superior service and support. Instead of haggling over the upfront cost of equipment, you may find that your company can achieve more stable revenues and earn higher profits by bundling product and service together and charging a monthly fee over a period of several years.