Wolves in the Sheep Pen: The rise of service heating companies
The heating and cooling industry the landscape is changing drastically. Most heating and cooling companies used to be a combination of New Construction, Service, and Replacements. Over the last decade many of these companies have shed the construction portion of their business to focus on Service and Replacements. With a heavy emphasis on replacements. These companies live and die on replacements. These companies are taught by business development organizations that cater to the specific industry. They coach and train businesses to maximize profitability through over the top customer service (the smoke screen) and aggressive sales tactics. Baumann & DeGroot attends these seminars to glean information on the world outside West Michigan in the heating and cooling industry and to apply best practices at our operation, but have been alarmed at the focus on profits over the customers.
With our “inside information” and a deep-rooted commitment to service and our community it is time to shed light on the operations that are fleecing our community in my mind. There are a few heating & cooling companies that are based in the Grandville & Grand Rapids area that are built on these principles. These companies advertise aggressively and steeply discount their tune-ups and maintenance plans. These tune-up appointments are very thorough as the point of this visit is to identify potential problems and sell expensive repairs or better yet a replacement. This is a net neutral or net loss service performed in order to find and condemn furnaces and pave the way for a salesman.
There is no easier sale than to a customer who is told their furnace was just shut down and is a safety hazard to their family. The salesman will attempt to book an appointment when both heads of a household can be present. This ensures that the decision maker will be at the meeting. The salesman will put together a quote on site and go over the quote with the homeowners. The price is (in my mind) staggering. I have seen quotes for standard furnaces above $6,000 and systems well over $10,000. The salesman will use aggressive sales techniques such as offering to install a furnace for $7,000 and installing the air conditioner for free, or going into detail the dangers of the existing furnace. All of this is done to secure a commitment before they depart. The likelihood of a sale drops exponentially if they leave without a signature.
Many homeowners don’t stand a chance and end up making a poor financial decision because they are rushed into a decision. The salesman will make them feel informed as most of the presentation revolve around making the homeowner feel educated enough to pull the trigger. Because of the URGENCY stated and the prospect of not having heat or air conditioning many homeowners sign up. The point of the exercise is to not give the homeowner an opportunity to look elsewhere.
The point of this article is not to bash our competition, but to inform homeowners everywhere to get a 2nd opinion even if you don’t get it from our company. At Baumann & DeGroot we welcome competition and 2nd opinions in the replacement market. Our quality of work and service can only be matched but not beat and our prices are consistently fair if not low. I have been to homes where our competition won’t even waste their time quoting a system because they know they won’t be competitive and I wear that with a badge of honor. Our company makes a good living providing honest work at honest prices, I am hoping this article sheds some light on what I consider wolves in our marketplace preying on unsuspecting homeowners. Be smart, be patient, get a 2nd opinion!