HIGH-EFFICIENCY water heaters are here to stay, and it is important for contractors to stay abreast of these products, not only to understand their technology in order to properly install and service them, but to be able to market and sell them effectively to customers too. If contractors can properly communicate the benefits of these products to customers, they will be more successful when selling the technology.
CONTRACTOR talked with W. B. "Butch" Aikens, tankless sales manager, Southeast Region, for Rheem Mfg. Co., about understanding and selling tankless technology.
“Many have taken the time to better understand the technology, whether through training or through the school of hard knocks, but unfortunately the latter has caused many to back away from this growing future opportunity,” says Aikens.
Aikens mentions that it’s important that the plumbing community understands that this is a growing technology and it is here to stay, and at some point it will become a dominant force within the water heater community.
“Pending federal regulations will advance the technology over the next few years, and you will have to become tech savvy,” explains Aikens. “A good example is the new Energy Star atmospheric tanks just introduced late last year. Each of those introduced, including Rheem, has an electric power cord attached to support the advanced controls. It’s coming, and the industry needs to be prepared.”
Once plumbers understand the technology, they will be able to better communicate tankless technology and its benefits to their customers.
“If the plumber does not understand all of these features and benefits, then he cannot relate those to his customer,” says Aikens.
“We all buy things based on features and benefits rather than needs,” adds Aikens. “It could be a 42-in. TV versus a 19-in. TV, a four-wheeler or boat versus none, or probably more vehicle than we need. Each of these was a feature and benefit purchase and not a need. Somebody took the time to sell us or we investigated it ourselves, and then we bought it.”
According to Aikens, the benefits to the consumer over a standard tank water heater are plentiful, and the key is getting in front of the consumer before their water heater fails, so the contractor can promote all of the advantages of the tankless water heater.
“Whether it’s energy efficiency, carbon footprint, unlimited hot water or more room in the home, when these value added benefits are explained, it makes closing the sale much easier,” explains Aikens.
In regards to advertising, Aikens said that some plumbers are advertising more, but the vast majority are not.
“It may be as simple as a yard sign saying “Another Quality Rheem Tankless Installation by ACME Plumbing,” or by using their trucks as a roaming billboard for the company, or by simply dropping off a consumer focused tankless brochure every time they are in the home no matter the reason; but, unfortunately, most are not,” Aikens says. “Making a connection between the technology and their company is key, unfortunately, most are not.”
Aikens says that many contractors are still waiting for that failed water heater call to come into their office, and then it’s almost too late to take full advantage of many of their opportunities, since this scenario will usually lead to higher installation costs.
“In cases like the above, our new high efficiency condensing unit has helped since it vents with Schedule 40 PVC, and this has helped to lower the installation costs on standard water heater replacement calls, especially when the water heater cannot be relocated,” says Aikens.
According to Aikens, it is of utmost importance for a contractor to get into the customer’s home or business before a water heater fails.
“Tankless water heaters require different venting, more fuel capacity, and possibly more combustion air, so therefore you must go to the home before you can successfully quote a job, and getting into your customer's home or business before their tank water heater fails will increase your sales success opportunity,” Aikens writes in the article, “Plumbers must understand tankless technology.”
“To be successful,” Aikens writes, “We must understand the technology and all it offers the consumer. And, we must understand that it is a features and benefits sale, and not a price-based sale.”
As Aikens mentions, knowledge about high-efficiency water heaters is of utmost importance, so the contractor can successfully sell the product, which is why training courses can be highly beneficial for contractors.
Many manufacturers offer training course, including applications, installation, proper sizing and servicing of tankless water heaters and other high-efficiency water heaters that contractors can participate in. Some even offer courses on how to sell high efficiency water heaters.
Bradford White offers a training course for contractors to learn about the proper installation, service and maintenance of its EverHot product line. Bradford White created a Certified Installer Program, which is held in different locations across the country. Certified EverHot Instructors teach the classes (all instructors underwent intensive education on the EverHot product line).
Compared to a conventional, tank-type water heater, installing and servicing a tankless water heater is a whole new ball game, which is why the company created such a training program, according to Bradford White’s website, and educating and certifying professional installers eliminates many common missteps.
Attendees receive a Training and Certification binder from Bradford White, which the technician can use as a reference tool — it includes all the information required to install and maintain EverHot tankless water heaters. The binder also includes a copy of the EverHot PowerPoint presentation, specification sheets, installation manuals, a venting manual, service manuals, parts lists and an installation check list.
Lochinvar also offers training programs for contractors. There is a two-day Sizing & Application School for industry professionals involved in the selection, sizing and sale of water heaters.
Contractors learn the features and benefits of the full Lochinvar commercial water heater product line, how to select the product best-suited for each specific application and how to correctly size the water heater to provide adequate volumes of hot water at a desired temperature. This training also emphasizes the various electronic and manual sizing activities to familiarize participants with Lochinvar’s sizing software and traditional formula-based methodologies.
“Over the years, Lochinvar has continuously demonstrated its commitment to developing innovative water heaters and boilers, as well as training, world-class service and customer support,” states Jeff Vallett, executive vice president of sales and marketing. “Lochinvar University is a perfect example of Lochinvar Leadership at work, helping industry professionals succeed.”
Lochinvar University also offers courses designed to educate contractors on sizing, selecting, installing and service Lochinvar’s extensive line of high-efficiency water heaters and boilers.
Programs, tax credits
Besides understanding the technology, another important aspect of selling high- efficiency water heaters is for contractors to be up-to-date on current programs, such as Energy Star, and current tax credits.
CONTRACTOR talked to Kara Rodgers, senior program manager, Consortium for Energy Efficiency (CEE), a consortium of energy efficiency program administrators that manages an awareness campaign called the "Coalition for Energy Star Water Heaters,” about how contractors can market high efficiency water heaters to their customers. The CEE is financially sponsored by energy efficiency program administrators and water heater manufacturers.
“A major part of marketing higher efficiency water heaters comes from understanding the benefits they offer homeowners: they save energy and money,” says Rodgers. “By educating themselves, contractors have a greater opportunity to communicate those benefits to their customers.”
“One of the strongest ways to market these benefits is by quantifying them and helping customers understand which type of Energy Star water heater is best for their unique situation,” continues Rodgers. “Contractors now have many higher efficiency models to offer homeowners. Continuing education is key to selling in high efficiency models. Contractors can access a number of online resources for information, or can contact their local energy efficiency program to ask about training or sales information.”
Even though the federal government has decreased its tax credits on higher efficiency water heaters since 2010, credits are still available.
According to Rodgers, these credits can be used to encourage homeowners to upgrade to an Energy Star model, however, while these are a great sales tool, not all homeowners will qualify for them.
“A $300 tax credit is available for gas, oil, or propane water heaters with an Energy Factor greater or equal to 0.82 or a thermal efficiency of at least 90%,” says Rodgers. “A $300 tax credit is also available for electric heat pump water heaters with an Energy Factor greater than or equal to 2.0.”
When asked by CONTRACTOR if the high-efficiency water heaters are becoming more accepted by consumers or if it's still an uphill battle for contractors to sell them, Rodgers says that having the Energy Star label available for water heaters has made an impact on consumer awareness of higher efficiency models.
“Because the Energy Star label is already a prominent brand in the consumer's mind, this may have helped to increase overall awareness of these models,” says Rodgers. “Certainly, sales of high efficiency water heaters have increased since the Energy Star label was introduced.”
According to the Department of Energy’s 2010 Water Heater Market Profile, Energy Star water heaters offer a variety of energy efficiency levels, and can save 14% to 50% when compared to a new, non-qualified model, allowing households to save up to $40 to $285 a year on their energy bills, depending on local energy prices and individual usage, Rodgers tells CONTRACTOR.
Rodgers pointed out that according to the 2010 CEE Household Survey, 83% of households recognized the Energy Star label on sight, a statistically significant increase from the 77% finding in 2009 and, in addition, 84% of households had a high or general understanding of the label's purpose, with 64% of households associating it with efficiency or energy savings.
Rodgers also mentioned that according to the Department of Energy’s Water Heater Market Profile, released in September 2010, higher-efficiency water heaters are on the rise in the market, and in 2006, a total of 625,000 units that would have met Energy Star criteria were shipped; this accounted for approximately 7% of all water heater products shipped that year. In 2009, the first full year that water heaters could earn the Energy Star label, one million qualifying units were shipped, making up 13% of total water heater products shipped.
Want to learn more about high efficiency water heaters? Here is a list of educational resources, including manufacturers, which can help you stay up-to-date.
American Hometec: www.americanhometec.com/homeowners/index.php
Bradford White: http://www.bradfordwhite.com/
Grand Hall/Eternal: eternalwaterheater.com
Takagi USA: http://www.takagi.com/
Red-White Valve: http://www.redwhitevalvecorp.com/
Shark Bite: http://www.sharkbite.com/
Coalition For Energy Star Water Heaters: http://www.eswaterheaters.org/
2011 Federal Tax Credits for Consumer Energy Efficiency: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
The SaveOnEnergy learning center: www.saveonenergy.com/learning-center/
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