When asked to rank attributes in order of importance relative to each other (i.e. a forced ranking of 1-8) [Q5], the top to bottom ranking was:

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2 Survey Purpose To identify and quantify meaningful aspects of the buying process for owners of older homes when it comes to replacing/purchasing a new HVAC system, including: - consumer HVAC product & installer research methods - purchase timing/sales cycle definitions - desired HVAC features and benefits - relative importance of varying factors in the purchase decision - key influencers to consumers of HVAC products - communications methods/channels used by HVAC consumers to communicate with HVAC manufacturers - identify and capture any competitive strengths and weaknesses Unico has in the HVAC market overall - capture information to further refine messaging to improve communication with this audience. This blind (i.e. unbranded) survey was sent to 97,356 addresses maintained by Unico and identified as owners or enthusiasts of older homes. Disqualifiers (Qs 1,2 & 3) To ensure the survey recipients reflected people most likely to be involved in the purchase of HVAC systems as well as those who would have opinions valuable to our purpose, we disqualified those respondents who rent, live in multi-unit complexes or indicated no interest in adding a central heating or cooling system to their home. Current HVAC System Attributes (Q4) When asked about the attributes of their current systems, respondents indicated that the top 3 missing attributes were zoning ability (-42%), even temperatures (-31%), fresh/outside air (-28%), and adequate warranty coverage (-21%). Conversely, respondents agreed that their current systems performed well in the following: installation required no major construction (65%), system produces the desired temperature (65%), system operates quietly (62%), system maintains desired humidity levels (51%). HVAC Attributes Desired by Consumers (Qs 5, 6 & 7) When asked to rank attributes in order of importance relative to each other (i.e. a forced ranking of 1-8) [Q5], the top to bottom ranking was: 1. Comfort (62%) 2. Low energy consumption (46%) 3. Better air filtering (25%) 4. Low equipment & installation cost (19%) 5. Long warranty [> 10 years] (15%) 6. Quiet operation (13%) 7. Zoning capabilities (10%) 8. Minimal construction/disruption to home (9%) (NOTE: Percentages shown reflect the combined percentages of the most desired and 2nd most desired attributes) 2 / 19

3 HVAC Attributes Desired by Consumers (Cont'd) When asked what attributes recipients would expect a "best" HVAC system to have the top results were: 1. Includes best technology available 2. Has a warrantied life cycle of 15 years or more 3. Has a low operating cost (is energy efficient) 4. Includes whole-house monitoring or remote controls HVAC Product Information Sources (Q7) The top 4 sources for acquiring information on HVAC products are: 1. Consumer product review publications/websites (52% likely to use) 2. Friends and family (49% LTU) 3. Google search (44% LTU) 4. Local or preferred HVAC contractor (41% LTU) Over 1/3 of recipients will visit HVAC manufacturer websites in search of product information. Contractor Selection Information Sources (Qs 8 & 9) Referrals remain the top method for consumers to find installing contractors in the following order: friends/family (64% likely to use), previous customer (46% likely to use), and other service professional (43% likely to use). However, 60% of respondents indicated they "May use" a contractor listing on a manufacturer's website (while 15% of respondents replied they would be likely to use this feature). When added to the fact that 82% of respondents contact 2-3 contractors for bids, this would bolster the notion that the more UPCs listed on the website, the better. Familiarity, Likelihood of Purchase, and Comments by Brand (Qs 10 & 11) Perhaps not surprisingly, the top brands consumers rated as "very likely to purchase:" are Trane (45%), Carrier (44%) and Lennox (35%). While Unico outperforms its SDHV rival SpacePak by a margin of 4-to-1, 45% of respondents replied they are "unsure" if they would be likely to purchase Unico products. This could be due to pricing, unfamiliarity with the brand or a combination of both. However, those who are "very likely" to buy Unico (8%) were joined by 6 respondents who left positive comments regarding Unico by name when asked to associate positive qualities with the list of brands provided. Awareness of Utility Rebates (Q12) 78% of respondents are aware that utility companies provide rebates for energy efficient HVAC equipment, leaving an opportunity to communicate this fact to 22% of the consumer audience. 3/ 19

4 Chief Reasons Consumers Cite for Replacing/Installing HVAC (Q13) 1. Want new, energy efficient system (36%) 2. Current system failed/is failing (31%) 3. Want to replace current system w/ new technology (26%) 4. Don't currently have central HVAC (19%) Who specifies the HVAC product? (Q14) Over 1/3 (35%) of respondents indicated they would tell their installer the HVAC product they wished to have installed, while almost half (48%) would defer to the contractor's recommendation. Information Gathering/HVAC Sales Cycle (Q15) 37% of respondents will wait until their current system fails, 18% will begin research 1 year or more, and 17% will begin amassing information 3 to 6 months prior to their decision to purchase. What Incentives Can HVAC Manufacturer's Provide? (Qs 16 & 17) Purchase motivating incentives breakdown as follows: Pricing incentives (64%) Extended warranties (10%) Better energy efficiency (6%) When ranking the importance of costs versus the disruption of their home's space/ aesthetics, 82% of respondents indicated that equipment/installation costs were most important, while 64% of respondents chose operation costs as most important, compared to 31% who chose disruption of space/aesthetics (although this does represent almost a third of respondents). Summation & Recommendations Immediate Opportunities 274 respondents who indicated they are dissatisfied with their current HVAC system (141) or don t have a system but are considering one (133) are candidates for immediate further outreach through content marketing or being separated into categories of potential leads. One-third of all respondents will gather information regarding HVAC products from manufacturer websites and three-quarters of all respondents may or are likely to use these sites as sources for qualified installers. Therefore, the planned and continued improvement of the corporate website and UPC locator are paramount. 22% of respondents are unaware of utility rebates for HVAC equipment, leaving an opportunity that ties into expressed price desires (45% of which mentioned rebates specifically) to market the rebate listing on the website. 4 / 19

5 Immediate Opportunities (Cont d) 21% of respondents are unhappy with their current warranty, a long warranty ranks solidly before other attributes desired in an HVAC system, a warrantied life cycle of 15 years or more is the second attribute consumers most associate with a best system and 10% of respondents specifically mentioned strong or extended warranties as a significant incentive to purchase. These facts indicate that there is a consumer base that would be receptive to marketing of Unico s 15-year warranty. While little-to-no remodeling and quiet operation ranked low relative to other attributes (namely, overall comfort, efficiency and price concerns), other Unico benefits such as even/draft-free temperatures, quiet operation and humidity removal ranked solidly with both current system attributes and those desired and considered to be part of a better or best system. The high percentages of these benefits associated with Unico expressed by owners of current system begs the question: are Unico converts remaining on the CM list? And, while relatively low to other attributes, construction/major disruption to the home still remains a strong barrier to consumer purchase with 47% ranking it as somewhat important and 31% deeming it very important. Continuing to stress this benefit, especially to truly older, architecturally significant homeowners is obvious. The Case for a Strong Contractor Base While 1/3 of consumers are informed and brand-specific in their HVAC choice, almost ½ defer to their HVAC contractor s recommendation. This, coupled with the fact that 82% of respondents will contact 2-3 contractors for bids (while another 12% will contact 4-5 installers) indicates that the installing contractor remains the most direct route for a manufacturer s products into the home. With the exponential increase of visitors to the website and UPC locator, it becomes imperative to increase the number of qualified Unico installers and that all sales and marketing personnel impress upon these contractors the monies and efforts that go into creating these highly qualified leads. In short, more UPCs are needed and competition among them for these leads must be fierce. Branding While The Unico System is no longer the best kept secret, it still falls far behind the recognition levels of the Tranes, Carriers and Lennox s of the world. Continued efforts to the older home market and a new push to the custom home market will undoubtedly help increase awareness. Potential Further Research Expounding on the data gathered regarding likelihood of purchase by brand name (Q10), further market research may help to answer a vital question: when consumers think of HVAC, are they thinking of the entire system (outdoor unit + indoor components + duct) or just the outdoor unit? We may want to take a look at an old positioning/messaging tactic that The Unico System can be paired with any manufacturer s high SEER, high quality outdoor unit. 5 / 20

6 Answer Choices Own 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q1 Do you own your own home or rent? Answered: 1,120 Skipped: 0 Responses 88.21% 988 Rent (Disqualified from remainder of survey) 11.79% 132 Total 1,120 Q2 Is your home single-family, detached dwelling (includes townhouses) or part of a multi-unit complex (i.e. condominium or purchased unit)? Answer Choices Single-family home Part of multi-unit complex (Disqualified from remainder of survey) Answered: 994 Skipped: 126 Responses 94.16% 5.84% Total 994 Q3 Does your home currently have a central HVAC system? Answered: 953 Skipped: 167 Answer Choices Responses Yes, and I am satisfied with my current system % 585 Yes, but I am dissatisfied with my current system. No, but I may consider adding one. No, and I have no interest in adding one. (Disqualified from remainder of survey) Other (please specify) 14.80% % % % 31 Total / 20

7 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q4 Please indicate your thoughts about the following attributes in regard to your current central heating and cooling system: (Please rate all attributes or choose "N/A" if not applicable.) Answered: 818 Skipped: 302 Disagree Neither disagree nor agree Agree N/A Total Air can be specially filtered (e.g. high MERV rating or HEPA filters) 17.06% % % % Can provide fresh (outside) air 27.52% % % % Consistently produces the desired air temperature 15.11% % % % Creates no strong drafts of hot or cold air when operating 14.92% % % % Does not require supplemental systems (window A/C units, space heaters, etc.) 17.26% % % % Has more than one zone (e.g. 2nd floor can be on while 1st floor is off) 41.89% % % % Installation required no major remodeling/alteration to home's aesthetics 9.34% % % % Is adequately covered by warranty 21.31% % % % Is easily repaired when malfunctions 8.78% % % % Low operating cost (monthly utility bill) 17.53% % % % Maintains humidity at desired level 18.84% % % % Operates quietly 14.43% % % % Provides even temperatures throughout home (no hot or cold spots) 31.23% % % % Requires little routine maintenance 7.66% % % % / 20

8 air filtering Better 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q5 Relative to each other, please rank the following attributes you most want from a central heating and cooling system: Answered: 773 Skipped: Zoning Min. construction Quiet Long warranty Low EQ & install cost Low energy use Comfort Most desired Least disired Total Comfort 49.36% % % % % % % % Better air filtering (removal of allergens, odors, etc.) 7.54% % % % % % % % Long warranty (greater than 10 years) 6.03% % % % % % % % Low energy consumption 15.32% % % % % % % % Low equipment and installation cost 7.84% % % % % % % % Minimal construction/disruption to home 4.60% % % % % % % % Quiet operation 3.27% % % % % % % % Zoning capabilities 5.47% % % % % % % % NOTE: Respondents were asked to rank these 8 attributes relative to each other (i.e. a forced ranking) and not as stand-alone items 8 / 20

9 Q6 Placing HVAC systems into "Basic," "Better," and "Best" categories, please match the following attributes to the category you would most expect to include them. (Please choose a category for all attributes.) Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 742 Skipped: Customer Support Filtration Zoning Easily Repaired Basic Better Best Fresh/Outside Air Warranty Produces desired temp No drafts High SEER Tax deductible Energy Star Best tech avail. Program. Thermostat Monitoring & remote control No remodeling Long life cycle Low EQ cost Low install cost Low operating cost Maintains humidity level Min. enviro impact Quiet operation No duct leakage Even temps Little maintainence Basic Better Best Total Respondents Access to manufacturer customer support after purchase 45.75% % % Air can be specially filtered (e.g. higher rated MERV or HEPA filters) 16.22% % % Allows for more than one zone 22.33% % % Can be quickly and easily repaired in the event of malfunction 32.84% % % Can provide fresh (outside) air 30.22% % % Components adequately covered by warranty 34.15% % % Consistently produces the desired air temperature 32.30% % % Creates no strong drafts of hot or cold air when operating 30.14% % % Equipment has a high SEER rating 18.05% % % Equipment is eligible for rebates or tax deductions 26.15% % % Equipment is Energy Star rated 28.42% % % Includes best technology available 15.22% % % Includes programmable thermostat 28.90% % % (See more on next page) 9 / 20

10 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Includes whole-house monitoring or remote control capabilities 19.02% % % Installation requires no major remodeling/alteration to home's aesthetics 32.24% % % Warrantied life cycle of 15 years or more 19.22% % % Low equipment cost 38.16% % % Low installation cost 39.24% % % Low operating cost (monthly utility bill) 24.97% % % Maintains humidity at desired level 25.88% % % Minimizes impact to the environment 32.25% % % Operates quietly 28.18% % % Permits little-to-no duct air leakage 33.97% % % Provides even temperatures throughout the home (no hot or cold spots) 26.77% % % Requires little routine maintenance 30.60% % % Breakdown of Additional Comments (75): "N/A" or "None" (22) = 29.3% High-Tech Features (16) = 21.3% Reliability/Dependability/Quality (10) = 13.3 Filtering (10) = 13.3% Other (7) = 9.3% Aesthetics/space-saving (5) = 6.6% Energy Efficiency (3) = 4% EZ to find technicians/ez for technicians (2) = 2.6% Humidity Control(1) = 1.3% Zoning (1) = 1.3% 10 / 20

11 Q7 What information sources would you likely use to gather information about heating and cooling system products. (Please rate all sources.) Angie's List 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 731 Skipped: 389 Not likely to use 61.75% 444 May use 31.15% 224 Likely to use Total Weighted Average 7.09% Consumer product review publications/websites 6.32% % % Friends and family 9.05% % % "Google" search 13.26% % % HVAC association websites 28.14% % % HVAC blogs 49.93% % % HVAC distributor websites 31.40% % % HVAC manufacturer brochures, ads or other marketing material 23.76% % % HVAC manufacturer websites 18.98% % % HVAC trade magazines/newspapers 60.28% % % Local or preferred HVAC contractor 11.83% % % Social media (Facebook, Twitter, etc.) 53.46% % % / 20

12 Q8 What information sources would you likely use when choosing an HVAC contractor? (Please rate all sources.) Referral from previous customer 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 727 Skipped: 393 Not likely to use 4.97% 36 May use 48.62% 352 Likely to use Total Weighted Average 46.41% Referral from friend or family 3.46% % % Referral from other service professional (remodeler, plumber, electrician, etc.) 5.92% % % Internet search 16.50% % % Local advertising (Yellow Pages, etc.) 39.97% % % Contractor listing on manufacturer's website 24.86% % % Q9 How many HVAC contractors would you be likely to contact for bids and information? 100% Answered: 725 Skipped: % 60% 40% 20% 0% More than 5 Answer Choices More than 5 Responses 4.55% % % % 15 Total / 20

13 Q10 Please indicate your likelihood of purchasing products from the following central heating and cooling system manufacturers. Amana 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Not at all likely 21.44% 149 Answered: 707 Skipped: 413 Somewhat likely 36.40% 253 Very likely 9.21% 64 Unsure Total Weighted Average 32.95% American Standard 16.57% % % % Carrier 6.15% % % % Goodman 26.15% % % % Heil 22.82% % % % Hi-Velocity Systems 28.84% % % % Lennox 8.40% % % % LG 17.02% % % % Mitsubishi 19.40% % % % Rheem 11.82% % % % Ruud 19.51% % % % Spacepak 33.48% % % % Trane 5.71% % % % Unico System 24.71% % % % Uponor (Wirsbo) 31.89% % % % Weil-McLain 28.92% % % % York 14.08% % % % / 20

14 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q11 If you chose "Very likely" to buy products from the manufacturers listed in Question #10, please list any attributes that come to mind for that/those manufacturer(s) (e.g. Manufacturer X = quality, Manufacturer Y = dependability, etc.) Please list as many attributes or descriptions as you would like. Answered: 357 Skipped: 763 Q12 Are you aware that some utility companies provide rebates for energy efficient HVAC systems? 100% Answered: 710 Skipped: % 60% 40% 20% 0% Yes No Answer Choices Yes No Responses 78.31% % 154 Total / 20

15 Q13 If you are considering replacing an existing or installing a new central heating and cooling system, please indicate your chief reasons for doing so. (Please choose all that apply.) 100% 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 594 Skipped: % 60% 40% 20% 0% Current system failed/is failing Current system requires suppleme... Do not currently have central... Wish to replace current system... Wish to replace current system... Other (please specify) Answer Choices Current system failed/is failing Current system requires supplemental solutions (e.g. space heaters & window A/Cs) Do not currently have central HVAC Wish to replace current system with/add new energy efficient system Wish to replace current system with/add new technology Other (please specify) Responses 31.14% % % % % % 146 Total Respondents: 594 Breakdown of "Other" responses (146): "N/A," "Satisfied w/ Current," or "Not Considering" = 104 (71.2%) Advanced Age of System = 10 (6.8%) Comfort Deficiencies w/ Current System = 9 (6.1%) Waiting for Current System to Fail (or more than 1 year) = 8 (5.4%) Energy Efficiency Issues = 5 (3.4%) Don't Have/Want to Add = 4 (2.7%) Need for New Build/Addition = 4 (2.7%) 15 / 20

16 Q14 Will you specify a particular central heating and cooling product OR rely on your installing contractor's recommendation? 100% 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 689 Skipped: % 60% 40% 20% 0% I will specify a specific product for installation I will defer to my contractor's recommendation Other (please specify) Answer Choices I will specify a specific product for installation I will defer to my contractor's recommendation Other (please specify) Responses 34.54% % % 119 Total / 20

17 Q15 When will you begin gathering information on new heating and cooling systems? 100% 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 695 Skipped: % 60% 40% 20% 0% Not until current system fails 3 months or less before decision to purchase 3 months to 6 months before decision t... 6 months to 1 year before decision to purchase 1 year or more before decision to purchase Answer Choices Not until current system fails 3 months or less before decision to purchase 3 months to 6 months before decision to purchase 6 months to 1 year before decision to purchase 1 year or more before decision to purchase Responses 37.41% % % % % 122 Total / 20

18 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q16 What incentive could a manufacturer provide that would make you want to replace an older, existing (working) system now? Answered: 585 Skipped: 535 Breakdown of Motivating Incentives: "N/A," "Nothing," "Free," etc. = 178 (32.6%) Lower Operating Costs/Energy Efficiency = 30 (5.5%) Extended Warranty = 54 (9.9%) Pricing Incentives = 348 (63.8%) - Discounts = 168 of 348 (48.2% of Pricing Incentives) - Rebates = 158 of 348 (45.4% of Pricing Incentives) - Financing = 52 of 348 (14.9% of Pricing Incentives) - Buy-Back = 6 of 348 (1.7% of Pricing Incentives) 18 / 20

19 Q17 Please rank the relative importance of the following obstacles to your purchase of a new heating and cooling system. (Please choose all that apply.) Cost of operation (monthly bills will increase) 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Answered: 693 Skipped: 427 Not important 6.52% 45 Somewhat important 29.28% 202 Very important Total Weighted Average 64.20% Disruption of home's space and aesthetics to fit ducting 22.35% % % Equipment and installation cost 1.16% % % / 20

20 2017 Residential Heating & Cooling Study: Old Home Enthusiasts Q18 Please provide your to be entered into a drawing to win a $200 Visa gift card! Answered: 691 Skipped: / 20