2023 Was a Challenging Year for HVACR Businesses

Many HVACR businesses flourished during COVID, but in 2023, many of us experienced a flat  down year. During the pandemic years of 2020 through 2022, we had a somewhat captive audience. Consumers were working from home in record numbers.  Much of the population was receiving government stimulus money. This led to homeowners realizing their homes were not very comfortable. Indoor air quality products became sought-after items to protect and clean the air in our homes. This drove consumers to replace systems prematurely in some cases and to add additional home comfort products, such as smart thermostats or IAQ items. This fueled the fire that led us to where we are at the beginning of 2024.

How Have the Consumer and the Market Changed?

The consumer is under many stress factors in 2024. Inflation is “real” for all consumers today. The cost of everything has risen dramatically, from luxury items to everyday consumables. HVACR equipment costs have doubled with inflation, SEER2, and new refrigerant changes coming.

Jeff Buresh, VP – Value Added Distributors.

Interest rates have skyrocketed, and many consumers cannot get approved for financing these days. So, we now have homeowners choosing to repair versus replace. Just a couple of years ago, homeowners upgraded to a higher efficiency system instead of repairing them. Now, contractors are seeing consumers getting multiple estimates for equipment replacements and even repairs. ‘I’ve had several owners tell me that existing maintenance customers are checking prices when a replacement system is needed. They are also asking their current service provider to match other companies’ prices. It seems loyalty has diminished in our current economy.

Do You Need to Revamp Your Marketing in 2024?

So, do we need to revamp our HVACR marketing in 2024? That is a multilayered question that requires some thought and analysis.

Where is Your Business?

Let’s first look at your business. Look at these factors when determining your marketing budget and mix:

1. What are your goals, short-and long-term?
2. How long have you been in business?
3. What is your target demographic (age, income, rural or metro)?
4. What type of growth are you looking for?

The answers to these questions will determine your marketing or advertising mix.

What is your mix between digital online advertising (organic and paid), traditional (radio, TV, billboards), social (organic and paid), and grassroots (sponsorships, community involvement)? Let’s look at some examples:

1. The industry typically invests 3 to 5% of gross sales into marketing. If ‘you’re looking to grow at an accelerated rate, 6 to 10% would be more appropriate.
2. A newer business under five years in operation will need a stronger presence with online paid ads on Google or other search engines. You should direct at least 60% of your budget toward paid ads.
3. A more established business with a larger customer maintenance base can look at more traditional or organic marketing for paid advertising. We see a more even split or leaning  toward branding through TV, radio, billboards, and community involvement.

Marketing back to your customer base is key. Your HVACR company must remain top of mind with your current customers. No matter the size or age of your business, you must market it to your existing customers. Acquiring new customers is quite expensive these days, so we must do everything within our power to keep them. How do you stay “top of mind” with your base?

1. Email marketing (newsletters, birthday cards, anniversaries).
2. Outbound calls (During the shoulder seasons).
3. Happy Calls after service, maintenance, or a new installation.

Often, a marketing campaign’s success depends on the creative and the offer.

So, how do we address what is not working and how to enhance what is?

Whether you handle your marketing internally or through an outside agency, you need to review your metrics. What is working and what is not? Monthly reporting is a must for marketing campaigns. Once you know the best platforms that work for your HVACR business, you can pivot when needed away from ones that are not providing quality or reasonably priced leads.

Tracking Your Results or Metrics

Digital Campaigns

You should keep a close eye on your marketing platforms. Today’s digital platforms, such as Google Search, Display, Performance Max, and Local Services Ads (Google Guaranteed), provide great metrics to measure performance. A lot of HVAC businesses and agencies look at Impressions or click-through rates, but the real identifier of success for an ad campaign is conversions. These are tracked as a phone call or website form submission from the ad. Conversions ultimately lead to new customers. 

Traditional Campaigns

Traditional advertising is designed for brand building in our industry. It’s all about driving your message and keeping your business top of mind in the marketplace. The media companies will be able to provide you with broad stroke measurements for your campaigns. These include reach, frequency, household penetration, viewership and listening. Ultimately, traditional campaigns support your digital campaigns in 2024. Remember, people do not think about their heating or cooling system until it no longer works. Traditional platforms provide branding and awareness, so when it does break, they call you. Unfortunately, consumers don’t call after hearing a radio ad or seeing a TV spot. They remember it when searching online, so ultimately, the digital stuff usually takes the credit.  

The Offer

The offer is crucial for the success of your ‘company’s marketing plan. Remember, consumers are not thinking about their heating and air conditioning until it breaks. We often see HVACR contractors leading with offers such as “$500 off a new system replacement” or 10% off a new installation. Consumers do not know what it costs to replace their heating and air system today. We all know it costs much more than just a few years ago. Ultimately, they are not thinking about replacing it. The decision to install a new system is typically failure-driven.

Service or Tune-up Offer

Our organization has tracked the performance of HVACR offers for years. The consumer is looking to repair their heating or air conditioning system first. This is why promoting what the consumer wants first works the best. Here are some examples:

1. $25 Off Repair.
2. $99 Heating or A/C Tune-up.
3. 0% Financing (Financing is a great ancillary or backup offer).

The Creative or the Look and Feel

The creative really makes the offer work. You can have a great offer, but your results will be diminished if you poorly execute the creative. Your company must convey a professional image to your target audience and give them what they want. What do they want from your service business, you may ask? They want to have trust in your company. They need value in their purchase. The most important one of all is fixed now or same-day service.

Good and Bad Examples of Creative

1. Billboards: You should have no more than seven words in your message. We see billboards all the time with so much wording that you have no idea what they say.
2. TV or Radio: Don’t try to cram too much into one commercial. Keep it short and sweet, promote your offer or brand your company. Consumers can easily be confused.

Search Engine Optimization from 2023 to 2024

Let’s take a look at how things are changing …

Core SEO Updates

• Re-evaluate Your Keywords: The foundation of SEO is keyword research. Ensure your keywords are still relevant to your target audience and not too competitive. Tools like Google Keyword Planner and Ahrefs can help in identifying better-targeted keywords.
• Improve On-Page SEO: Review and optimize on-page elements like title tags, meta descriptions, header tags, and images (with ALT text). Ensure they are keyword-rich but not overstuffed.
• Update and Upgrade Content: Audit your existing content. Update outdated posts, improve low-performing content, and ensure it is valuable, informative, and answers your audience’s queries. Adding new, high-quality content regularly is also crucial. 
• Enhance User Experience (UX): A site with poor user experience can hurt your site’s SEO. Ensure your website is easy to navigate, has a fast loading speed, and is mobile-friendly. Google’s PageSpeedinsights can provide information about page speed and user experience issues—Source: Caleb Rogers, SEO Specialist at Effective Media Solutions.

These can be simple changes and updates that will have long-term positive results.

Google Updates

• August 2024 Core Update: This broad update, completed in September, aims to reward high-quality content across all languages and regions. While it doesn’t directly penalize pages, it may cause ranking fluctuations as Google reassesses content value.
• December Link Spam Update: This December 2023 update, still underway, targets unnatural “link spam” tactics like excessive guest posting or paid links. Sites engaging in such practices may experience ranking drops.

With the development of AI in content creation, writing quality content is just as important as ever. As search engines improve their ability to deliver accurate results after the first search, making sure you have the content your customers are looking for should be your priority.

Jim Gregory, Digital Marketing Director at Effective Media Solutions.

Performance Max

Performance Max was introduced as a beta in November 2021 and is gaining traction in our industry.

With AI and machine learning in full force, Performance Max isn’t something to ignore any longer. Pmax uses Google’s machine learning capabilities to drive more conversions across all of ‘Google’s owned inventory (Search, Display, YouTube, Discover, Gmail, & Maps). Above all else, Google needs data to help Pmax campaigns run effectively. For lead gen, data is the one place we lean in further and heavier. For example, Pmax can only measure how many phone calls or form submissions you get, but it ‘doesn’t know how many led to good, great, or bad conversations. Teach Google what works for your business by adding offline conversion imports. Over time, Google starts to see that the good ones come from certain geos or share certain audience signals. 

Steve Kottra, Jr. – Paid Search Manager at Effective Media Solutions.

In Conclusion

Tried and true tactics still reign supreme in the HVACR industry. We must do the blocking and tackling first, which is answering the phone (even after hours), providing quality customer service, and following through on our promises to our customers. And we must be open to how the marketing platforms and customers are changing. Be open to new ideas and track your results. It will help your company prosper during the good times and persevere through the difficult times.

Will Merritt
Managing Partner
Effective Media Solutions

HVAC Marketing Company
(704)507-7858