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How to Sell More HVAC Units through Warranty Changes?

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The primary goal of a manufacturer is to enable more revenue, through product sales, and whenever possible, through services and service contracts. With standard quality products, dependable service is always a winner in the manufacturing sector. Selling more products becomes easier when your company builds the reputation for reliable, cost-effective services for the products. This is true especially for HVAC products, which need servicing almost every year.

Opportunities in the HVAC sector

The HVAC sector has huge aftermarket opportunities. Service is required frequently. If you supply heating and ventilation products to offices and homes, you are part of a market growing at 3.8% annually since 2010. That is a trend expected to continue till 2020, during which the US GDP will be growing at 2.2%. Market experts unanimously say the demand for service from HVAC companies is likely to go up very noticeably. There is no doubt 2010-20 is an important time to elevate your brand image by providing efficient services besides quality products.

Where do you stand now?

Long-term service contracts, especially with businesses, might be fetching you service opportunities and product sales regularly. However, it is important that you improve your service and its efficiency to increase your reliability. It is not beneficial that some customers get repairs done through independent mechanics and choose another brand when they want a new HVAC system. Most domestic HVAC owners prefer to call neighborhood maintenance services, because they are quicker. The question that every business should ask itself is, “Are we positioned to address that gap?” If you want HVAC customer to use your warranty system, you have to position it locally and closer to customers. You then need to have an online system accessible to customers. That will surely improve revenues, especially with the support of localized marketing channels.

Can you feasibly improve your warranty services?

Improving your warranty service usually seems unfeasible. Estimates tend to discourage manufacturers from taking steps to improve service turnarounds and revenue opportunities. However, customer experience is the crux. It is essential to build your system around customers to meet all their needs.

Overheads can be reduced with the help of a technology-driven solution, which verifies claims accurately and facilitates cloud-based mobile communication between your service teams and headquarters. This can mitigate the very cost required for quick and dependable aftermarket services.

Solutions that technology can offer

Reduction in service delays and overheads are important to achieve for HVAC manufacturers to ultimately sell better. The total warranty-service cost incurred can be reduced by technology through automation of claims-validation and cross-functional integration. Long-term savings can be achieved through continuous improvement with the use of system data. Parts replacement and repair turnarounds must shrink to allow better customer experience for HVAC users. Cloud-based warranty systems will help manufacturers as customers increase.  Cloud-based systems have many advantages:

  1. They are easy to scale up or down according to business fluctuations. You just need to pay according to the volume of use.
  2. You don’t have to invest heavily in infrastructure or tools. The vendor takes care of them.
  3. You will get access to the latest technology without having to invest heavily on R&D. Your vendor will take care to provide the newest technology.


Cost-effective service can be provided when you have local service units, seamless connectivity with them, real-time updates, lower travel overheads, and integration with sales, service, and management. This also helps in achieving better understanding and evaluation of performance.

An example of how warranty technology can reduce costs

In 1992, warranty costs at our company for replacement, IAQ, and accessories installation work were about 2.5% of installation revenue. Beginning in 1993, we implemented a comprehensive installation quality control process for our retrofit work and realized immediate and dramatic improvement in our retrofit installation warranty costs, as well as in all of the areas noted above. By the end of 1994, we had reduced our installation warranty cost to just over 0.5% of revenue and had added a full percentage point to the bottom-line profitability of our retrofit installation work. – Jackie Rainwater, writing for Peachtree Heating and Air Conditioning

Cost-effective implementation of technology

The warranty technology or system should have low implementation cost and quick deployment turnaround. Implementation of ‘surround-not-replace’ and agile development practices have made IT implementation affordable. The already-existing software systems with HVAC manufacturers need to be “surrounded” with features and resources that enable cost-effective and high-quality warranty improvements; they need not be replaced.

That is the first step to making warranty improvements feasible. Once better service is easier to provide, brand value and sales will see quick improvements

Note Register for our upcoming ‘Building a Best Practices Warranty Management Program for 2016 – And Beyond!’ webinar by Bill Pollock and Rohit Lohan to learn how to manage your warranty costs better.

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