Voice of Contractor Survey Highlights

For the fourth year in a row, HARDI has partnered with Farmington Consulting Group to conduct a national survey of HVAC/R contractors to better understand their buying preferences and direct distributors to best respond to the changing business environment. 1,222 HVAC contractors completed the online survey administered by FCG in October and November of 2023. The entirety of the raw results and subsequent analysis are included in the annual HARDI State of the Channel Report.

This year’s survey yielded some key insights into the changing sentiments of contractor preferences:

Contractor Financing Trends in HVAC/R

Despite its benefits, financing remains underutilized among HVAC/R contractors, with only 62% offering it as an option. Concerns about increased costs and lack of resources slow the adoption of contractor financing. Financing is, unsurprisingly, offered more for new or replacement systems (offered 70% of the time) than repairs (23%).

Source: HARDI State of the Channel Report

Financing trends are fairly balanced on a regional level, with between 61-64 percent of contractors in most HARDI regions offering finance. However, the Mid-Atlantic and Northeastern regions break apart from the group. These disparities likely stem from differences in the demographics of respondent groups across regions. For example, the Mid-Atlantic region has the highest percentage of younger contractors (below 45) and the Northeastern region has the highest percentage of older contractors (45 and above). Notably, younger contractors are more likely to offer finance than older (74% vs. 58%). Along with this, residential contractors are far more likely to offer finance than nonresidential (67% vs. 50%), and larger contractors are more likely to offer it than smaller contractors (73% vs. 60%). While these percentages offer useful insights into behavioral variation by region, they also show that a large portion of contractors are still not offering finance to customers.

While the reasons why contractors aren’t offering finance are varied, interviews with contractors reveal several consistent themes explaining why they don’t offer finance. Contractors frequently state that they don’t know enough about it [finance]; they don’t have the people or time to make it readily available; and they think it will increase costs too much.

The following quotes illustrate these themes more clearly:

“I don’t exactly know how to sell it, I never really got any support with it, and the rates are all over the place. I could never really figure out how to build it into the cost.”

“I feel the dealer handling fees are unfair. I go out and get the customer and do all of the leg work, and spend hours doing this. Then the finance company has dealer fees that they charge me. A lot of the time the customers can find better rates themselves.”

“The price of financing is a major factor in not offering it 100% of the time, costs of financing are usually extremely high which turns customers off”

“There is a need for financing with the rising costs of equipment, but I feel like I’m not getting enough support to start using it.”

Contractor Preference Shifts: Territory Managers

Moving beyond trends in finance, our latest Voice of Contractor survey reveals a notable shift in contractor preferences has appeared, with Inside/Counter salespeople gaining higher influence over territory managers in purchasing decisions for contractors. This shift is statistically significant and could be attributed to changing business conditions post-pandemic, signifying a normalization of consumer behavior and a return to pre-Covid norms. Despite the overall shift in contractor sentiments, half of all larger-sized contractors still designate their territory manager as the distributor personnel with the highest influence over their purchases. A shift in preferences related to the desired frequency of TM visits is also shown in the survey results. Contractors want to see their territory managers less frequently overall, but the majority of larger contractors still want to see their territory manager at least once a month. In terms of services that contractors value from their territory managers, contractors most want their TMs to keep them informed about industry changes, sales promotions, and available purchase incentives. Additionally, pre-sale application guidance holds significance among commercial HVAC and refrigeration contractors. Younger contractors ranked “being a business consultant” much higher than older contractors, which suggests a generational shift in preferences. Contractor sentiments further highlight the growing reliance on Inside/Counter salespeople for industry knowledge and support:

“Counter personnel are key points of contact that are super well informed and have great knowledge. It saves a lot of time and effort to get quick answers and guidance from them. A well-informed sales team or distribution team is extremely valuable to our business.”

“[Counter personnel] are the ones we have the closest relationship with, and the people I have established relationships with know your business. You actually become friends and know they have your best interests at heart. I rarely see Territory Managers, they're just salespeople.”

“Covid gave contractors a tighter knit group, instead of having a large territory manager to cover the whole section, they have it more individualized now”

HARDI's 2023-24 State of the Channel Report

The Voice of Contractor survey uncovers crucial insights into HVAC/R contractor preferences to guide distributors in navigating industry shifts. If you are interested in viewing the full results and analysis of our Voice of Contractor survey, be sure to purchase a copy of our State of the Channel Report.

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