How Do Incentives Help Increase Market Share in the HVAC Industry?

by: Mark Herbert October 5, 2021

Those in HVAC markets face an increased need for competitive differentiation compared to other B2B industries. According to an International Energy Agency (IEA) report, demand for air conditioning in particular is expected to soar over the next three decades, “becoming one of the top drivers of global electricity demand.” The race to supply this demand will feature both innovative, energy-efficient technology and increased production, making it more difficult for manufacturers to increase market share.

Another major contributor to an HVAC manufacturer’s competitive situation is the fact that most distributors and/or contractors have no incentive to work with any one particular supplier. HVAC manufacturers are all bound to international or regional energy and conservation codes—such as those developed by the U.S. Department of Energy and ASHRAE—to ensure a minimum performance efficiency. This can make it difficult for distribution partners to develop a vendor preference. In fact, Miller Heiman reported on a study that claims 68% of B2B decision-makers see little to no difference between vendors.

So, how can HVAC manufacturers connect meaningfully with channel partners and end-consumers to build brand loyalty and increase market share? A channel incentive program helps accomplish this in the following ways:

Incentive rewards give your brand personal relevance.

It’s not always easy for distributors, contractors, or end-consumers to develop a personal or emotional connection to an HVAC brand. But receiving rewards can result in powerful psychological impact and lasting emotional response.

  • Instant gratification

    Psychological studies reinforce the theory that “the subjective value of reward decreases with increasing delay to its receipt.” In more general terms, when the consequences of one’s actions are delayed, they decrease in value and are less effective in controlling ongoing behavior.”

    It’s best to use incentive software that can speed up the reward earning and delivery process. For example, a document upload and authentication tool allows your contractors to submit warranty registrations, invoices, and other sales claim documentation instantly to an online incentive program. You can then immediately authenticate their claims and trigger a delivery of reward funds or points.

  • Method of reward delivery

    The context and type of reward you offer can greatly impact how the reward is perceived. As a biometric study by The Incentive Research Foundation (IRF) found, individuals’ physical responses to a reward’s presentation vary depending on gender, age group, job title, and other factors.

  • Type of reward

    Different reward types have different psychological and emotional impact. Take cash, for example: though people often cite it as the reward they’d prefer, behavioral studies tend to show otherwise. Behavioral scientists theorize that tangible, non-cash rewards have more emotional and social significance to the recipient, which makes them more effective.

An incentive program creates loyalty and brand recognition among end-consumers.

End-consumers often have little reason to think about their HVAC unit’s manufacturer. What reasons they do have are often negative, unfortunately, such as problems with the product. By offering an incentive program, you can give end-consumers more positive reasons to interact with your brand.

When you offer an open-enrollment incentive program, you can invite all end-consumers to sign up to earn rewards. Rebate rewards make a great idea end-consumer reward. You could also offer reward points for scheduled aftermarket or maintenance appointments—points they can then spend in a catalog with millions of merchandise items, along with your own products.

Along with providing end-consumers open access to your incentive program, you can reward distributors, contractors, and/or installers for specific interactions with end-consumers. Reward contactors for scheduling aftermarket appointments, registering warranties, collecting additional household/building system information, signing end-consumers up for a mailing list, or other exchanges that help you collect end-consumer data and build sales and marketing strategies that increase market share.

Incentive software can expand and scale, adding steadily to your revenue growth.

Incentive software isn’t limited to simple reward delivery. Rather, you can utilize an advanced incentive platform that’s as flexible and multi-functional as a sales and marketing system. A few examples of features that make an incentive program scalable:

  • Segmentation and automation help you include a larger audience without sacrificing personalization. You can divide your channel partners into segments according to channel partner type, region, performance level, or organization. Once the groups are created, you can develop specific goals and messaging for each, so they all have a relevant and useful experience with your program.
  • A training incentives feature helps you add more reward-earning opportunities that benefit your business. Upload multimedia training content—text, .pdf or audio files, and videos, for example—and quiz incentive program participants on their product knowledge. When they pass these quizzes, they earn rewards, giving them additional incentive to further their training by making it engaging and exciting.
  • On-the-spot rewards allow you to expand the definition of reward-earning behaviors. In addition to rewarding through automated processes, you can give managers the ability to administer physical or digital reward certificates for anyone exhibiting any positive behavior, at any time.

Scalability means that not only can you enjoy sales growth from your incentive program’s success, you can learn from that success and multiply it.

As rising worldwide demand complicates the HVAC industry, manufacturers don’t have to face the influx of competition unprepared. Adding an incentive program to HVAC sales and marketing strategies gives speed and strength to those strategies, helping them achieve goals faster, establish more solid competitive differentiation, and increase market share.


About Mark Herbert

Mark Herbert is President and CEO of Incentive Solutions. He has more than 30 years of experience overseeing business operations within the incentives industry, helping companies increase channel sales, build customer loyalty, motivate employees, and grow their business.