Tract housing arrived after the war, and with the tract housing came the furnaces. Soon, hydronics became a much smaller percentage of the American heating market and it’s been that way ever since. It’s a stable, profitable gem of a market, but one without great growth.
Marianne and I live in a home that used to have radiant heat, one of the Levittown-style Cape Cods that dominated Long Island home building during the late ‘40s and early ‘50s. That radiant system lasted 20 years and the previous owner replaced it with copper fintube baseboard.
Twenty or so years ago, radiant was reborn in America with the advent of flexible tubing. The cable TV shows and home-style magazine articles drove the business back then. The Radiant Panel Association formed to take advantage of the attention radiant was getting, but there has never been enough money available to get a truly effective, “Got Milk?” sort of campaign going for radiant heating in America. And so far, there has been no formal, scientific testing of radiant heat against other types of heating systems to prove that radiant heating systems save fuel, and how much. The claims are just that.
So people who know how to sell heating systems have been selling radiant systems based on the comfort it delivers. Few contractors want to promise any energy savings in writing. And many contractors don’t know how to sell, so they wait for homeowners who have done their own research to ask them to install radiant heating. This is marketing by waiting for phones to ring.
I think there are two basic categories of contractors in America. The first I call the Grandpas. These contractors will always wait for someone else to try the new products and piping techniques. They rarely follow the trade journals, and they have no time to spend browsing heating-related Web sites. They like to do things the old and proven way. Change is a pain in the butt. Grandpas make up the majority of the heating industry.
The other category of contractors is what I call the Boutique Shop Owners. Boutiques are at the cutting edge of everything that’s new and exciting, and they usually know more than most wholesalers because they are zealots when it comes to saving energy and being green and getting their price for the best systems available. They also like to argue, and because of this, they often don’t do as well as the Grandpas, but they sure are smart.
In 2008, radiant is part of the mainstream and even the Grandpas accept that it works. Grandpas are starting to pump away from the compression tank, and they’re looking at primary-secondary pumping and outdoor reset. They’re still not sure about variable-speed pumps and modulating-condensing boilers, though. They will accept these in time, but then the Boutiques will be on to something even newer. We’ll always have Grandpas; and we’ll always have Boutiques who are willing to argue with everyone.
This yin and yang is one of the reasons why there has been no meteoric growth of hydronic heating in America. Homeowners get more than one price, and that process puts the Grandpas and the Boutiques in constant conflict. One says one thing while the other says the opposite, and neither group is very good at selling.
Grandpas will wait for the people to tell them what they want, and afterwards, they’ll wait for that customer to recommend their next customer. They revel in word-of-mouth advertising, and they love the path of least resistance. When times are tough, they’ll lower their prices.
Boutiques advertise by speaking gibberish that only other Boutiques can understand. I once asked a group of Boutiques what they like to talk to potential customers about, and one said something that I wrote down: “I like to talk to the people about triple-pass boilers, indirects, condensing boilers, and outdoor reset. Unfortunately, they don’t like to listen.”
And why don’t they like to listen? Because they have no idea what the Boutique is talking about.
We get about 5,000 unique visitors each day to this site. Many of these people are homeowners and most of these folks lurk. I know they’re there because I can see them in the statistics, and they write to me, asking me to recommend contractors. I always send these people to the Find a Professional section of this site, but here’s an interesting lesson I learned along the way.
Mostly Boutiques advertise in Find a Professional, and when they write their ads, they focus on product features. They don’t talk benefits. They rhapsodies about a recent job in which they installed proportional/integral/derivative controls and stuff like that. They’ll name the boiler they used by model number but never say why they used that boiler, or what it means to the homeowner. They go on and on, not realizing that their audience is a homeowner, not some other Boutique. They do this because they are very proud of their work, but they’re not communicating with the potential customer.
I used to rewrite those ads, adding words of explanation to each technical thesis, explaining what was in it for the customer. I would coax out the benefits from the myriad features and make those ads sing. I thought I was helping.
And here’s what happened: A year would go by and it would be time for one of the Boutiques to renew his ad. I’d get in touch with him, and in most cases, the Boutique would tell me that he didn’t want to renew his ad. I’d ask why and he would say, “Oh, the ad brought in lots of leads, but when I’d go to see them, I’d find that they were all tire-kickers. They weren’t ready to buy.”
That’s when I realized that I could change the ad but I couldn’t change the man. The ad generated the leads, but when the Boutique showed up on the job to make the sale, he went into his technical blah, blah, blah, blah, and that probably sent the prospect out in search of a Grandpa.
I think it’s time Grandpas and Boutiques learned how to sell, but I’m a dreamer when it comes to this.
The hydronic replacement business is a good business, and will always be a good business, because everything mechanical breaks down and it’s relatively easy to replace like with like. Which is why the Grandpas are smiling.
But nowadays, because of the price of fuel, homeowners will be asking about high-efficiency equipment, which is why Boutiques are smiling. But the homeowners will also be expecting at least a 30% savings in fuel, and a payback period on their equipment investment of between two and three years. Don’t blame me for that. I’m quoting The Economist (“The Elusive Megawatt, May 8, 2008). And since few contractors – Grandpas or Boutiques – will promise that sort of savings or payback period, homeowners (and landlords with tenants who pay the fuel bills) will continue to wait until things break down. Back to the Grandpas.
And that’s why hydronics is a profitable, essentially non-growth, business. What might change this?
The Europeans had this same dilemma over the years, so some countries made it illegal to have anything other than a condensing boiler when the old beast fails. They took away the choice. You have to save energy. You don’t like it? Tough.
Never happen in America, you say? Why not? Our legislatures have already taken away the choice when it comes to water-wasting toilets. The people weren’t happy with that at first, but they’ve accept it. As long as everyone has to go through the same thing at the same time – as long as it appears to be fair – people will accept it. People are like that.
We said no smoking in the bars and restaurants and the smokers screamed at first, but then they accepted it. It’s the law.
I’d love to see us have an energy policy that actually saves energy. Maybe some day. Maybe next year.