Contractors benefit from offering home water treatment services
Untapped opportunity in home water treatment.
A plumbing company found that adding water treatment services led to an additional 25% in revenue, including additional yearly market growth. For plumbing and HVAC companies looking for a new business segment to engage in, the home water treatment market has a number of factors that will make this a profitable endeavor. Currently, a convergence of economic and technological support has made water treatment a teeming market of opportunity for service providers looking to augment their service lines with water treatment installation and maintenance services.
For illustration purposes, an HVAC or a plumbing company that operates with $500,000 in sales could see an additional $125,000 in sales. The American residential home water treatment market was valued at $1.9 billion in 2014 (bit.ly/2dQHTLL) with recent numbers estimating the demand to grow at 5.9% per year (bit.ly/2dD15fN). This signals an ample opportunity for service providers to be part of a growing trend in consumer awareness — a need for healthy and sustainable drinking water. Inevitably, there are costs to starting such an endeavor but given the opportunities and insights from a company that has navigated the journey, the opportunity remains ripe for businesses looking to diversify and expand their revenue streams.
Home water treatment helps improve the quality and taste of tap water available to residents, and homeowners are willing to pay good money for cleaner, safer water — especially when they see how much time and money they can save over buying bottled water. Existing service businesses can plug into this opportunity by investing in identifying product vendors, product training, customer service, showrooms, and cross-selling to existing clients during onsite visits.
Water treatment equipment comes in a full array of product options to ensure clean and quality drinking water for residents. Service providers could offer significant value to residents by selling, installing, maintaining and repairing water treatment products, including reverse osmosis systems, water softeners, single/multi-step filtration, and time-clock/automatic softeners.
“Green Generation: Millennials Say Sustainability is a Shopping Priority,” a Nielsen global online study, highlighted how younger generations will lean toward making choices that are environmentally friendly (bit.ly/2e2RfSu). Younger homeowners will continue to look for a healthy and sustainable water alternative. This means market growth doesn’t tell the whole story. Consumers are going to care more about the quality of water they are drinking and the environmental footprint it creates. These two factors point to a greater preference toward water treatment systems that will continue to take demand from the traditional bottled-water market.
Learn from a provider
WaterSmart Systems and Plumbing is a company that offers both plumbing and water treatment services and has created a thriving service line from adding home water treatment installation and repairs. For business looking for inroads into this market, here are some considerations to make and tactics to utilize:
Create product specialists and cross-train: Designate specific members of your team to be the subject matter expert on different suppliers and their equipment. To ensure coverage during holidays or downtime, cross-train your team on more than one product and have the specialists take on “apprentices” to get other team members up to speed.
Have a go-to list of water treatment suppliers: It pays to do research on a number of top water treatment suppliers and to analyze supplier quality based on product reviews, service support of the manufacturers, and shared values between the team and the vendors. If possible, businesses should select their top three vendors to partner with. It is important to know which company to recommend based on their product positioning and specialization in point-of-entry versus point-of-use products. This clarity will help position your team to recommend the right products for your customers.
Invest in certification programs: Some suppliers may have certification programs, and having your top three picks of suppliers recognize you as a certified service provider will help build consumer confidence.
Industry affiliations: This will help create connections and build customer trust. Groups such as the Water Quality Association help set and maintain standards that will affect your business.
Cross-selling when onsite: All your existing residential plumbing customers could be potential buyers of a water treatment system. This can be done by arming your technicians with the facts and benefits of using water treatment and offering to test the quality of the water. This can lead to a meaningful sales opportunity that can be leveraged to introduce the new service.
Tell the consumer about the environmental benefits over bottled water: Raising social-responsibility awareness in consumers is a key aspect of confirming to the customer that they are making the right decision. The environment does have an impact on the purchase decision, especially for younger generations. Currently, we see that the environmental impact is usually an important factor for those younger than 40.
Highlight cost savings to consumers: Without knowing, our clients were spending significant amounts of their monthly income on bottled water when fuel and cooling costs are factored in. When customers are given the right information to make an informed choice, it is ultimately to their advantage.
Set up a showroom: Have demonstration units in your store and order products once customers are confirmed. Having water treatment products on display along with demonstrations helped spark conversations with customers coming to our stores. When costumers considered purchasing a system, they would naturally ask us to help install, maintain, and inspect the unit in their home. Using your existing storefront or office can help you connect consumers to the need for a new service or product.
Companies should work with suppliers to determine lead times required to place an order, receive the product, and dispatch a technician. This will help your sales team communicate the length of the process and ensure expectations are set upfront. Once a steady demand emerges, businesses can consider purchasing arrangements for regular orders with suppliers and work to fine-tune their processes for greater efficiency.
Partner with a technology leader: U.S. business can benefit from the water-treatmentinnovation in Canada. The province home to the Great Lakes is a hotbed for water technology innovation; WaterTAP relays that more water patents have been issued in Ontario than any other comparable jurisdiction in the world.
This means that the technology available continues to improve, ultimately providing your customers with better-quality drinking water without having your team invest in innovation of the treatment equipment. For U.S. businesses, having a technology partner offering world-class water treatment equipment can help you bolster your position.
Pitfalls to avoid
Here are some potential pitfalls you may run into and how to avoid them:
Lack of aftermarket service: One of the biggest challenges with companies entering the water treatment market is the lack of aftermarket service and follow-up. If customers are relying on referred products, be sure there is capability to repair or maintain them. All water treatment equipment will need service at some point. Many companies fall short by offering equipment but never follow up with service because they don’t know how to fix it.
Not knowing the warranty details of the equipment you are selling: Technical issues that arise in water treatment equipment will occur, and knowing what items are covered under warranty can help consumers get the most satisfaction from their purchase. As an up-and-coming adviser in water treatment products, knowing the usual breaking points of equipment and advising your customer upfront is the best approach.
Lack of awareness for home water treatment: This is a real challenge that the entire home water treatment industry faces. This issue can typically be summed up as a contest of marketing engines. Bottled water is far better at marketing its products than the water treatment industry. Leveraging any resources provided by your equipment supplier (including, videos, sales brochures, and infographics) will go a long way in helping your prospects and clients make the right choice for their homes.
This article was originally titled “Untapped opportunity” in the November 2016 print edition of Plumbing & Mechanical.