Not too long ago, the primary competition for high-performance contractors was other contractors. To win jobs, you had to compete with the guy down the block whose work wasn’t on your level but was constantly undercutting you on price, or the new shop a few towns over that was spending a fortune on advertising.
In those days, the competition could be fierce but it was only coming at you from one direction and it was easier to stand out.
Today, things are wildly different. New breeds of competition are flooding the SERPs (search engine results pages) and vying for clicks. Homeowners are easily distracted by the growing number of options and, even though you offer a higher-quality, building-science-focused service, it isn’t immediately obvious to them that you’re the best choice.
Who are these new competitors?
Energy Circle has been monitoring the competitive landscape in the HVAC and home performance industries for years. We’ve identified seven types of competitors that pose a serious threat to high-performance contractors.
In this breakdown, we explain who they are and why they’re so successful.
New & Growing Competition
“Entrepreneurial” Contractors
When it was announced that the Inflation Reduction Act would be pumping money into the industry via huge rebates, a new breed of contractors emerged. We’ll call them entrepreneurial contractors to be polite, but they really are rebate chasers–companies built upon incentive programs. They may or may not do good work, but almost always have sleek websites and aggressive marketing campaigns.
Concierge Companies
Concierge HVAC and electrification companies are another new breed that’s quickly gaining traction. These are companies that are marketing themselves as a tech-based, modern alternative to traditional contracting businesses, which let’s face it, a lot of homeowners distrust. They offer a boutique-style experience where customer experience is the main priority, and they typically target younger, tech-savvy consumers.
Lead Sellers
Lead sellers like Angi have always been a problem, and they’re not letting up. Their strategy is to capture searchers who are looking for contractor services so they can steal leads and sell them back to you. They are fierce competition for organic rankings and paid ad space because they have resources, they have money, and they have highly recognizable branding that homeowners trust.
Directories
Directories are an interesting breed of competition because they can be both an ally and a competitor. Directories are similar to lead sellers in their marketing strategies—they capture searches looking for contractor services and funnel those leads to contractors.
Some, like Yelp, do more harm than good. Others, like Clean Energy Connection, are non-profit organizations that are genuinely trying to connect homeowners with high-performance contractors. This can help you if the leads they capture get sent your way, but it can also hurt you because they’re competing for the same attention you are.
Manufacturers
Some manufacturers, such as heat pump OEM’s like Mitsubishi and Quilt, market directly to consumers. They target searchers who are looking for heat pumps and pull in traffic that could be going to you instead. Then, they often farm the installations out to their contractor networks, or direct customers to their own contractor directories.
This can have pros and cons for contractors. If you’re in their networks, they’re likely sending you leads, but they’re also direct competitors for organic rankings and Google ads. Many of them, Quilt especially, focus heavily on the customer experience, the same way concierge companies do. They have sleek websites and position themselves as a modern, tech-forward alternative to a traditional contractor.
Financing Companies
Just like manufacturers, some financing companies are marketing directly to consumers. They are using Google ads and SEO to generate traffic so they can sell a financing package and then hand the work over to their partner contractors. A lot of these, like the National Energy Improvement Fund, are good organizations doing important work, but they’re still competing for space.
Spam Contractors
Spam listings are a constant battle for high-performance contractors. These “companies” create fake Google Business Profiles and try to collect contact information that they can then sell to other companies.
Differentiating Yourself Is the Only Way to Stand Out
In this new world, you have to differentiate yourself from the competition so homeowners see you as the high-performance contractor you are and understand why your company is the best choice. It’s the only way to succeed in a crowded market.
This year, Energy Circle has been spending a lot of time thinking and talking about differentiation for HVAC and home performance companies and we’ve put out a ton of free resources that you can take advantage of. In one of our first webinars on this topic, “How to Rise Above Your Competition: The Growing Importance of Differentiation,” we outlined some examples of the different categories of differentiation, and since then, we’ve been hosting webinars and publishing blogs going into detail on individual categories:
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Blog: “The Importance of Differentiation for High Performance Contractors”
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Webinar: “Why Contractors Need Branding: How to Use A Brand to Drive Business”
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Webinar: “Becoming the Trusted Advisor: Ways to Help Your Business Stand Out”
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Webinar: “How to Stand Out from the Crowd Using Building Science and New Technologies”
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