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Robert's Industry Observations, Part IV:
Copyright (c) 2007 Robert Bean, All Rights Reserved
Reprint this article, permission@healthyheating.com
People who read this page also visited:
Robert's Industry Observations, Part I
Robert's Industry Observations, Part II
Robert's Industry Observations, Part III
Robert's Industry Observations, Part
IV
Tower of Babble, Human Factor Design
How Much Does it Cost?
Making Radiant Systems Simple and Affordable
Skill Sets Required for Navigating the Future of
Hydronics
Random selection of Bean's replies to inquires
on the industry.
The hydronics industry is like
the asthmatic in a room full of allergens…the body reacts by
constricting the airways so it has to work harder to get the
oxygen but the air is contaminated so the harder the lungs work
the worse it gets. That analogy is a derivative of the Talmud’s,
‘We don’t see things the way they are, we see things the way we
are’. So rather than remove the allergens we're happy to declare
ourselves,” asthmatic” and medicate ourselves with the
strategies of the status quo.
(How's that for an opening remark...)
So what are the allergens…I’ve identified about 12 significant
ones – one of which is the basis for a discussion on simplicity.
Larry Drake has it right (always has) – and I agree with 99.9%
of what is said but the 0.1% is hardcore and that relates to the
opportunity for customization. I believe flat-out there should
be no customization in consumer products that need to be resold
back into the consumer marketplace and in fact it is
customization that is the DNA of the allergen preventing wide
scale adoption. I’ve never seen a job in 30 years that couldn’t
adapt itself to a catalogue of factory built hydronic appliances
– never. But I’ve talked with thousands of contractors who have
no issue with adapting their artistry to the job by claiming
it’s the "kind of job that needs customization". If you ask a
barber if you need a haircut what do you think his answer will
be…
Over the years I’ve had several wholesalers and manufacturers
ask me, “Bean, what we can do to make a difference?” My
reply…”stop selling components and only sell hydronic
appliances.” Their reply is indicative of the illness…”we can’t
do that – our competitors would eat our lunch”.
“We can’t do that” has been the industries motto for the past
three decades and in unprecedented growth in construction the
market share for hydronics went stagnant (Canada) or declined
(U.S.).
“We can’t do that” will also take the industry exactly to where
it is going in the future.
One of the other allergens I’ve addressed in the May/June 2010
issue of HPAC Canada – Modern Hydronics, is called Hydronics in
3D.
3D represents the industry problems created by
diversification, divergence and dilution.
I strongly support a targeted
consumer program such as CHC’s “Beautiful Heat”, but ultimately
it will be necessary to develop campaigns directed at each
filter stacked in the
illustration posted earlier. This is critical – we mustn’t
let any one program overshadow the need for other
campaigns...this has to be a D-Day program on many beachheads.
Why? Let’s say the CHC’s campaign increases consumer demand for
hydronics (and if launched - I have no doubt that it will) but
what if one or more elements up the hierarchy provides some
measure of resistance to flow through?
On a micro scale variation of the theme...it’s no different than
American contractors wanting European products available in only
50 HZ / BSP...a demand is created by visits to ISH or Euro
websites but the demand is insufficient to motivate change by
the manufacturers (can you hear the chorus of the Stones
classic...You Can't Always Get What You Want). In the example
given, replace American contractor with American consumer;
likewise 50HZ/BSP with hydronics and manufacturers with builders
and you now have the same problem just different products and
players but all in the very same game.
Here’s an internal roadblock: Radiant floor heating and cooling
is without a doubt the driving “brand” recognized by consumers
due to programs such as, “This Old House”, “Home Time”, “Holmes
on Holmes”, articles in Time Magazine, Forbes, Kitchen and Bath,
Radiant Flooring, Architecture, High Performance Buildings and
the ASHRAE Journal etc...this is great stuff for radiant but
funding a large scale promotion of radiant would be vehemently
opposed by the producers of baseboard, fan/coils, panel
radiators etc... even though the promotion (as Larry correctly
pointed out) would ultimately benefit all participants. This is
where Trade Associations are a double edge sword since decisions
must be made for the good of the association which trumps all -
even if it is detrimental to the hydronic industry growth.
The RPA and similar organizations got started by slipping out
from under the arms of the mainstream associations but the
individual members didn’t which means designers, manufacturers,
contractors, and distributers hold multiple memberships which
fund multiple association management groups, plus funding
multiple attendances at a plethora of trade shows and
conferences - all further diluting the critical financial mass
needed for a well funded multi tiered campaign. Only pain can
come from this, “one foot on the dock and the other in the boat”
syndrome.
As we have said before the money is there for a well funded
hydronics war chest…it was collectively spent in the past 25
years without growth in market share and will be collectively
spent in the future UNLESS the hydronics industry collectively
demands a return on it’s marketing and PR expenditures measured
purely in market share growth.
Put it this way…
1. if you were the CEO of a publically held conglomeration and
you spent hundreds of millions of dollars over 25 years
resulting in stagnation or decline – what kind of response would
you expect from the shareholders group if you plan on using the
same approach over the next 25 years?
2. If you were Churchill and Roosevelt and this was D-Day would
you have only created a strategy for Omaha when Utah, Gold, Juno
and Sword were also necessary? Heck even they cut a deal with
Stalin to make it work.
Industry needs to get behind not only the Beautiful Heat
campaign but create and support others targted at each of the
industry segments. Which is why the challenge is big,
comprehensive, coordinated, expensive and long term (at least
seven years in my estimation)… and it requires an Allied force
that deliberately disbands after a set objective - otherwise it
could become a victim of its own success...(read United
Nations). Will it happen? Yuck yuck...- unlike the reporting’s
of stocks – the status quo always reports, “past performance is
in fact a good indicator of future performance”.
Thoughts on how paradigms fuel
the fire...
Yes…every “artist” I know
looks at each new project as a blank canvas so “in their eyes”
designs and fabricates a custom system instead of designing and
fabricating a system around a compliment of standardized
appliances based on the customer eyes.
Net result…so long as an inventory of contractors sees
themselves as “artists” and so long as manufacturers see
themselves as suppliers of tubes of paints and brushes…they
jointly prevent the application of “appliances”. Incidentally
for those who have a belief system that hydronic appliances
“dumb down” the industry…it might surprise you to know that one
actually requires a greater engineering skill to design a system
around an “off the self” product since you have to work within
the hydraulic and thermal limitations of the manufactured
product…that means you have to have an above average
understanding of thermal dynamics, fluid flow and controls to
apply the appliance….no different than working with a fan/coil,
furnace, boiler, heat pump, indirect water heater, HRV/ERV or
brazed plate heat exchanger.
Re: If not trade associations, then what?
What the CHC did was essentially fire themselves and hire an
outside firm. I just think we need to scale up that strategy…
Weiden+Kennedy are a step in the right direction though I’m
personally devoted to the wisdom of
Al
Riess and
Jack
Trout ... Before and after their partnership dissolution
they continue to be a step beyond most PR and marketing firms in
their strategies and tactics and what they believe (in my
opinion) is what the industry needs.
If I were in charge of leading the Allies I would partner with
Jack
Trout for strategies and tactics for consumers, builders and
HVAC contractors.
Again...industry would have to fire itself and agree to build up
a war chest to hire these very very talented firms...
rb
Re: “You can't fix the
marketing until the product is fixed” ...agreed…but a caveat for
clarity - I only partially subscribe to the belief that
marketing is the exclusive savior for the entire hierarchy
between producers and consumers. If we selectively substitute
the word “marketing” with “laxative” it might make it clearer to
what I believe is necessary. Better yet …it might make it
clearer if one were to understand each layer in the hierarchy
needs a custom made solution to suits its own dietary
constipation. That laxative might be; public relations...might
be marketing…might be sales…might be industrial design or…. it
might be legislation for example that prevents failure to obtain
Energy Star ratings for customized on site fabricated mechanical
stuff …regardless I still know it will take a war chest applied
in measured amounts to each industry segment using an
appropriate strategy for that specific segment. I guess another
way of saying it is…if one were to turn all the snow in ones
yard into one big snow ball and throw it at that one big mean
neighborhood bully – it might make one feel good but it’s all
but wasted– as there would not be any snow left over to make a
snowman…don’t know if that helps explain where I’m coming
from….in any event - “… getting the product fixed” – from where
I sit - requires a cultural shift in the contractor, wholesalers
and manufacturing chain….and the industry and its various
elements are masters at change prevention. Sustainability to
this industry translates to: “how long can we sustain old
practices without being forced to change.” Why? Because it’s
true that - consumers know about radiant; and it’s true the
hydronic appliance has existed for decades in several forms; and
it’s true in informal surveys consumers prefer radiant systems
using hydronic appliances with very few appreciating the onsite
custom made” science experiment” (we really see this in the
previously owned real estate market where consumers have a
choice – they can buy as is – or negotiate down due to the
“complexity” perception or walk away due to the cost to reformat
the mechanical room)…. Since I have a little bit of knowledge
with manufacturing and distribution (Larry is in the same camp)
- the blockage in my opinion - at least as it relates to cost
effective, reliable, user friendly, simple, attractive - is not
a consumer problem but a contractor + distributor +
manufacturing cultural challenge (Larry your thoughts?).
From my camp...the laxative
for the above ménage à trois addicted to labor and parts sales -
has to be funded from industry itself and the first in the chain
to go into rehab has to be the growers (manufacturers) and the
dealers (wholesalers). [Sorry for the analogy…when I was in
manufacturing, I had this slide in my presentations that went
like this…”do you know what manufactures and drug pushers have
in common?”…they both call their customers, ‘dealers’.]
Getting the product fixed –
yes absolutely….getting the supply chain fixed as well – also
necessary.
rb
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