A Q&A with Lennox: Changing Consumer Needs in HVAC
May 11, 2021
Welcome to our industry leadership series where we showcase the expertise of our partners in the building products and residential new construction fields.
The pandemic has changed the way manufacturers, builders and every player in the residential construction industry does business — and it’s also changed consumers’ relationships with the products in their homes. Today, we’ve invited Kevin Suarez, business development manager for Lennox Industries, one of HomeSphere’s oldest partners, to discuss current trends in the HVAC industry, from what he’s seeing firsthand to where he thinks the industry is headed.
Suarez first got involved in the industry selling HVAC systems to multifamily communities and property manager companies. Now, he serves as a business development manager with Lennox, managing the company’s partner programs and working with field teams to grow the brand’s builder and residential new construction business.
How have you seen your industry change in the wake of COVID-19?
We certainly have seen changes in our industry. Face-to-face meetings were almost nonexistent. There has been a disruption in the builder supply chain in every category, therefore communication between builders, trades and manufacturers is more important than ever. Adaptability to change has been important as well. There has been a shift in consumer needs and how they buy. Consumers are purchasing homes through virtual tours and virtual closings. For example, consumers are now requesting more indoor air quality products and smart home automation than ever before. We have received requests from many builders about our IAQ product such as our Lennox Healthy Climate™ Carbon Clean 16® air filter, PureAir™ purification system, etc. For many, the home has become a gym, restaurant, school, and prospective home buyers are investing in smart technology like our iComfort brand of ultra-smart thermostats that provide precise comfort, energy savings and convenience.
On changing consumer trends:
"Consumers are now requesting more indoor air quality products and smart home automation than ever before."
A lot of industry publications are emphasizing a renewed consumer interest in health and wellbeing. Are you seeing consumers more concerned with air quality?
We are seeing national interest in and sales of our indoor air quality products to national, regional and local builders in addition to a huge growth in our add on and replacement IAQ sales. The interest is consumer-driven based on the feedback we receive from builders and contractors. Prospective homebuyers are making more inquiries about indoor air quality products than ever before. We feel this trend will continue especially when you consider the amount of information about COVID-19 that has been shared with the public and a trend of heightened awareness. [We have recently completed rigorous testing and are excited to announce that our PureAir™ and PureAir S™Purification Systems with the Lennox Health Climate™ Carbon Clean 16® air filter remove over 99 percent of the virus that causes COVID-191 from the air.2]
[1] When used properly with other best practices recommended by CDC and others, filtration can be part of a plan to reduce the potential for airborne transmission of COVID-19 indoors
[2] Removal efficiency based on third party testing results using MS-2 bacteriophage (ATCC 15597-B1). Bacteria representative of virus-sized particles like SARS-CoV-2, the virus that causes COVID-19. November 2020.
You also work closely with home builders. What feedback have you heard from them since the start of the pandemic? Have their needs changed?
We have heard an abundance of feedback from builders regarding lumber pricing, shortage of trades and labor, change in codes and performance standards, questions of impending changes to refrigerant, demand vs. supply, etc. One thing that stood out is/was their appreciation of communication and transparency with manufacturers. Our builders are aware of the disruption and challenges in our business (residential new construction), and they encourage communication and updates as they know things are changing, sometimes daily. One thing that’s abundantly clear in our builder community is that over all they are resilient.
Most builders quickly adapted their business both out of necessity because of the housing demand and out of their own ingenuity and passion for the business. While we pride ourselves on consistent communication with builders, the disruption in the industry has made it more imperative to increase frequency in builder communication. Our approach to sales with builders has changed in some ways but not the fundamentals. Our builders have been mostly virtual since the pandemic. While that does present some challenges, and we miss the in-person connection/interaction with builders, the frequency of communication and dialogue is more than ever before. In the past we would travel to builder meetings around the country with downtime on planes, trains and automobiles (great movie by the way). Now we have more time to meet with more people. Fortunately, we (Lennox) were early adapters to Teams, Zoom, Webex, etc. and that gave us the opportunity to meet with more builders.
Builder needs have changed in the sense that they have had to adapt to meetings online, become supply chain experts and interact more frequently with trades than before due to the disruption in the business. Many regional and local builders saw the value in having a relationship with their HVAC manufacturer. One thing remains fundamentally the same, builders want consistent communication, transparency, follow up, etc.
On changing relationships with builders:
"Builder needs have changed in the sense that they have had to adapt to meetings online, become supply chain experts and interact more frequently with trades than before due to the disruption in the business. Many regional and local builders saw the value in having a relationship with their HVAC manufacturer. One thing remains fundamentally the same, builders want consistent communication, transparency, follow up, etc."
What are the top trends happening in HVAC right now? Are those a result of the pandemic or trends that have been years in the making?
VRF (Variable Refrigerant Flow) continues to be a growth segment in the HVAC industry. It is expected to grow CAGR of 12 percent between 2019 to 2024 according to Business Wire. We are seeing an increase in indoor air quality product demand by builders, HVAC contractors and consumers. This was a slow trend in our industry prior to the epidemic but it has ignited enormous interest because of the epidemic. Another trend in the industry is impending changes to HVAC equipment performance and refrigerant standards around the U.S. in 2023 and beyond.
What innovations are happening at Lennox that you’re most excited about?
I’d say the Lennox Ultimate Comfort System™, which combines the best of the Dave Lennox Signature® Collection to create an unprecedented whole-home comfort system that seamlessly and intelligently works together to stay finely tuned to your home and deliver consistently clean, perfect air. Our SL28XCV air conditioner and our SLP99V variable-capacity gas furnace have the highest SEER and AFUE in the market at 28 SEER and 99 percent AFUE. We are excited to be leaders of innovation in our industry and provide our builders, contractors and homeowners with the most efficient and quietest HVAC system on the market. In addition, Lennox Industries announced its PureAir™ and PureAir™ S Air Purification Systems with the Lennox Healthy Climate™ Carbon Clean 16® air filter that removes over 99 percent of the virus that causes COVID-19 from the air. After months of rigorous testing at a highly reputed, independent laboratory, this announcement is further evidence of our relentless commitment to delivering unmatched, whole-home purification for perfect air.
On the top trends in HVAC:
"VRF (Variable Refrigerant Flow), continues to be a growth segment in the HVAC industry. It is expected to grow CAGR of 12 percent between 2019 to 2024 according to Business Wire. We are seeing an increase in indoor air quality product demand by builders, HVAC contractors and consumers. This was a slow trend in our industry prior to the epidemic but it has ignited enormous interest because of the epidemic."
What should home builders (and consumers) be looking for in HVAC systems?
Quality, reliability and a manufacturer with a proven reputation of integrity, respect and excellence. An HVAC system should meet the heating and cooling capacities determined by home energy calculations (manual J,S). Home builders will continue to look for an HVAC system that balances consumer needs and cost. Consumers should be looking for consistently perfect air, complete control, unmatched efficiency and a beyond quiet heating and cooling system.
Has your sales process to both home builders and consumers changed since COVID-19 and how has Lennox navigated that?
Our sales process has changed dramatically. Like many other organizations, we have limited travel and in-person meetings. We utilize virtual meeting platforms such as Teams, Zoom, Webex, etc. to take meetings. We’ve been able to adapt remarkably well. A large contributor to our success in adapting new sales protocols is that we adapted early, communicated expectations internally and externally, and we continue to train everyone on new protocols. We’ve either maintained or increased sales activity during this time. We are starting to visit more and more customers in person, but we have our employees' safety top of mind. We purchased and distributed PPE gear to our field sales team. We have emphasized that we want to protect our employees and customers.
About Lennox Residential
Lennox Residential, a division of Lennox International Inc. (NYSE: LII), is in constant pursuit of perfect air because Lennox believes everyone deserves it. Whatever your version of perfect is, Lennox can help make it happen. Offering some of the quietest and most efficient units on the market, the first ultra-low emissions furnace, and hospital-grade air filtration, Lennox has a history of designing innovative heating, cooling and indoor air quality products. Lennox’ approach to product design has earned it more Dealer Design awards than its competitors combined and multiple ENERGY STAR Most Efficient certifications. Lennox is a proud contributor to its communities, investing in the future of the HVAC industry and giving back through its corporate social responsibility program, Feel The Love. For more information about how Lennox is redefining air, visit Lennox.com/Residential.
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