The first COVID-19 stimulus checks began deploying in April 2020, and a second round of payments, albeit smaller, came out in early 2021. Currently, with a Democratic majority in the both the House of Representatives and Senate, along with a Democrat in the White House, there is talk of a third payment going out.

For some, the money is a needed lifeline to stay above water financially. But for others who have kept their jobs and weathered the pandemic without much financial worry, the stimulus checks could be a boost to discretionary income. For HVAC contractors, that extra income could lead to greater profit if people choose to invest it in their homes. How can contractors market to these people — without seeming as if they are trying to profit off of a disaster?

The Past Stimulus Check, And This One

Chris Smith, CEO of All Contractor Marketing, said that the best way to predict where this stimulus check money will go is where the past ones went. The U.S. Census Bureau surveyed over 70,000 households across the United States, asking how they spent the first stimulus check. Most recipients used the money for more than one thing: 80% reported using it for food; 77.9% for rent, mortgage, or utilities; 58.2% on household supplies and personal care products; and 8.1% on household good like televisions, electronics, appliances, and others.

It is that last 8.1% that contractors want to target — people who are in a well-enough financial position to use stimulus checks for HVAC. Income has a significant effect on where the money goes, as 87.6% of houses with an income of $25,000 or less used the money to meet expenses, whereas over a third of households with incomes between $75,000 and $99,999 used the money to pay off debt or add to savings. The second group is far more likely to use stimulus money to invest in home improvement.

“You have to look at the average household income, and how many of those households are in your service territory, and then you can determine if it is a good market to reach out to try to get a piece of that stimulus money,” said Smith.

Getting HVAC to the Front of Mind

Justin Jacobs, marketing coach at Hudson, Ink, said that contractors have an uphill battle when it comes to convincing homeowners that stimulus check money should go into an HVAC investment. He also cautioned contractors to avoid bringing up the stimulus check explicitly in conversations with homeowners or in marketing materials. For families struggling financially, asking them to spend stimulus money on something other than an absolute, immediate necessity could be hurtful.

And even for those in a good financial position, they may want to delay a big purchase like an HVAC system. “In this industry, if people can kick that can down the road, and just say, ‘I got to endure this for a couple more weeks, maybe my system will make it and I won't have to make this large decision until the summer,’ they're going to do that,” said Jacobs, “even if they've got money on hand.”

Which means that contractors will have to put in some work to convince homeowners to invest in HVAC, according to Jacobs. This could involve the use of incentives like offering end-of-the-year pricing since a system replacement will happen in the shoulder season.

Educating homeowners on the importance of indoor air quality to the health of those living inside can be another way to incentivizing an HVAC investment. Health is on top of everybody’s minds, so if a technician can explain the utility of an air purifier or UV light, the company may be able to sell a product and help keep a family healthier.

Reaching Your Customers

According to Smith, direct mail marketing is becoming more effective, and this could be a great time for a company to use it.

“We're seeing a big return to postcards, and I think it’s because everybody's moved digital,” he said. “People just aren't overwhelmed with postcards like they used to be.”

Customers are inundated with ads whenever they surf the Internet or use social media, so digital ads are needing to get more and more creative to effectively draw customers’ attention. But the greater the shift to digital advertising, the more effective a single mailed advertisement becomes. However, Smith warned that some of the people who respond to direct mail are coupon clippers who are only looking for the lowest price. These people don’t typically want to invest in higher-end technology.

Given the data from the Census Bureau, contractors would do well to target this advertising to more affluent areas that are already using their stimulus money to buy home appliances.

“Look at your database first, before you start purchasing lists or throwing out thousands of postcards or email blasts to a general population,” said Jacobs. If a contractor takes time to identify customers who they had visited in the past year, but who had chosen to delay the purchase of a system, now could be a good time to follow up with them.

Pandemic Fatigue and Homestyle Creep

People are exhausted over the past year of lockdowns, elections, and sickness, which, according to Smith, is leading to lifestyle creep — when people purchase things typically above their income bracket, because they feel that they deserve it.

“If you're going to spend so much time in your home, why not be comfortable? You deserve it,” said Smith. “That message would resonate with customers.”