As of March 2023, 52% of U.S. millennials own a home.

In other words, 52% of Americans aged 28-43 may find themselves in the market for HVAC.

According to data from a study of more than 400 homeowners, millennials differ in several ways from previous generations in their HVAC purchase decision-making. Following are three of those top distinctions, as explained in an ACHR NEWS webinar series at AHR Expo in Chicago (see sidebar for links to view the rebroadcast).

1: They Don’t Mind Paying Visit Fees

Overall, homeowners are “a little hesitant” to accept a fee for a visit.

“However, when we filter on some of the younger generations, we do see a shift: Millennial homeowners are more willing to pay a fee to have a contractor come visit,” reported Mitch Henderson, co-CEO at BNP Media, parent company of The ACHR NEWS and Clear Seas Research, which performed the survey. “And I think as time goes on, as homeownership changes, that's going to continue to increase. And I think as millennial contractors come into the workforce, we may see a shift as well, with a little bit more tendency to charge the fee.”

Angie Snow, principal industry advisor at ServiceTitan, worked at a contracting business before moving to the software side; her company did charge fees, and she said getting buy-in starts with the verbiage.

“Some contractors may say I'm going to charge a dispatch fee, a diagnostic fee, and some of the pushback that we get from our customers is, ‘I already know what’s wrong — I don't need to pay a diagnostic fee, I'm happy to just have you come out fix it,’” she said.

So instead, they called it a “service fee.” To drive home the point, her company took its techs to a steak dinner at a five-star restaurant, then had them compare that experience to Texas Roadhouse.

Point made.

“It's not just the steak, and it's not just the part in the furnace; it's the service that comes behind it,” Snow said. “You're going to get a text when our technician is on the way, you're going to know right when he comes, he's going to clean everything before he makes any repairs to your system, and give you pricing and options. So, when you think about the experience behind good service, I think that's why people are willing to pay a service fee — because they know that with that service fee comes good service.”

Conversely, Billy Stevens, founder of Sera Systems and a former contractor, doesn’t believe in any kind of fee to go out to the house.

“What we found is customers really want an experience where they can do it in two or three touches online, because 65% of the people would rather book online now,” he said. “It's about time more than it is about the money these days. That's the economy that we're in now.”

2. They Want to See Pricing Online

HVAC contractors may not want to hear it, but the survey data was clear: Homeowners are far more likely to call a contractor if pricing is listed on their website.

“The difference is even more stark when you take into account Gen X homeowners and millennial homeowners,” Henderson reported — it’s “almost getting to the point of where they are virtually unanimous” about calling only if pricing is listed.

“And I think that follows the trend of what we're seeing in general: more transparency online,” he said. “People are going to go and search and search and search to find what they want to find. And if they don't find it [with one contractor], they're going to go another route.”

Amazingly, he continued, 80% of the contractors surveyed do not post any pricing whatsoever.

Wallace Kittredge, marketing communications manager at Climate Control Group Inc., wasn’t convinced of the need.

“Everyone's going to price shop. However, let's say you're installing a new furnace or installing a new air conditioning system — there's a lot of different things involved there,” he said. “Ultimately, that's like asking how much is a car, and there's no way to tell them until you get all the details. There [could be] extensive removal, or you're looking at this unit with this level of capability versus that unit with that level of capability.

“So yes, give them an idea of maybe those hourly rates,” he concluded, “but you're going to do your potential customer a disservice, as well as yourself … if you just start spitballing prices, or if you just put them up willy-nilly online, like ‘get a furnace for this budget,’ ‘get an a/c unit for this budget.’”

While Stevens at Sera Systems believes transparent online pricing is “something that’s going to eventually happen,” he doesn’t think that time is now.

“I believe that we need to sell our services, which is more important than the items that we're selling,” he said. Key to that is memberships — and a lot of them.

“Because once customers are a member of something, they're going to remain sticky, so the price doesn't become the biggest issue,” he said. “It becomes part of the sphere. We also have the saying which is separating yourself from everyone else through the customer service experience… and that's what matters in this new, modern world that we're living in.”

3. The ‘Amazon Effect’ is Real

These days, almost everything is available instantly at the touch of a screen.

“Obviously, the Amazon phase of instant gratification is very real, and it's not going anywhere,” said Michael Cooper, residential indoor product platform leader, Carrier.

Numbers from the Clear Sears Research study indicate that about half of homeowners would like their HVAC contractor or a local facility to carry online accessories. About a third of contractors actually do offer it or mention it to the homeowner.

“The numbers get more stark as we go down in the age of the homeowner,” Henderson said. “Millennials are much more open and receptive to purchasing online accessories from their contractor. And in fact, and we're not sure if this is related to the DIY trend of younger generations, but the numbers are indicating that more and more homeowners are looking for that opportunity.”

Joe Parsons, senior marketing sustainability manager at ClimateMaster, countered that on the homeowner side, online shopping really only extends as far as controls.

“Basically, everyone wants a Nest thermostat or an alternative to it,” he said. Other than that, entire HVAC systems are too complicated for DIY, and “it’s not as much of an issue for this industry right now.”

Contractors can leverage this trend by offering themselves as a one-stop shop for filters, thermostats, and other HVAC accessories, but with something Amazon can’t provide: expertise.

“You can lean on Amazon, but when you mess something up in the wiring, Amazon's not going to come and fix that for you,” he said. He’ll tell customers, “You can have all of that fixed today by the product that I offer and here's why. It's more superior. Here's how it fits in your world and what you're looking for.”

That, he said, is what differentiates what's sold in the retail world versus what an individual HVAC contractor offers.