Mike Murphy

“We tend to overestimate the power of change in the short run and underestimate it in the long run.” So said Rik Kirkland, ofFortune Magazine, at the most recent Air-Conditioning, Heating, and Refrigeration Institute annual meeting.

The thought makes me recall the conundrum of early adoption - a Marketing 101 concept that is critical to new product acceptance.

Here is why: Just as some contractors jumped at the opportunity to sell geothermal heating and cooling products many years ago, just as some were early proponents of zoning systems for homes and buildings, just as some have always been selling high-efficiency equipment - there are just as many contractors who will never be the first ones out of the blocks, regardless of the opportunity. Therefore, as most of you can attest, the majority of people fall somewhere in the middle ground, waiting to see which pioneer gets the arrow in the back, but not waiting until the bitter end to change over to a new idea.

Here is the connection.

Early adopters overestimate the power of change in the short run and the lazy stragglers underestimate it in the long run. As an example, take the much ballyhooed transition from 10 SEER to 13 SEER. There are those who would say that when January 2006 rolled around, the earth did not shake and the wheels did not fall off of the bus - as many innovators and early adopters were so accused of preaching. On the other end of the spectrum, there are those contractors, today, who still do not yet believe that any high efficiency solution is actually better for the customer than a basic 10 SEER product. Whether right or wrong, those folks should get a ticket for the next bus, and stop waiting at the curb. They have definitely underestimated the power of change.

Regarding the move from low-efficiency products to high-efficiency products, the great majority of people fell somewhere in the middle. They follow the model like it was pinned to the tips of their noses. The chart on this page illustrates what typifies a buyer’s DNA at different stages. And, let’s face it, regarding the 13 SEER transition, the HVAC contractor industry behaved like any other group of buyers.

THE NEXT BIG THING

The refrigerant mandate that will become effective January 2010 is the next big thing on the HVACR radar screen, but this time, it’s actually a much bigger blip. It affects not only residential, but also commercial and refrigeration contractors. Whereas before, some mechanical contractors didn’t get excited over a SEER change, everybody has to pay attention to an HCFC phaseout as HFCs become the preferred norm in the United States - at least for a while.

In the very near future, you will be hearing and reading a lot about changing from R-22 to R-410A. How soon you choose to jump on the bandwagon is, of course, up to you. However, here is an exercise I suggest you perform with the chart on this page. Just as you might rate a movie from one to five stars, place dollars signs to the right of each of the five categories. Where is the greatest value, whom will make the most money? He who is first, or he who is in the middle? Forget about being last.

Murphy’s Law:Follow the money.

Publication date:08/11/2008