Selling heating systems online: the first step in the evolution from products to services
Buying a new heating appliance today typically involves finding and dealing with a local installer, as well as taking time off work to wait at home for a site survey and installation, all for a price which the customer generally does not know is competitive or not. Why not just buy online? With the internet giving customers more power and more information, is this trend finally coming to the very traditional heating sector?
New entrants like Thermondo are speeding up this slow and arduous process by doing the site survey remotely, either by asking the customer a few simple questions online or over the phone, having them upload photos of their heating system, or doing a video call. The first benefit for customers here is that they don’t have to wait very long at all to get a quotation, and they also don’t need to be at home waiting for an installer to come around and do it.
As it is so easy to do, customers will often get several quotes rather than one – ensuring them better value and greater peace of mind. Once they have accepted the quote, online platforms allow them to book a time online for the installer to do the replacement. And once the job is done, the customer can pay online rather than having to pay the installer; some platforms even offer finance options.
In this example, the only task done by the installer is the actual installation. Though there are other online tools such as directories and lead generation sites that simply put customers and installers in contact with one another, leaving installers to handle quotations and payment, as the spectrum of digital sales platforms below shows.
The spectrum of digital sales platforms for heating products and services in the UK
So why is selling heating systems online so important? For Philipp Pausder, CEO of Thermondo, it’s about forming a trusted relationship with the customer, and providing an easy to use end-to-end service that results in better customer experiences and ultimately better heating choices in terms of the transition to new energy.
“In regard to CO2 emission reduction potential it’s just massive and it is driven by really poor customer experiences.”
Like several other new entrants in this space, Thermondo began by subcontracting installations to heating engineers back in 2013, but it now employs and trains its own installation force. This is crucial for ensuring installation quality, particularly in Germany where heating systems are generally more complex than a basic combi boiler.
Thermondo is also moving from one-off transactions to subscription services. Almost 90% of their customers now have multi-year contracts with Thermondo, and through these relationships, Thermondo can offer further products and services:
“So that's our key strategy, to be that partner and that will also, of course, evolve to add more and more products and revenue streams onto that partnership.”
As part of this strategy, Thermondo recently launched its own boiler, the t1. Everything their customers see – from the installation and maintenance team to the heating appliance, to even the gas bill – is now Thermondo branded.
It's widely agreed that the heating sector is ripe for disruption, and Thermondo is often cited as a key company to watch in this space. You can hear more about Thermondo's journey from broker to the end-to-end service provider in Episode 10 of our Talking New Energy podcast.