Business development is key to success

Whatever the state of the market, a successful company will always look to make the most of any opportunities that appear. Installer spoke to Louis Pickersgill and John Fenton to find out how business development is driving Ravenheat forward.
Ravenheat business development webThe latest statistics may indicate that the UK boiler market is resurgent but unless the right approach is adopted it’s easy to miss out on the opportunities that this rise in sales can bring. For that reason, it’s important for all businesses – from manufacturers through to installation companies – to be properly prepared to adapt to any changes in demand.
In reality, the preparation needed will depend on what the opportunities are. An increase in boiler installation enquiries, for example, will require hiring additional staff, while continued enquiries about new technologies – such as smart controls – may prompt the decision to undertake extra training.
Getting the focus right
Louis Pickersgill, Ravenheat’s Managing Director, believes that the key to getting the right focus lies in taking time to understand the shifts within your market before committing to making any changes to a business.
“We never believed as an industry that it (annual boiler sales) would go over 900,000 units. To reach a million was unbelievable, and it just keeps going. It’s a good industry to be in though because a boiler is the only piece of equipment that will give you what you want, when you want it. And with the Government seemingly backing shale gas, the gas boiler should remain the biggest sector in the heating industry.
“That said, the one-off market has really changed. In the past, if a homeowner wanted – or more likely needed – a new boiler, he or she went to the mortgage company and added the cost onto that. Now, there are companies offering monthly payment deals and other types of financing options that the small installation businesses will find it very hard to compete against. The truth is they are advisors selling a finance plan rather than heating engineers selling a solution the homeowner actually needs.
“Installers have to learn to compete on financing – they have to find another way to win business. Hopefully, that will be through offering a better service and better product knowledge, explaining to the homeowner how best their system could be installed. At the end of the day, the homeowner needs to know they are getting the right boiler and system – not just the cheapest. However, we as an industry need to work harder to ensure that customers really do value expertise.”
This idea of the ‘right choice not the price choice’ is equally valid for Ravenheat as it looks to take advantage of a currently buoyant market that saw 1.7 million boilers sold in 2013. For Louis, the need to better explore the different possibilities has resulted in John Fenton (formerly of Plumb Center and Travis Perkins) joining the company in early 2014 in a business development role.
“We know the areas we need to focus on but we didn’t have the time to actually go out and do it. Bringing John into the team gives us not only more pairs of hands but also a different set of skills and experiences that we think can make a difference when it comes to moving into new areas or expanding our existing presence in others.”
Change of perception
The idea of ‘business development’ may seem like a redundant concept for many installation businesses but the reality is that it’s probably something that most are already doing – or could start doing very quickly and easily. The current situation – driven by Government schemes and large, national installation companies – meansthat homeowners are beginning to view the purchase of a new boiler as a financial decision. Increasingly, they are influenced by factors such as reducing energy bills and payback-incentives to upgrade their existing heating system rather than waiting for it to become an emergency purchase.
Proactive approach
The result is an opportunity for the pro-active installer to initiate the conversation with both prospective and existing customers rather than waiting to be approached when a boiler has stopped working and needs replacing.
For John, the idea of taking the time to create separate approaches that will work for a variety of customers and situations is crucial to gaining a competitive edge in a busy sector.
“Business development is not sales – it’s very different. It’s a long-term approach. It’s about putting a strategy in place and making long-term investments into a business or its customers to ensure continued successful relationships not just a quick sale. For Ravenheat, it’s ensuring the correct focus going forward to make sure we can deliver what our customers – and the market – needs.
“Whether you’re selling boilers as a manufacturer or as a sole trader or heating engineer, it’s important to segment your marketplace. There are different customers who require different things. You have to look at it in terms of ‘what is the best way to help that customer’ and ‘what is the best for them to help their customer’ so that every opportunity is maximised.
“We recognise that our conversations with independent merchants are not the same as those with social housing groups or local authorities – and this is the same for installers because the needs of a young family will not be the same as those of an elderly couple.”
Working in a changing market
As the domestic boiler market changes and becomes more crowded, installation businesses need to look for ways to set themselves apart from the competition. Gone are the days when an installation business could rely solely on a steady stream of phone calls from customers asking for them to come and replace a broken boiler. But this doesn’t need to be viewed as a negative – instead it should be seen as a positive because the home heating system has probably never been more in the public eye, giving heating engineers the opportunity to kick-start conversations about system upgrades without waiting for the boiler to develop a problem.
While the market appears to be becoming more congested and competitive, Ravenheat is confident that it can use the situation to its benefit. Louis and John know that the larger companies are important, but they also recognise that smaller companies have advantages over bigger competitors because they can be more flexible, less concerned about defending their position in the market and able to focus more on the opportunities available.