Q&A: Larry Hartley of Electrolux Central Vacuum Systems

CE Pro has covered in detail the benefits of custom installers branching out to find revenue opportunities in the existing home and commercial markets.

Perhaps lost in this quest for expanded revenue streams has been the central vacuum category. Larry Hartley, vice president of sales and marketing for Electrolux Central Vacuum Systems, explains to CE Pro just how easily central vacuum systems fit into the retrofit home market paradigm, as well as other trendy markets such as the green building industry.

There's a general feeling in the custom market that installing central vac is an intensive, time-consuming process. How long does it typically take to install in a 3,500-square-foot home, for example, and is there a rule of thumb for time estimations?
We say one hour an inlet. That includes hauling the tools in and out. The boiler plate on this is about 15 minutes per inlet in new construction and a little bit longer - around 30 minutes per inlet - in a retrofit installation.

A 3,500-square-foot home requires about five wall inlets and can be installed in about five hours. Each wall inlet is then connected with tubing that runs either up or down in the wall to a trunk line. The trunk-line tubing runs through a crawl space, attic or basement and links each inlet to the main power unit. Working with the 2-inch tubing isn't really that different from pulling wires in a retrofit situation.

For years when central vac was offered to custom install clients, the industry targeted new home installations. Can installers offer central vac to existing home owning clients?
We know from our experience that central vac can be installed in an existing home in less than a day with no extra mess; there's no removal of wall sections.

We have some dealers that focus their businesses on retrofit, and 75 percent or more of their business is retrofit.

When home building was strong, most dealers targeted new construction because it's a little easier to do. There was also a lot more volume in new construction, but not today.

We've seen more of our Beam business move toward existing homes. The nice thing about retrofit is that it's one trip to the house, as opposed to two visits in new homes: there's the rough-in and then the trim stage after the painting. When you do new construction you invoice the builder, then you wait to get paid. On a retrofit the cash flow is great, because you give the client the bill and the payment is due immediately.

Are there any major differences between the installation of a central vac system in a new-construction environment and an install into an existing home?
To start, the marketing efforts are different. In new construction dealers track permits, tag housing starts and work directly with the builder and the homebuyer to sell a system. With retrofits it's all homeowner direct, and traditional advertising is used to reach them such as direct mailers, newspaper inserts and radio ads.

Retrofit installation often requires more care to keep the home clean and often booties are used over the shoes. Also, cleanup after the job is critical to achieve happy customers.

Many dealers send two installers to a retrofit job to handle fishing pipe through the wall. This is much easier with one person on either end of the run. However, with two installers the job should be finished much faster in order to control labor costs.

I am not aware of specific differences in permitting comparing new construction versus retrofit.

So the biggest difference in retrofit is in the labor, by either planning two installers for the job or using one installer but planning additional time to complete the job. Bottom line is that retrofit installations will take 50 percent to 100 percent more labor than new-construction installs.

Has central vac been overlooked as a revenue-generating category?
Yes! It's overlooked it's because it doesn't have the same sex appeal as electronics systems. But central vacuums are a major revenue generator. The reasons behind that: No. 1 - central vac is a high (50 percent) gross margin category. It's right there with whole-house audio as a leading profit generator. No. 2 - it can definitely be retrofitted, and retrofit is where the action is today. No. 3 - in many cases the central vac category has a broader appeal to both male and female homeowners than other product categories that installers carry. To that extent some dealers start every sales presentations with central vac because it's one of their highest take rate products.

Central vac actually goes into one-third of new construction over 3,200-square feet, and it has the same penetration as before the recession.

Are there any other opportunities with central vac that custom installers are missing with their marketing efforts?
I think a couple of things: It's a 50-year-old category, but many people aren't aware of it. So first, make sure it's offered. Second, many improvements have been made to our product lines over the past 15 years, so make sure that consumers receive a good demonstration.

One of these improvements is a new hose system that retracts back into the wall. Another one is that our systems are bagless.

What is Beam doing to train installers in sales, marketing and installation?
We hired the No. 1 sales trainer in the remodeling industry to conduct seminars and webinars. His name is Rodney Webb and he is the 91 percent guy - he has proven that his closing rate is 91 percent, and offered us the same expertise. Webb's curriculum is a very professional sales system and it's not a high-pressure system.

We've created turnkey marketing tools such as online lead generation and direct mailing programs, and newspaper insert programs.

Looking ahead to 2011, what area of the new housing market should installers target with central vac sales and marketing?
Every “Green Builder” within 100 miles needs to be contacted and made aware of the fit with central vac. Our products are “Green Approved” by the National Association of Home Builders Research Center and they're an integral part of the air quality section of both LEED for Homes and the National Green Building Standards.

Also, by building central vac into their homes, builders are offering their clients longer lasting homes and improved air quality. This is a great message for not only green builders, but also higher-end custom builders who work very closely with their homebuyers to select the best [amenities] for their homes.