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Belgian HVAC installers have the highest decision-making power

The construction and installation industry is a very particular market and very different from for example fast moving consumer goods. Why is that? Well, first and foremost it is a very traditional market, moving in a much slower pace. But, returning to the topic at hand, it is also quite unique in terms of decision making. The construction and installation market is characterised by a very large group of actors that hold some sway in terms of decision making.

For example, in the installation market (depending on which project and in which market) many parties are  involved in decision making. To name a few; the end users, architects, contractors, engineers, installers, consultants, government agencies and many more. This makes understanding the decision making very complex, but also highly important for a successful strategy. Especially given the fact that the decision-making power in the construction and installation industry is slowly changing due to trends like BIM, prefab, the increasing influence of end users, increasing complexity of installations and new forms of tendering like design-build contracts. This is why USP Marketing Consultancy covers this topic in the Q3 2020 report of the European Mechanical Installation Monitor on decision-making power. 

So, let's first start by looking in which countries installers have the strongest decision-making power.

European Mechanical Installation Monitor Q3 2020 - USP Marketing Consultancy

To explain the image above a bit more, we looked at 2 parameters to come to this ranking. First of all, we looked at the degree to which the installers have influence on the brand choice for visible and non-visible installation products for all types of projects combined. The second parameter is the degree to which the installers are able to change a brand that has already been specified by another actor. 

Belgian installers have the highest decision-making power

Installers in Belgium have the strongest position in terms of decision-making power. Not only are they, in many cases, able to influence or flat-out decide the brands to be used, but they are also very able to change specified brands if they see a need for that. Quite surprisingly, they have a particularly strong position when it comes to non-residential projects, both new build and renovation. This segment is typically an area where, in most other countries, the decision-making power of installers is relatively weak, but it is one of the areas where Belgian installers are particularly strong in terms of decision-making power. The Belgian installers also have a lot of influence when it comes to large-scale residential projects. Their influence on small residential projects, however, is average. 

German installers have the lowest decision-making power

In our ranking, German installers have the least decision-making power. Now, this could come as a surprise. Their influence on visible and non-visible installation products is actually not extremely low, but their decision-making power in non-residential projects is low, especially compared to Belgium for example. Their role in the process is much more advisory instead of being the key decision maker. Furthermore, their ability to change specified brands is relatively low, especially in the non-residential segment. Only installers in the UK have less power to change specified brands. This fact, in combination with their rather low overall decision-making power, places German installers at the bottom of the list in terms of decision-making power. 

 

How will decision making evolve in the mechanical installation market?

This is a very tricky question to answer, but I would like to highlight a couple of things. First of all, price transparency (for a lot of product prices can be found online) is empowering the end users/consumers in terms of decision-making power. Installers are faced more and more with end users/consumers confronting them with lower prices than those the installers are quoting. This leads to price negotiation and more overall influence from the end users/consumers. 

Another key trend effecting the decision-making power is BIM. As, in the upcoming years, the installer is involved early in the process and sits at the ‘BIM table’, their influence will grow, purely due to the fact that they are able to influence decisions at an earlier stage. 

However, the increasing complexity of installations could lead to more advisors and engineering companies being involved in the decision-making process and thus the influence of installers (bar the bigger installation companies) will decrease somewhat. 

Finally, as the installations will have an increasing amount of electric components or as they get ‘smarter’, the influence of electrical installers and smart home specialist might increase. Furthermore, the overall influence of developers and main contractors is increasing as well, especially in the non-residential and large-scale residential market, leading to less influence of the installer. This is especially the case in design-build contracts.

About the research and USP Marketing Consultancy

The European Mechanical Installation Monitor is a quarterly multi-client survey by phone amongst 2,800 mechanical installers annually. The full reports provide an in-depth view on key topics like sustainability, buying behaviour, orientation behaviour, digitalisation and many more.

This research is part of the multi-client research portfolio of USP Marketing Consultancy. Other multi-client reports cover target groups like HVAC installers, contractors and architects. 

Besides offering key insights through our multi-client portfolio, USP Marketing Consultancy also utilises its high level of market knowledge of the construction, installation and home improvement markets (built up over the last 25 years) to conduct dedicated ad-hoc market research. Our market knowledge is our key asset, enabling better insights and clear advice. When it comes to dedicated market research, USP Marketing Consultancy covers all types of research, for example branding, customer satisfaction, market entry, product concept tests and many more. 

For more information on this research or other possible research needs, feel free to contact Mr. Dirk Hoogenboom, Research Consultant at USP Marketing Consultancy