Assessment of the Market for Compressed Air Efficiency Services

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THE SUPPLY SIDE OF THE MARKETdiagnostics and efficiency-oriented specification within a reasonableperiod. The most effective training for this kind of work consists ofhands-on mentoring at live customer sites.Findings from the distributor assessment suggest that the training aspectof developing consulting capabilities may not constitute a major barrierto entering the market. Over two-thirds of vendors reported that theyhave implemented a training program in energy-efficient system designfor their sales staff. The majority of these training programs have beenimplemented since 1995 and the programs are held, on average, 5 timesper year, although this figure varies between 1 and 12 times per year.The questionnaire did not probe the source of this training. However,contacts in the industry report that most of the training currently availableis provided by manufacturers.Motivations to Enter the Market. Thirty-six percent of vendors felt thatefficiency services are very important to the competitive position of theirbusiness. In addition, another 31% felt that the services are important.Their major motivation to enter the market was customer retention. Ofthe 73 vendors who gave reasons as to why system efficiency serviceswere (or were not) important to their businesses, 16 mentioned customerretention as a key motivation for promoting those services. As one dealernoted, “The world is changing. Energy efficiency is very important. Tostay in the marketplace, we will have to be trained to understand whatthe customer does not understand and what our competition doesunderstand in order to be a player.”Interviewed distributors mentioned the need to differentiate themselvesfrom their competitors next most frequently (12 of 73) as a reason foroffering efficiency-related services. One distributor noted, “[Offering efficiencyservices] is the key factor in convincing the customer that we area professional business.”Other important business motivations for offering efficiency servicesincluded:• Enhancing the distributor’s credibility in making equipment sales;• Providing value added services to the customer (closely related tocustomer retention); and,• Opening up a relatively high-margin business line for the distributor.Key Markets. Based on their experience in the field, the distributorsbelieved that the market for compressed air system efficiency serviceswas not highly segmented by industry type. Their answers to inquiriesprobing the most receptive industries for these services were fairlyevenly distributed over the industries the individual firms served. Forexample, distributors identified electronics and high tech manufacturing(13%), food processing (12%), and chemicals, especially pharmaceuticals(15%), as the most receptive industries for purchase of compressed airefficiency services. Fifteen percent of vendors replied that there are noparticular industries that are especially receptive to compressed airefficiency services.Overwhelmingly, the interviewed distributors believed that larger businessesare more receptive than are smaller-sized businesses. Customerswith large and complex compressed air systems, especially with multiple"[Offering efficiencyservices] is the keyfactor in convincingthe customer that weare a professionalbusiness."U.S. DEPARTMENT OF ENERGY37
Compressed Air Market Assessmentcompressors, appear to be most receptive to efficiency services.Consultants who have served as instructors in the CAC training programsreport that most end users who have attended the programs representmid-sized facilities—those with compressor horsepower in the range of100 to 500 hp. They believed that larger facilities often have somewhatexperienced operating personnel, even though many of their ownclients were extremely large manufacturing facilities.38U.S. DEPARTMENT OF ENERGY
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