My mother just selected a contractor to replace her front door. The low bid was half of the medium bid and the medium bid was half the high bid. She didn't like any of the salesmen and the doors were pretty much the same in construction and features. So why did she pick the medium bid? My mother is a savvy shopper and knows when she's getting a deal. She is somewhat legend for her ability to get used car dealers to come down below their rock bottom price (way down below).
So why did she pick the medium bid that was twice the low bid? Short answer: it was the installation crew. Most successful contractors realize that their crews are the face of the company. Online reviews of contractors usually focus on whether the crew did what the customer was expecting. Let's face it, second to used car dealers, contractors have the most consumer complaints, and most of the time it's because the crew isn't working to the highest standard of quality.
My mother had had work done by the low bid company before and had some issues with the crew. The work was good quality, but it didn't go quite as she expected. Put it down to customer expectations not being met. She was willing to consider rehiring them, but there was no immediate trust there.
She didn't know the other two companies from Adam. She didn't like either of the salesmen. So in spite of that, why did she choose the middle bid?
The answer might surprise you. It was lead safe certification. The salesman with the middle bid talked to her about how the crew was lead safe certified. He provided some of the EPA handouts on renovation where lead paint might be present. Those are what she insisted on showing me. Not the information on the door, not the bid, but those EPA fliers. She complained about the salesman and his pressure tactics. She complained about paying twice as much, but she wrote the check because that crew was lead safe certified.
It appears that my mother is not that unusual of a customer. Studies on customers and their perception of certifications show that the customer perceives a certification as being important, even if they don't know what the certification itself means. My mother had no idea what lead safe means, nor did she actually read the handouts she was given to find out. But she immediately perceived it as an important factor to the selection of a contractor.
The take home message to any contractor is that if you have certifications, you should let the customer know. The customer may not know what they mean, but words like certified, licensed and registered signify that someone is looking over your shoulder to make sure that the work you do meets a quality standard.
This is why BPI's Home Energy Professional (HEP) Crew Leader certification is such a game changer. First, it is a U.S. Department of Energy (DOE) funded effort. For a performance contractor, having certifications backed by DOE is a selling point for the consumer. Who better than the Department of Energy knows about energy efficiency?
Second, this is the first crew leader certification in this industry's history. Yes, there are energy auditor and installer certifications, and some jurisdictions require them. But the crew leader is a new edge that savvy contractors are going to jump on. As the employee with the most customer interaction, the crew leader is the front line of the company; more than any other employee, he or she represents the company. The crew leader manages crew workers and the process of delivering quality work, and therefore needs to have more experience than his or her crew. Based on a Job Task Analysis developed by industry experts, the crew leader certification requires candidates to have industry specific experience, plus a combination of building science coursework and other industry certifications.
"All Crew Leaders are Certified Home Energy Professionals" is a pretty powerful statement in a print ad or flyer. It can make the customer more receptive to finding out what a Home Energy Professional is and what other Home Energy Professionals you employ. In a live pitch, there is a chance to add that the Home Energy Professional certification is part of DOE's national energy retrofit guidelines and that the company therefore follows the national Guidelines for Quality Work by using certified Home Energy Professionals.
Unlike the lead safe certification, this certification is voluntary. So there will be contractors who don't get their crew leaders certified. But when a competitor puts "All Crew Leaders are Certified Home Energy Professionals" in ads and flyers, consumers are eventually going to begin wondering if this is true with other contractors they interview. Consumer expectations change, and now "certification" will mean something in their minds.
"All Crew Leaders are Certified Home Energy Professionals" is a sound bite that taps into some basic consumer behavior. The contractors that can use it are likely to have a significant advantage over those that don't.
More information on the crew leader certification can be found at: www.bpi.org/pilot.
What happened at ACI didn't stay in Baltimore
An estimated 1,600 home performance professionals converged on Baltimore in late March for the 2012 ACI National Home Performance Conference and Home Energy Leadership Summit. One conference preface was this white paper: a 12-page backgrounder on the nascent home-performance industry and the challenges of selling energy upgrade work to most homeowners. To that end, it begins this way:
- Let's be clear – this is not a research paper, this is a call to action. We need radical thinking and a strong commitment to aligning our interests if we're ever going to realize the "low-hanging fruit" potential of residential energy efficiency.
That's how "Green Curmudgeon" and Green Building co-author Carl Seville summarized ACI 2012. His recap, published on Green Building Advisor, highlighted presentations showing that heat-pump water heaters offer only modest energy savings over traditional heaters. He also enjoyed John Straube's presentation on insulating and air sealing roofs and attics, and lauded "almost continuous sessions" on marketing and websites.
Internet marketing 201
For a quick overview of one such marketing session, check out Macie Melendez's post on Home Energy Pros of "Internet Marketing 201: Advanced Techniques in Web and Social Media," led by Peter Troast of Energy Circle and Allison Bailes of Energy Vanguard.
The 2012 International Green Construction Code
The International Code Council has published the 2012 International Green Construction Code (IgCC). Here's a free 90-minute webinar providing an introduction to the IgCC and outlining the relationship between various green rating systems, standards and codes. The moderator is the U.S. Green Building Council's Jeremy Sigmon. Learn more about the IgCC from Wikipedia.
More knowledgeable homeowners, more home-performance retrofits?
The race is on: New web-based platforms are leveraging peer influence and user-friendly technology to inspire homeowners to weatherize their homes and otherwise curb energy consumption. Here's a d5R overview of some of these developments, including the "Green Button" initiative launched by the Obama Administration in March. Here's a list of the utilities and service providers supporting the Green Button.
Meanwhile, in "green MLS" news, Chicago-area homebuyers are among the latest to be able to explore a home's past utility bills, green certifications and other efficiency-related data prior to making an offer. In some cases, at least. Sharing this information is now optional for customers of Midwest Real Estate Data, the Chicagoland multiple listing service.
Controversy over deep energy retrofits
A handful of home energy pros have lit up the Twitterverse / blogosphere recently with talk of deep energy retrofits (DERs) -- especially those impacting older homes. "This is a holy war," wrote Energy Circle's Peter Troast in a comment on Sean Lintow's blog on April 8th. "Just as the right has unified in its hatred of health care reform, the preservation community has chosen an equally strident and disciplined opposition to energy retrofits that impact the envelopes of buildings of historic significance." Wrote John Poole on his blog: "The term 'Deep Energy Retrofit' freaks historic preservation people out". Because the goals and techniques behind very old homes were quite different from more modern standards, "there is considerable concern (and frankly, good reason for it) amongst preservationists about how the application of non-traditional treatments might affect traditional structures."
An edible, incredible insulation
What's the first full month of spring without a little April Fool's humor? Or -- wait a minute -- is Celluloaf (the first insulation that smells like fresh-baked buns) for real? The folks at Energy Circle would have you believe so.
Word also spread April 1 that new homes certified in the LEED for Homes program "will be required to have 100% windows in all above-grade walls...." Why? "Well, sand is a rapidly renewable resource, so all-glass buildings can't be all bad," said alleged certified rater Carlos Madrid, quoted in the Energy Vanguard blog.
Last month we talked about how important it is to send statements on a regular basis. We also focused on ways to collect money on the spot, therefore eliminating the need to send statements altogether. But, even if you do what we talked about last month, the fact remains that some people, for whatever reason, will not pay their invoice when the job is completed. This month we are going to take a look at a simple but effective collections policy to get those last dollars paid.
Step one is to focus. It is a simple principle, but effective. What you focus on gets done! If the focus of the company is selling maintenance agreements, maintenance agreements get sold. If you focus on customer service, all employees become engaged and you have happy customers. Guess what? If you will focus on collections, your unpaid invoices will be paid.
Many of our programs are sponsored by distributors. When our boot camp course is over, I often ask the distributor what percentage of their contractors pay every month, within the 30-day pay period. Most tell me 10-15 percent of the entire customer base pays on time, every month. I have found that to be a pretty normal percentage among distributors.
However, a few years ago, I asked this routine question. In this case, the distributor had several family members working in the company, which meant each had a vested interest in making the company profitable. I was told one family member's only job was collections. That person followed up with every contractor every month if the bill was even one day past due. Do you know what percentage of their contractors paid on time? The number was 95 percent. How did they do it? They focused on that part of their business, and got very positive results!
Let's talk about the customers who do not pay when the job is completed. If you want to collect their money, you will need a plan. A system must be put into place and followed.
Here is a very simple collections policy:
Have a written policy. Be sure the collections policy is well thought out and in writing. Every person who has any part in collecting money should be thoroughly familiar with the "company policy" when it comes to collections.
Have a stated time for invoicing to take place. The policy should be that an installation job or service call should be invoiced the same day it is completed, or at least within 24 hours. Do not wait till the end of the week, or month, to invoice the customer.
When payment is past due, a second notice should be sent IMMEDIATELY, requesting payment within 10 days. Send out a statement when payment is not received. Again, you would be amazed at the number of contractors who send the original bill, then never send a follow-up statement when payment is not made. When the statement is sent, request payment within 10 days. There is no reason to allow them an additional 30 days to pay their overdue invoice!
If payment is not made in 10 days, then call the customer and find out why. Have someone in the office make the initial call, but not the owner or manager. Why? About 70 percent of the time, customers will pay their bill when they receive a physical phone call. Yes, you will get all kinds of excuses: "We never got the invoice." "It must have been lost in the mail." "Are you sure you sent one?" However, when the initial call is made, most customers will pay their bill.
Be sure the office person making the call keeps a detailed log. When was the call made? Who did they talk to? Before the phone call ends, ask the customer when they will be writing you a check. Keeping good records may become very helpful if you ever have to go to small-claims court. The person with the detailed records is usually the one who wins the case!
Follow up with a second call if payment is not received as promised. This is where you get the owner and/or manager involved. There is something magical about the owner or manager calling the customer. They get results that no one else gets.
Use an attorney or collections agency. Neither of these are usually great options. However, you might want to make a note to call your state bar association and get a list of last year's law graduates. Believe it or not, not all lawyers are employed and many are under employed. Give them a call and ask them to write some collections letters for you. When a customer receives a letter from a lawyer, it's effective and they have no idea if the lawyer is a one-man operation or with a multi-million-dollar law firm.
When it comes to collections, you need to have a plan. Take the time to sit down with your team and hammer out a collections policy that works for your company.
Want a little more help on collections? Check out Grandy & Associates' website special. Five great audio presentations by three outstanding national speakers.
We are chagrined. We realize we should have given you more clues to last month's stumper, sent in by Jamie Clark of ARRONCO Comfort Air in Lexington, Kentucky. (But we beg your forgiveness because it's a fine balance! If we tell you too much we give away the easy answer; tell you too little, and you don't have the information you need to make an educated guess). Readers will recall that Jamie replaced two broken air systems with Carrier® hybrid systems only to find that after the project was completed, all the registers in the house started sweating, with the humidity level over 70 percent! All equipment was installed correctly, air volumes were right, the equipment was perfectly sized, all duct work was sealed (with less than 10 percent leakage).
Despite the gaps in information, we received several creative responses to the puzzle. Dean Smith of Santee Cooper in Moncks Corner, South Carolina came closest, guessing that the customer had the system's fan in the "on " position and the blower motor was picking up the condensate from the wet coil, which was being distributed back into the home. Well done Dean!
Jamie reveals what was really going on. When he went back to the house on the second visit, he visually inspected the duct work to make sure it wasn't pulling in excessive air and humidity from the attic. But when he lifted the scuttle hole hatch it started to float; there were two full size attic exhaust fans in a 6,000 cubic foot attic. They put the entire house on such a negative pressure, they were sucking in moisture from the outside. Says Jamie: "It was like having a blower door on 24/7". Important note: The first time Jamie visited the house for his initial assessment of the broken central air system, it was a cold and rainy day, so the attic fans weren't running. To solve the problem, Jamie disconnected one attic fan and turned the other one to 120 degrees so it would only turn on in extreme heat.
What's Wrong with this Picture?
We know, we know. There's a lot right with this picture, such as the gorgeous view of Lake Tahoe in the background and the awesome powder for skiing. But from a whole-house-as-a-system perspective, what's wrong with this picture? What is the owner trying to do, and what would be a better solution?
Thanks to our own Larry Zarker, BPI CEO, for sending in this dandy shot. He offers the following Winston Churchill quote to explain what's going on here: "You can always trust the Americans to get it right, after they have exhausted every other possibility."