Keeping the Home Fires Burning
With the coldest months setting in, a bipartisan coalition of New England senators is working to restore full funding for the federal Low Income Home Energy Assistance Program, which helps thousands of low-income households stay warm amid rising heating oil prices. That’s in response to President Obama’s late October decision to slash funding to less than half of its 2010 appropriation of $5.1 billion. More at Bloomberg BusinessWeek.
Sniffing Out Danger
The nose may not know the precise cause of a building problem, but it often knows one exists. That’s where home-performance professionals come in. In one late-November case study in Green Building Advisor, Scott Gibson wrote of a gas odor made apparently only when energy auditors ran a blower-door test. In another, Tristan Roberts explored a number of house smells that could indicate problems with air leakage, dampness or carbon monoxide.
Building Sustainable Businesses
Which contractors are vulnerable to changing market forces, and which stand a solid chance of long-term sustainability? Blaine Fox concluded his two-part series on this topic in the November/December issue of Home Energy magazine. Highlights from the series are in daily5REMODEL.
How Much for that Retrofit?
d5R also showcased some potentially useful training tools for home-energy pros: this database of retrofit-related goals and costs through the National Renewable Energy Laboratory’s (NREL’s) Residential Efficiency Measures Database, and this open-source platform for free weatherization-related classes and training through the U.S. Department of Energy.
Speaking of Training...
Watch out for poor teachers targeting energy auditors, wrote building science expert and trainer Allison Bailes on his “caveat emptor” blog post. “We learn by doing. Yes, we do need to see modeling of the things we learn, but when all that happens is a teacher standing in front throwing information at students, it's a tremendous waste of time. Just because the training material is being delivered doesn't mean it's being received.”
Holiday Shopping
Shopping for your favorite home-performance pro? Green Building Advisor’s Martin Holladay reviews a whole stack of books on insulation and energy efficiency.

Your prospect called earlier, leaving a message explaining that they hoped you would fix their house even though they received several bids lower than yours. According to their message, they are hoping that you could make all their dreams possible by lowering your price to match a lower priced proposal and place them in your schedule as soon as possible. Immediately, your hopes for a better year in ’12 are somewhat diminished.

There are three rules to remember in situations like these:

1. Owning the higher priced proposal gives you the advantage of more choices when the client asks for a lower price.
2. When the prospect asks you to match a lower price, you have the right to analyze the competing proposal in order to see if there is a valid comparison.
3. You can never lower the price without changing the specifications to reflect that your prospect ‘earns a discount.’

You return the call at your earliest opportunity and arrange to meet face to face to explore the possibilities. Negotiations in these situations can only be handled in person, with all the decision-makers present. Around the kitchen table you first rebuild the trust and rapport you had previously so carefully gained, by talking about common interests and those personal details you learned earlier.

Then, you encourage the prospect(s) to recount what has happened since you delivered your proposal originally. Pay attention, you’ll get a glimpse of the world through your client’s eyes. When there is a pause in the story, look at the speaker directly and raise your eyebrow, this is the international body-language signal for: ‘tell me more.’ Note the other price you are expected to match and then discount the difference between your price and the other by 50%. If there were to be an adjustment, this likely would be an acceptable price.

When their story is finished, it’s your turn. Regarding the request that you lower your price to match what is possibly someone else’s mistake, I like to respond; “Sure I could lower the price. What would you like to substitute, make smaller, or eliminate?” Sometimes customers ask to lower the price only as a test. They want to know if the price is really firm, and this response leaves little room for doubt.

The prospect: “We love your design and the specifications are perfect, we want the project just as you presented it.” Your reply: “The specifications and design reflect the price. The only way the price can change is if we change the proposal (see Rule #3 above.) Let’s go through the proposal item by item.” The savvy contractor focuses on those items where some savings can be gained by substituting lower priced products or materials that may not diminish the finished product in a major way. Calculate how much cost savings can be realized by making any acceptable adjustments. Talk over the proposed changes, confirming the prospect(s) agreement on each item without mentioning any specific numbers, yet.

Ask to look over the specifications and plans accompanying the competitor’s proposal with the ‘acceptable’ price (see Rule #2.) If you can spot glaring differences anywhere, make a note for future reference, but use this info only if needed.

Now calculate how much of a concession you can afford in the overhead and profit included in your original proposal without diminishing your ability to earn a desirable return from the job. Sustained cash flow doesn’t happen by accident. Knowing what percentage of each dollar of income is consumed by overhead, and having a vivid picture of what kind of profit you need to maintain your incentive to create satisfied customers is vital in these types of negotiations. Combine this concession with the earlier amount you arrived at by revising the specs and explain to the owner that by making the desired changes you could adjust the price downward by X dollars. Avoid itemizing the savings for any particular item. Now the decision is in the hands of the prospect; take it or leave it.

If the prospect(s) respond that your revised price doesn’t match the competitor’s, only now will you mention differences between the two sets of specifications you observed earlier. Be prepared to explain why your firm chooses not to jeopardize the integrity of any project by cutting corners in certain areas. Your prospect(s) will likely value your integrity, and may do the right thing by signing your newly revised proposal. If not, you decline the project and look elsewhere for your next client.

For the long-term sustainability of the home performance industry, the price of efficiency, with or without incentives, will have to be comparable with the price of energy from the utilities. To succeed, contractors will need to continually deliver more savings and higher customer satisfaction at an ever-lower unit cost. That means contractors must be committed to continual process improvement.

The near-term future of energy efficiency requires us to promote and use all available program incentives. To support these programs, savings have to be verifiable and transparent to programs as well as customers. Contractors need to develop internal systems that produce these process improvements and verifiable savings. A systematic approach tracks customers from intake through job completion. Maintaining detailed, integrated records of the building, the retrofit and quality assurance measures taken proves value to the customer, and ultimately reduces long-term job costs as well as program compliance costs.

Automated tools such as integrated modeling and program reporting software can help support this process. But the process begins with a company commitment to operate the business on a fact-based and systematic model. Two steps a company can take to prepare their business toward a more automated system is to become more comfortable with enhanced audit software and to familiarize themselves with energy efficiency program software. Through this familiarization, your company will become more efficient at tracking, modeling and reporting.

While automated software systems can be an important tool that streamlines this process, training a workforce to collect data and understand how it’s used is necessary for use of an automated system, a spreadsheet or a checklist. Data must be collected thoughtfully, and stored and transferred to minimize errors.

Homeowner Engagement

From initial engagement to program completion, a successful business system relentlessly focuses on the homeowner user experience. Important components of the business system that support this focus include:

• Assessments that are simple and easy to communicate
• Customer tracking and communications that relate back to a common set of information
• Market research that provides a foundation for understanding your customers

The workforce component of this process is again critical to its success. At many points in the process, company employees will be the interface between your business tools and the customer. People and processes must interact in the business system to produce the desired effect.

In the end, no software can replace the kitchen-table experience you and your employees will have with your clients. Having smooth business systems, reporting, automated communication, etc. helps to support the face-to-face personalized experience you can provide your customers.

If you have a system to track the homeowner’s personal information, home energy efficiency needs and program specific information, you’ll be better prepared to have that kitchen-table experience. You’ll be able quickly assemble reports and other data, which will allow you to spend more time educating the homeowner in person.

For example, contractors doing audits for one of EnergySavvy’s utility customers in the Pacific Northwest will have a software tool that doesn’t just keep track of the homeowner’s information and house conditions, but also tells them which utility rebates have already been redeemed for a house being audited – critically important information for the contractor to upsell the homeowner from audit to retrofit.

Trade Ally Management

Communications and coordination with trade allies are needed to create and sustain a high-functioning partner ecosystem. The technical pathways for staying in touch with partners have multiplied many times over with commercial and social media. Enhanced communication is important for every company because it helps to close business with a customer.

Every marketing message, initial engagement, trade ally conversation or other point of contact is a chance to guide a homeowner to the energy efficiency programs and services that are the most cost effective and beneficial for them. For example, all homeowners that go through EnergySavvy’s Online Audit and fill out the lead form receive automated follow-up emails that reference their specific online assessment results – upgrades to system components (insulation, air sealing, HVAC, etc) that make the most sense for their home retrofit.

Our software EnergySavvy Program Optix is a tool that connects contractors, auditors, retailers, lenders and other partners to simplify the energy efficiency process. If you’re working with a local or state energy efficiency program that you think could use improved program transparency and communication, you can encourage them to embrace software solutions such as Program Optix to improve overall program facilitation.

Results Tracking

A business must track data and workflow in order to improve and meet external stakeholder reporting requirements. By tracking the project workflow from beginning to end, a business shows transparent results in real-time. It's easy to identify what's working, which trade allies are performing well, where projects get derailed, and ultimately, how the service fits together to deliver savings.

This enables a business to be innovative and accountable at the same time, ultimately returning to the core principle that an improved business process on the side of your company creates a positive customer experience for your clients. In turn, you’ll see an increase in revenue for your business.

A results tracking system can capture homeowner details and tie it to specific home building science profiles, as well as collect data from the in-home auditing software and use it to generate pre-filled documents and reports for the homeowners or program managers.

Stump the Chump editors have a humble confession to make – we may not have provided you with everything you needed to know to solve last month’s stumper. We probably should have told you that the home had sofitts which were not vented, but we were afraid of revealing too much (and spoiling your fun!). Congratulations to Paul Button of Energy Audits Unlimited in Manchester, New Hampshire who come closest to solving this one. Our loyal readers will recall that the problem was ice dams on a two story home with a shingle roof. Because the home had a furnace and ductwork in the attic, the underside of the roof deck was spray foamed with 5.5 inches of two pound foam to bring the attic into the envelope. However the ice dams persisted. Additional facts: after the spray foam was completed, the homeowners had the shingle roof covered with a new metal roof, and replaced the furnace/ air conditioning with more efficient units.

Rob Granger of YES Foam Insulation Specialists, who sent us this stumper, adds that the metal roof caused more heat to radiate into the sofitt area and this lingering heat melted the snow causing ice dams. His solution: the sofitt was opened up and foam was sprayed to the roof deck which solved the problem of the ice dams - no heat was generated and stored within the sofitt area any longer.

Paul Button has 30 years of experience as a mechanical engineer, electrician, and energy auditor, and is the owner of Energy Audits Unlimited (EAU), which has performed over 1,000 residential and small commercial audits. As a BPI affiliate, EAU has trained many auditors and is now expanding to begin training crews. We are proud of our relationship with BPI and will continue to raise the bar in home performance.

Below is this month's puzzler, a test of your home performance know how. Figure out what is going wrong with this house, write it up along with your prescribed solution, and send it to us at lmcdowell@bpi.org. If you're the first person to get the right answer, we'll feature you, your company and your answer in the next issue of Performance Matters!

NEW FEATURE – JOIN THE DISCUSSION! Each month's Stump the Chump challenge will be featured as a topic on BPI's discussion page on Home Energy Pros, the home performance industry's very own social networking site. To send your answer there, and discuss with other Stump the Chump fans, simply visit BPI's discussion page and click on the right-hand 'Sign Up' box to create a profile, then add your comment. Don't forget to ALSO send your answer to lmcdowell@bpi.org to enter to win the contest, and be featured in the next issue of Performance Matters!

The Problem:

Jerry Blemel arrived at the timber beamed 60+ year old home to quote a new heating system. While there, the homeowner expressed deep concern about an ongoing problem. The complaint: "I have a fireplace that is located in a back room in the rear of my home. Why do I smell a strong smoke odor in the front of the house when the fireplace is not on?"

The smell rarely happened, but when it did it was very strong, and worst in the front vestibule area, which included a closet and half bath with a vented exhaust fan. The ceiling and walls in the vestibule were plaster, but the ceiling in the half bath was a dropped ceiling.

Simple observations:

• Above the dropped ceiling was a small gas furnace servicing an additional room.
• The vent fan duct had been run into the return air of the small furnace.
• The main furnace serviced the rest of the house.
• There was a sealed damper in the fireplace, thus no backdrafting occurred there.

Problem: What was causing the occasional smoke odor to occur? Hint, in order for the problem to occur, two conditions had to be met.

Think you know what the problem is, as well as the solution? Send it to us at lmcdowell@bpi.org.