"Eighty percent of success is showing up."
But showing up on time, listening to and responding to your customers’ needs, knocking down obstacles for them, and protecting their homes will get you the rest of the way there.
Grace was probably one of the most motivated customers any one of us would ever have the pleasure of working with. It should have been easy. It should have resulted in a happy customer who was certain to applaud the project and rave about the benefits to her neighbors. Instead, Grace would up shaking her head and wondering about the future of our industry.
If you’re reading BPI’s newsletter, you probably have some interest in home energy upgrades. And rightly so. Despite the economic turmoil, this is still an exciting place to be, and a potentially rewarding livelihood. It’s important to remember, though, that good ideas and good intentions don’t automatically lead to sustainable success and profit. At its core, home performance is still a business, and to succeed you cannot ignore the critical business elements. At the heart of that is remembering that we’re here to serve our customers.
Make it Easy for Your Customers
You’ll spend much of your energy trying to find customers. And whether you’re a contractor that installs work or a consultant who does audits, your long term success depends on winning your customer over and making the project as easy as possible for them. On the front end, common sense (and experience) tells us the easier we make it for our customers, the more likely they are to do business with us. On the back end, happy customers mean referrals—and that means more business!
Let’s start with what’s so obvious, we often forget to do it, or train our crew to do it:
- When people call, answer the phone.
- Return calls when you say you will.
- Show up on time, in clean clothes.
- Protect your customers’ home and property.
- For Heaven’s sake, if you’ve done an audit, get the report back to the customer within days, a week on the outside.
Protect their home. This means don’t leak oil in the driveway, don’t track dirt on the carpet, and don’t let the pets escape. Do keep your customer informed and make sure you clean up after yourself. Ignore this at your own peril. Doing these simple things will beat out 90 percent of your competition, even if you have to pull out the cheat sheet to figure out how to set up your DG700.
Beyond the obvious are many things you can do to make the diagnosis, sales, and installation process easier.
First and too often ignored is financing. Home performance jobs are complex. They often include multiple combinations of insulation, air-sealing, heating, cooling, windows, doors, lighting and appliances. It’s not uncommon to see work scopes exceeding $10,000 or even $20,000 dollars. Most customers can’t—or don’t want to—pay cash for big ticket jobs. If you don’t help them, you’ll either lose them altogether or wind up with a smaller and less complete job. At a minimum, you need to be able to steer customers to financing. Even better, you should facilitate the process and directly connect the customer to the program or lender.
With financing, more attractive rates do help. But they don’t have to be 0 percent - the sweet spot is in the range of 4 percent. At least as important as the rate is the ease of access. The faster and more hassle free the financing, the more likely you are to get uptake. Regardless of the rate, though, have multiple options, even market rate options in your tool belt. If you’re not able or allowed to facilitate the financing, at least be able to direct your customers to the lenders, and let them know what information they’ll need. When you help figure it out and work through it, oddly enough, they’re more likely to figure it out and work through it!
Money is important, but so is time. A process that requires multiple visits to the home is a recipe for failure — bringing in a variety of different trade contractors, the HVAC guy one day, the air-sealing crew another, the insulation crew the next day means the homeowner has to take off work or otherwise adjust their routines. The harder you make it, the less work you’ll have. Contractors who can offer one-stop shopping will have a distinct advantage. We take care of the whole project—with our own crews—for our customers.
A related element is the ability to fully spec and price a project on the first visit. To do this, you need to equip your salesperson with an automated system that can provide the estimate on the spot. If a customer is ready to proceed, they don’t want to have to spend time on another day going over the project. We believe it’s very important to be ready to complete an agreement on the first visit if a customer is ready for that.
But even if your model doesn’t have all this under one roof, make it easy. Have lists of contractors in the various trades. Facilitate the connections. Educate your partners on the need for speed, responsiveness, and quality. If they won’t play, find someone who will. The more you take ownership of the customers’ experience, and the more you knock down barriers and eliminate problems, the more likely you are to thrive.
All the above is true in the “real world”. Adding incentive programs to the mix generally adds another layer of complication. Own the complication. To the greatest extent possible, make any program gymnastics your problem, and look at sorting it out as yet another service you provide to your customers. Walk them through program paperwork, providing incentive, tax credit, and rebate information and documentation, and looking for other ways to be helpful. We go so far as to help customers fill in forms, provide copiers for IDs, tax forms, etc, and even drive to the county clerk’s office to pick up a copy of property tax information if that’s what it takes. The easier you make it, the happier they will be.
And that’s really the bottom line in customer service. We want the Grace’s of the world—and every customer—to look at the energy upgrade experience as a positive one. From a satisfaction, call back, marketing, sales, and profitability perspective, you’ll rarely go wrong with a happy customer. And with the busy lives so many people lead, the easier you make their experience, the happier they will be.
Precision is an inherent part of most home performance contractors’ DNA. These qualities of meticulous measurement and accuracy can also serve you well in becoming a top-notch marketer as you work to grow your home performance contracting company. By applying the same metrics-driven formula to your retail marketing that you would when conducting an energy assessment, you can leverage your own inherent strengths to maximize your marketing and win clients.
In this article, our guidance is for home performance companies with dreams both big and small, who are originating the company from the ground up or are making the transition from a subsidized contractor to a true stand-alone energy services provider. This is not meant for the traditional HVAC or service contractor with a customer base that has already been bought and paid for.
Your Marketing Spend
Maintaining sales in an established residential services business takes a marketing spend of 4 - 6 percent of projected revenues. This jumps to 8 – 10 percent if your company is just starting up or committed to growth, because there’s no established homeowner relationship, and no brand awareness you can rely on to drive business. You are essentially starting from scratch.
Once the budget is set for your marketing spend, you’ll want to commit 15 - 20 percent of that total on building a strong brand, as well as community and goodwill efforts that “spread the word” about your company, your products and your message. The other 80 percent needs to be focused on direct response and call-to-action marketing. After all, you’ve got to get the phones to ring before you can think about anything else.
What Great Growth Marketers Know
It’s not an accident that some companies fail and some companies succeed. The great growth marketers all apply the same principles so that their successes are repeatable and can be expanded for greater results. Here’s what they do:
1. Define the strategy – select the message – pick the medium
Great growth marketers know who they are, they know exactly what their strategic position is in the market, and they know precisely the type of consumer they are selling to. Ask yourself:
- Who are we? What homeowner needs do we expertly fill? What is our value proposition?
- What is my position in the market? Am I the low-cost provider? The high-end provider? The insulation specialist?
- Who is my target audience? Are they most interested in indoor air quality? Are they most interested in energy savings? Who will buy, and what will they buy?
Growth marketers have answered these questions and have then declared their “Strategic Statement,” which will help guide their efforts. The Strategic Statement defines the strategy first, identifies the specific message and identifies the media through which the message will be delivered. Here are two examples of a home performance contractor’s Strategic Statement:
1 – I’m going to educate my target consumers about the benefits of energy upgrades and retrofits through effective needs messaging, and by owning the local Internet searches.
2 – I’m going to target older, more expensive homes and reach that audience by educating the top 10 local real estate offices through energy workshops and I will also pay referral fees to partner REALTORS®.
Once you’ve answered the questions that will help you define your strategy, you should write down your “Strategic Statement” as a guideline for your activities.
2. Track Everything!
Just as you use your instruments to gather key measurements of a home during an energy assessment, so should you be capturing key measurements of your marketing spend during the year. It is essential to put processes in place to gather the sources of all inquiries and sales leads for energy audits and other services. Internet leads can be accurately tracked through analytics, which is the easy part. Inbound phone calls and referrals have to be tracked diligently to answer the question of “Where is my business really coming from?”
Instituting the discipline to know where every sales lead comes from will ensure that you have every opportunity to maximize your marketing return on investment.
3. Know That Lowest Cost per Customer Acquisition (CCA) Wins
When it comes to Key Performance Indicators (KPIs), this is the mother of them all. Simply put, CCA measures the dollars required to acquire each new customer. A new customer is defined as someone who has agreed to spend money on your services. This could be someone who has purchased a $299 home energy audit or someone who has contracted with you on a $12,000 retrofit job.
Measuring your CCA will allow you to be more predictive about your marketing instead of reactionary, or even worse, random. The goal is to close as many jobs as possible within your marketing spend. Spending $30,000 a year and acquiring 60 new customers (CCA of $500) is too high considering the average retrofit job price. But what if you acquired 160 in the same spend (CCA of $188)? Now we’re talking! And now you’re a great growth marketer.
Generally, when it comes to home performance, I’ve observed that the lowest CCAs have been driven by referrals and Internet marketing. Referrals will always cost you the least in marketing spend, provided of course that you do an excellent job in your customers’ homes and that you exhibit superior customer service skills (see Mike Rogers' article above, The ABCs – Make it Easy for Your Customer). Internet marketing done right will drive comparatively low CCA as well. A successful Internet strategy will be very highly targeted so that you are communicating to an audience that is primed for your message, and therefore results in a lower CCA.
Conversely, certain marketing media have historically led to high CCA for home performance companies and should be avoided. Yellow page advertising has been on the decline for years and it would be a mistake to sink large amounts of your marketing dollars in the phone book. And broadcast advertising like local cable TV spots can be very expensive with very little return.
Great growth marketers work the process that allows them to get consistently smarter about how they spend their money. Warm Thoughts has developed a Marketing Planner and Calendar tool that can help you establish your budget and manage your spend this year. If you’d like us to send it to you, email firstname.lastname@example.org.
Here's a case for getting clients to upgrade their 30-year-old insulation and appliances:
According to a new report from the U.S. Energy Information Administration (EIA), total U.S. residential energy consumption decreased slightly in the three decades after 1978 despite a 45 percent increase in the number of homes and the proliferation of appliances and electronics. Chalk it up to more efficient appliances and windows, among other factors. Three times as many homes had central air-conditioning in 2009 (61 percent) than in 1978 (23 percent), but energy use decreased 31 percent on a per-household basis.
Use of multi-pane windows increased dramatically beginning in the 1970s.
The energy savings would be even greater if households hadn't gained so many appliances, according to EIA.
In 1978, for instance, very few U.S. homes had a personal computer, and most had only one television. In 2009, 35 percent of households had multiple computers, and the average household had 2.5 televisions. More than 36 million households had between four and eight rechargeable electronic devices.
The report also breaks down energy use to the level of 16 states. Among other findings,
- 70 percent of California households use energy-efficient light bulbs, compared to 47 percent in Pennsylvania.
- 24 percent of Virginia households use energy- and water-efficient front-loading clothes washers, compared to 12 percent in Tennessee.
Graphs provided by the U.S Energy Information Administration,1978 and 2005 Energy Consumption Survey.
Send us your scariest Home Performance Horror photos! This month BPI is sponsoring a photo contest in daily5Remodel, a week day delivery of news and business intelligence for remodeling professionals. Entering is easy and free, and the winner will receive one BPI certification written and field exam, valued at $550. Scroll to the bottom for details.
Email one of your yuckiest “before” photos of homes in need of energy retrofit work (i.e., moldy insulation, dank damp basements, gaps in walls, ceilings, or a dysfunctional HVAC system) and cleaned up “after” photos once the problems are addressed.
In the example "before" image below, for instance, dirt-saturated fiberglass insulation sits against a basement band joist. This shows that moist air enters the house here, bringing with it mold and other uninviting particles.
The "after" image below shows the sand band joist after it's been properly sealed with two-part foam insulation. Proper sealing prevents air from infiltrating through the cracks on either side and into the house.
To enter the June contest on d5R, send your entry to snapshots@daily5Remodel.com. Include a brief narrative explaining how you solved a problem for your clients. The winner, chosen at the end of the month, will receive one BPI certification written and field exam, valued at $550, administered by one of BPI’s affiliate training organizations.
Kudos to Sean Wade of Impact Energy Solutions in Bellerose, New York for not only identifying the May Stump the Chump problem and solution, but for going above and beyond to treat the whole house as a system! Hearty handshakes also go out to Kebbyn Giffin of Comfortech, Chris Kuiken of C.R. Wolfe Heating Corp, Joan Wilsonof Jackson Heating and Cooling and Daniel Putt of WellHome for providing similarly thoughtful solutions, only not as fast as Sean.
As readers will recall, the first problem was the Smelly House. The basement contained a bare dirt floor with a single layer of gravel on top, and no plastic underneath. Ground moisture was definitely a problem! Paul Button of Energy Audits Unlimited, who sent in this Stumper, reveals that an opening had been cut into the return plenum, and the air handler was sucking damp air into this homemade return grille. The original thin, light blue filter material the owners had stuck over the grille had turned pitch black.
The second problem was that the kitchen was always cold and the bedroom always hot. The damper in one of the supply ducts was completely blocked off, so warm air was getting pushed into the bedroom, where the damper was completely open.
Sean’s solution: “New Hampshire was the recipient of record temperature lows and heavy precipitation in 2009's winter months. The basement was a source of mold and mildew because of the exposed basement floor. Solution 1 would be to lay a moisture barrier and finished floor above that. I would inspect the landscape on the exterior to ensure soil did not extend above the foundation line. Next I would inspect the kitchen to determine insulation values. This would also include air leaks around windows and possible stove vents stuck open. Due to extreme lows , heat loss could be excessive if a vent was in open position or a window was not closing properly. Next, I would inspect the location of the house thermostat. If the location is susceptible to drafts or heat loss, this would cause the furnace to run longer, creating excessive heat in the bedroom. The simple remedy would be to relocate the thermostat to a location not exposed to these conditions. Finally, I would inspect the furnace and duct distribution. The supply side should have some type of air filter. This may be blocked or restricted. The return air should also be unrestricted. I would check the bedroom return and work my way back to the furnace. It is possible the kitchen is not getting the correct amount of air while the bedroom return is blocked.”
Sean was correct about the mold and mildew coming from the basement floor. To stop the foul air, Paul closed off the return grille cut into the plenum with cardboard and metal foil tape. Sean was also correct about checking the duct distribution system to the kitchen and bedroom. To equalize the heat in the rooms, Paul adjusted the two dampers so each was opened halfway.
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 email@example.com. 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!
Thank you to Dick Kornbluth of DickKornbluth, LLC for sending us this puzzler:
A homeowner in central New York State living in a ranch house with brick veneer siding converted a rear screen porch to a heated all-seasons room. The room's walls and attic space were well-insulated. There were no ceiling penetrations and the exterior walls of the room were dense-packed with cellulose. The main attic of the house was well-insulated and had been air-sealed years before. The main house was heated with a gas-fired sealed combustion forced air furnace. The porch addition was heated with electric baseboard heat.
The first winter after the conversion, the house experienced major ice dam problems for the first time in years.
What caused this to happen?
Think you know the answer to the problem? Send it to us at firstname.lastname@example.org.
DickKornbluth, LLC is a consulting business to the Home Performance industry. Dick brings the accumulated wisdom and experience of 34 years as a residential retrofit envelope and home performance contractor to help companies and organizations grow their businesses and manage their projects.