Sales Strategies Roundtable

April 16, 2006
Home Performance Special Issue 2006
A version of this article appears in the Home Performance Special Issue 2006 issue of Home Energy Magazine.
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        The sales process starts the minute a company representative enters a potential customer’s home. In the home performance business, all sales calls start with an assessment—a diagnosis of a home’s problems. Home Energy asked four leading experts—Dick Kornbluth, Larry Taylor, Darin Hughes, and Carl Seville—to tell readers how they coach their employees to turn sales calls into paying jobs.

        Dick Kornbluth: When we were insulation contractors, we marketed insulation services, went on insulation estimates, and sold our company to homeowners who were shopping for insulation. Our sales message focused on our proven ability to deliver the service better than any other company in town. The shift to selling whole-house services has meant a shift in the conversation when we are in the home. A building performance contractor does not sell a product; he or she sells comfort, building durability, and health and safety for the homeowner, along with energy savings.The request from the homeowner may still be for insulation, but the selling process now involves an educational component, and the education goes both ways.We now go into houses and ask homeowners what their issues are. We explain to the homeowners how their houses are systems of interacting parts, and we explain that the interactions may have unintended consequences. We conduct a thorough pretest of the house in order to diagnose its problems.We enroll homeowners in the assessment process, so they see that these interactions are not mere abstractions. Showing the homeowner the flue gases spilling from the water heater when the forced-air furnace distribution fan comes on is a powerful selling tool.Watching smoke blow out of a wall switch when the blower door is running demonstrates thermal bypasses better than any textbook.The initial testing has uncovered significant health and safety issues in a substantial number of the houses we investigate, which not only provides for a slam-dunk sales opportunity but also reinforces how important the work we do is.We also routinely posttest the homes we work on, to ensure that we haven’t introduced any health and safety problems through the work we’ve done. Sometimes posttesting reveals that our insulation and air sealing work has made the house sufficiently tight that an additional mechanical ventilation system is needed.This is an additional sales opportunity, although some homeowners don’t appreciate being told at the end of the job that they need to spend more money.
        Selling solutions to whole-house problems requires the technical skills needed to diagnose a home and develop a workscope. But in most markets, good diagnostics alone will not sell the jobs; you need good salespeople. Unfortunately, we have found that building performance technicians often want to be left alone so they can focus on their job. In contrast, salespeople are people oriented; they want to connect emotionally with homeowners.Although there are excellent diagnosticians who are good salespeople, I believe it is easier to train a salesperson to be a diagnostician than it is to train a diagnostician to be a good salesperson. Early in 2001, we made the decision to train our sales force to do the diagnostics, and we now have seven salespeople who are certified diagnosticians. Since technical knowledge is critical both to diagnose houses properly and to sell whole-house contracting jobs,we hold weekly technical training sessions for both salespeople and building performance technicians.

        Larry Taylor: As an HVAC contractor, you had a tangible product to sell and could point to a new piece of equipment that the customer could touch and feel. Now, as a home performance contractor, you no longer have that tangible product on every job. Instead, you are dealing with air leaks, thermal bypasses, combustion safety, and air quality issues that are not visible to you or your customer.
        To sell your new services, you will have to change the way you approach the sales process. You have to remember that you are no longer competing with the box sales contractor. Your new approach will require you to make many changes in how you do business. You will conduct more tests before presenting a proposal.You will have to train new comfort consultants who understand the whole-house concept and you will have to establish new compensation plans for them based on the new results they need to provide.
        We have created waivers for customers to sign who do not want to correct any health or safety problems that we have found.The waivers also serve to convey to the customers how very serious we are about their health and safety issues. This alone will help win a customer’s confidence and will demonstrate how different we are from the box sales contractor.
        Since you are moving into a market that typically has a higher sales price, financing options will be a large factor in your offering. Make it easy for the customer to purchase from you. You are now competing more than ever for the discretionary income of your customers, and other retailers are competing very hard for that income, as well.

        Darin Hughes:When I started selling home performance contracting (HPC) services,my close ratios leapt up to more than 70%.Even more impressive is the number of prospects who sign up for an assessment after an initial, purely educational call.All I do is explain what HPC is and how it offers intelligent and process-driven answers to their problems, and they are completely bought in from the start. Most customers respond to this educational call by asking for an assessment. We then go to the house and perform a comprehensive, computerized energy audit.This audit includes a blower door test to measure and locate air leakage in the building envelope, insulation inspection to locate missing or thin insulation, a furnace/boiler efficiency check, a furnace distribution system test to examine seals and ducts, and a health and safety analysis to detect gas and carbon monoxide (CO) leaks and ensure that all combustion appliances are performing safely.
        After the audit, customers receive a computer-generated report outlining the recommended improvements and the associated estimated energy savings.There will be several options, so homeowners can choose the plan that best fits their budgets and their needs.We also provide low-cost financing options to qualified customers to make the decision to proceed with the work that much easier. Put all these building blocks in place, and you may find your own close ratios rising.

         Carl Seville: Selling home performance as part of a renovation project poses its own set of challenges. I have determined, after a career in the industry, that most remodeling clients have budgets that are lower than the amount they need to accomplish their goals.“Renovation is a series of compromises” is a recurring theme for many remodeling clients as they adjust their expectations to meet their budgets. It is not easy for most homeowners to give up the granite counters they have their hearts set on, let alone allocate several thousand dollars additional for invisible improvements to create a high-performance home.
        Frequently, the clients who are most interested in home performance are those least able to afford the additional cost. Wealthy clients are not necessarily more concerned about energy efficiency and air quality, and the fact that they can easily pay higher energy bills may make them less inclined to invest in home performance. The challenge is to make the work affordable and appealing to clients at all income levels.
        When including home performance as a part of home remodeling, there are two options to consider. Home performance work can be included in the initial contract, or it can be provided as a change order once the job is underway. When he was presented with the option of making his house an EarthCraft renovation project, one former client agreed to do so early in the design stage; and upgraded insulation, HVAC efficiencies, and a comprehensive air sealing package were included in the contract for the project. Another client, more reluctant to commit before construction started, decided to upgrade his insulation and HVAC systems during the course of the project. In this case, we estimated that the additional costs would be paid back in energy savings within four years. On certain projects, such as second-story additions, it is relatively easy to include upgraded insulation, air sealing, and high-efficiency mechanical systems in the base project. The increased costs are a relatively small percentage of the entire project budget, and in most cases the homeowner is easily convinced of the added value.
         Many homeowners, however, are very budget oriented and are not ready to proceed with performance upgrades, and their associated extra costs, at the outset. As the project progresses and contingency costs diminish, these clients become more comfortable with the construction process. This gives the remodeler an opportunity to sell performance improvements through change orders. In both cases, the typical remodeling client does not request home performance features in his or her project. The contractor must take every opportunity to explain the benefits of these features and sell these additional services.
        At SawHorse,we found that most of home performance is simply high-quality building practices, and we changed many of our standards to meet these critestic in our HVAC systems; installing insulated attic hatch covers on all attic stairs; using advanced framing techniquesria. The changes we made included installing spaceguard pleated filters and sealing all the ducts and plenums with ma to reduce material use and improve the effectiveness of insulation; and installing comprehensive air sealing packages, including foam sealants around all windows and caulk at all wall plates. In one particular project, where the homeowner did not allocate extra money to meet EarthCraft House standards, we were able to meet these strict criteria and stay within the target budget simply by building according to our new, higher company standards.
        On smaller, more confined jobs, such as kitchen or bathroom remodels, home performance is essentially a separate project. If the owners intend to remodel only the bathroom,it may take quite a bit of convincing to get them to spend several thousand dollars more for home performance work, especially if they were unaware of their home’s deficiencies. One couple contacted us to perform some minor interior renovations on a house they had just purchased. During the course of the planning, they mentioned that they were having trouble with some of the new HVAC systems that had been installed before we met with them. When we performance-tested the house, we found that the HVAC work was not accomplishing what the owners wanted. One system was vastly oversized, and another did not effectively condition the space it was designed for. Ultimately these owners opted to install spray foam in the rooflines and crawlspaces. We made changes to the HVAC systems to improve their performance,and we added high-efficiency filters, resulting in increased comfort and efficiency. In the case of an interested and willing client, this work can be included at the very beginning. Remodelers may jeopardize their relationship with clients who are not inclined to upgrade their houses by raising home performance issues. Contractors having the reputation that they do, many homeowners are wary of sales pitches for extra services. If you can include home performance work in a project, do so. If not, do the best you can. I have always believed that it is best to accomplish as much good as possible whenever possible. If you expect perfection right away, you will become disillusioned, and you may lose further interest in home performance. Incremental changes have value. I would rather see 10,000 homes completed with minor home performance improvements than only 10 homes completed perfectly. Those 10,000 homes have more impact on the environment, and have a positive effect on many more people, than the 10 homes will ever have.
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