The first article in this series explained why mechanical service contractors are the ideal service providers to offer energy savings to their customers. You understand and maintain equipment that consumes 70% of the energy in a building, you're in the buildings daily, and many of your typical services already improve energy efficiency.
Developing an energy service business would not require an overhaul to how you do business now. What needs to change more than anything is the marketing - how you package, price, and promote energy services. By going to market with your services in a slightly different way, you can be a significant player in the energy services business and start to provide enormous value to your customers through cost savings. Now's the time for this shift in your service offering, because building owners and managers are under tremendous pressure from both the financial markets and the real estate market.
Marketing Mindset Provides Guidelines
Adopting the right marketing mindset is key. The marketing mindset guides you to not just think about the products or services you provide, but to think about how you are perceived by those to whom you're trying to sell. A contractor might ask, “Are we in the business of fixing and maintaining equipment? Or selling equipment?” Actually, you are in the business of improving the performance and efficiency of buildings, and of lowering total operating costs. When Intuit went from thinking of themselves as the personal finance software company (selling Quicken) to a company that helps small businesses be more successful, they appealed to a greater sense of need, and opened the door to many more product and service opportunities. Contractors can do something similar.
People often don't think of “packaging” of services (as opposed to hard products.) But, giving thought to how you bundle various services can help position your company around solving customer problems. A good customer-centric marketing strategy is to integrate energy services into your core service — maintenance agreements. Most HVAC contractors don't include specific energy services as part of their preventive maintenance agreements. But if you do, not only will your service agreement proposals stand out from your competitors', but you will be positioning your agreements as money-savers rather than cost-centers, which is how they are perceived now.
Adding energy to your service agreements is not overly difficult. You could include additional services, such as energy benchmarking, energy assessments or audits, and ongoing energy monitoring in different levels of your service agreements. For example, you could offer a standard plan without energy, a silver plan which includes energy benchmarking, a gold level which includes ongoing energy monitoring, several low/no cost tactics for energy savings, and a platinum level which includes annual energy audits. (You can see an example of a tiered service offering that includes energy services at airadvice.com/contractingbusiness.)
The main difference is going to be how you go to market and communicate what you offer. Your newly packaged service offering should be emphasized in leave-behind flyers, letters to customers or prospects, call scripts, and in pitchbooks or presentations that you use in face-to-face meetings. These marketing and sales collateral should highlight the financial benefits of your “energized” service offering.
When you get to a sales discussion, it's critical that you emphasize financial benefits. Total cost of ownership is a term you've probably heard before. It's a financial estimate intended to help business managers determine direct and indirect costs of a product or system. In the case of a building's HVAC systems, direct costs would be the equipment and installation. The indirect costs would be maintenance and operations.
One of the biggest aspects of operating costs is energy. Energy represents an average of 21% of the total operating cost of buildings, and 33% of the costs that are variable or controllable. So, when you communicate about your services, emphasize that you'll be able to reduce the largest component of total ownership costs: energy.
In addition, as with any sales situation, it's important to remember who the decision makers really are, and what keeps them awake at night. Right now, it's a safe bet that costs are a major pain point. And remember what you're really selling. Is it a differentiated service or is it a commodity? How do you differentiate today? Better trained technicians? Reputation? Price? If that's worked in the past, can you be sure that it will work in today's market? Building owners want to cut costs, and most buildings have few options to reduce utility bills. To set yourself up for higher close rates, change the game and redefine the owner's buying criteria to ones that are value-based.
Where Do You Begin?
It's always best to start with current customers. In almost any business, you're more likely to earn more business from existing customers than new ones, especially when offering something new. As we mentioned in the first two parts of this series, a great starter is to offer energy benchmarking to your current service customers. Benchmarks are a quick and easy way to assess a building's level of energy consumption and how it compares to similar buildings. An energy benchmark will give an estimate of the cost savings that would come with improving efficiency to certain levels. Afterwards, tell them how the next step would identify problem areas where energy is being wasted, calculate how much money is being wasted on energy, recommend solutions, and provide an accurate estimate of the savings that will result.
Kevin Skurski is director of marketing for AirAdvice, a leader in diagnostic technology and programs that enable service providers to improve the energy efficiency and mechanical systems operations of their customers' buildings. Visit airadvice.com/contractingbusiness for more information related to this article series.
Taking Action - Next Steps
To help you get started, visit http://bit.ly/ZmHkc, a special web page exclusively for readers of ContractingBusiness.com. On this page, you can access free downloads of valuable resources and articles related to this entire series of articles on energy services. Start taking action to grow your business through energy services today.
For Part I of this series, visit http://bit.ly/EnergyPart1. Part II can be viewed by visiting http://bit.ly/EnergyPart2.