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It's On My Heart: Energy Audits
Just had a conversation with Eric Kjelshus, who owns
Kjelshus Energy in Kansas City. He has
been in business over 35 years, decided a couple of years ago to change his
company. He made a commitment to doing
what many are talking about, but few do, that is doing whole building
audits. Looking for areas that waste
energy, areas that can be improved if given enough time and effort, and, of
course money.
I asked how it had changed his business. Eric said there is good news and bad
news. He started with the bad. He just finished up an audit that he had
spent a couple of days on. Found 23
areas that needed correction to improve energy costs and comfort. The client decided to bid out the entire
project, had 16 contractors involved to solve the 23 areas. Took lowest bids, when they were finished,
several of the areas were not done at all, many not done properly. For example, the zoning system that was
installed, used the cheapest stats he had ever seen, nothing he would ever
consider using. Eric was frustrated, as
we all would be. Did not seal the attic
return, ended up with 21% duct
leakage. Left a dog door with out a
seal. Under sized the return left with
.92 total SP (max should be .5) for the system
Now for the good. He
just finished up a $43,000 project, he had 16 hours of time spent doing the
diagnostics and report on it as well.
But this time they bought all his ideas.
So he is telling me how much time was spent selling it, 16 hours. It was almost a whine, not quite, I have
heard Eric whine before, but he was still complaining about the time spent. So I said, let's analyze the numbers. He had a $43,000 sale. That is probably the equivalent of at least
10 average orders today. Not sure what
the average ticket is in the residential remodel/replacement business, but
$3-4000 is probably accurate. So we have
one order that is the size of 10. One
customer to pay, instead of 10. It is
ironic, but the truth is that it is sometimes easier to get one $43,000 order
paid, than 10 at $4000. Something always
seems to slow down at least one in 10.
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Take it a step further,
To sell 10 jobs, we probably need to look at 30, average of 33% close
ratio (national average). Let's say we
are good, 50% ratio, that still means we have to quote 20 to sell 10. If we spend a couple of hours on the job, and
maybe some travel time, it is not hard to imagine we could spend a total of 50
hours to sell those 10 jobs. So Eric
traded 50 hours for 16, a smart move.
But wait, how about the cost to generate those leads? Adams Hudson says it takes over $400 to take
a person who has never heard of you and turn them into a satisfied
customer. Eric did not pay for these
leads. They came from the utility in
most cases. He has partnered up with the
local utility, and they actually pay him to run the audits, do some of the
repairs. OK, so it is small numbers, he
may get $600 on an average ticket for the audit. But he did not pay $400 for the lead. And the customer has a problem, or he would
not have called the utility in the first place.
If you go to http://www.greenhomesamerica.com/,
they have a system to do whole house energy audits, sort of a package
deal. You will pay for it, but my point
is that this is a real business model, someone has actually put it into a
franchise. Not endorsing them, just
using as an example.
To see what sort of incentives are available in your market,
go to http://www.dsireusa.org/, they
list all the rebates and credits available for each state. I went to Missouri, there we 45 total. Eric said he uses about 16 different
rebates/credit programs when talking to customers in his market area. Everything from credits for heat pumps, to
duct sealing, to geothermal, lots of options.
So this is not a project that you can just sort of play with, you got to
go "all in", as they say in Vegas. Eric
has, and he is the engineering type that can do what needs to be done. He has invested in the blower door, flow
hoods, infrared thermometers, everything he may need to do the job right. It is getting the know-how then putting it to
practice
So I asked him how it had impacted his business this
year. He said the last 30 installs all
came from audits. 30. Mostly new customers, not his customer base, although he shares
what he is doing with each service customer.
He did not say this saved his business, he did say he would hate to
consider where he would be if he had not taken this stand, changed his business.
Eric said here are 4 things the customer wants from someone
who is doing the audit.
Confidence: that they know what they are doing,
and can do what they say Connected: to the community, part of the local
businesses Saves $
for the person who is the owner of the house/business Lower total energy use, the footprint is
smaller
Eric gave me a couple of links for more information:
http://energydoctors.org/
http://www.proenergyconsultants.com/
http://recurve.com/
http://www.hathmore.com
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I went to a Northern Colorado
Renewable Energy Association meeting
last night. Met a man who does
energy audits full time. He has done over
140 of them this year, almost one a day.
His company gets $400 for each audit, do the math. They have done about $60,000 in business from
audits. The opportunity is that they
don't do anything else. He has to refer
the homeowner to someone else to do the work.
It makes it tough, sometimes the other trades just don't do what they
said they were going to do, it goes south fast, reflects on his company. Eric has a much better business model, he
does the audit, then helps with the solutions.
So there you have it, at least
one man's ideas on the market today.
Eric told me this morning he was glad he decided to move into the audit business;
it has been good for him. He had a
couple of audit jobs this week that had turned into remodels that were going to
help make his month.
Is getting into the audit
business right for you? I can't tell
from here, but it may be the very thing that can get you in front of some folks
who want to spend money on their homes to make them more energy efficient, to save
some money, to do the right thing for our planet...
The reasons go on and on, you have to make the
call. Thanks for listening, we'll talk
later. ---------------------------------------------------------------
JIM HINSHAW 
President
Sales Improvement Professionals Inc.
Phone: (602) 369-8097
Email: JimHinshaw@SipTraining.com
Web: www.SipTraining.com
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