How Do You Market Your Energy Auditing Co?

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Permalink Reply by Bud Poll on February 4, 2013 at 1:44pm

Hi Noah,
That's the 64 thousand dollar question, (but you're probably too young to remember that show :). The most successful businesses of almost any type were experts in marketing long before they became experts in their selected field. The markets for energy auditing will very from zero, where utilities et al are giving it away for free, to successful contractors who have integrated the process into the front end of their business. Independent energy auditors that perform audits ONLY are not doing well, at least from what I have been reading.

Now, that doesn't make this a bad business, but it is not an automatic Cinderellas story, as I thought it would be. Fortunately for me, I'm retired so this is fun, whether I make any money or not. But, when you factor in the required revenue stream, very few will be able to survive on auditing only.

I'm willing to share, although the details can be depressing, but perhaps it can help you choose a direction with a future.

What's your experience and training? And most importantly, your goals.

Bud

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Permalink Reply by Noah Glatfelter on February 9, 2013 at 3:42pm

Bud I plan to make this a self sustaining profitable business.  I hear this trend more and more that you can not survive on auditing alone.  Is that because contractors like me, are willing to give audits for free to customers (after 150 utility rebate).  Also see me reply to john.  

I know that it takes an investment to get started, I have my equipment, and am a BPI BA.  I have a bachelors degree in Business management and marketing from Penn State.  I am young, 24, and have recently left my steady corporate job in pursuite of this dream.  Well, that makes a long story short, but I left my corporate job to work with the Builder that employed me for 7 years, throughout college and after.   It did not work out and I began working with another contractor as a subcontractor working in various forms of residential construction.  

I know I can market these services like all other service based businesses, but I was just interested in what successful firms were doing, and who they were targeting.  Have we found a specific tribe that is exceptionally acceptive of our common message?  

Electricity Deregulation has been big in PA recently, has anyone added this to their services?-- Im not sure if they would mix.  

Bud, I am way to young for that show,...lol :)

 

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Permalink Reply by Noah Glatfelter on February 9, 2013 at 3:44pm

I sent my post before reading it, a statement I made should have been a question. i Should have typed"I know I can market these services like all other service based business....right?? 

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Permalink Reply by John Rising on February 7, 2013 at 9:11pm

Noah,
Great question. You really must define who your target audience will be and then market to them. I have found that it is a small percentage of the population that really understands what building science is or why it is important. There is a small case for a ROI but really, you must market and sell the parts that affect people's senses. The comfort factor, the safety factor and the 'doing the right thing' factor. We've dealt with lots of people who only care about the money and they were difficult clients. Landlords may be interested if you can show them the benefits to them, property managers may be interested if you show them that efficient properties rent for more or rent faster.
It takes A LOT of money to start doing this work. Count on 10-15k in tools, and lots of time and money for ongoing education and training. We do auditing and we do the work as well. There is no way we could make it just doing the auditing. Maybe some guys can, but you'd have to do a lot of audits.
Good luck!

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Permalink Reply by Noah Glatfelter on February 9, 2013 at 3:28pm

John, 

Where are you located?  Are there rebates and incentives for the customers from your state?  If so, what are they like.  Im in Pa, and am partnered with the utility company where the electric customers  receive $150 for a test in audit, $900 in direct rebates for improvements  (.30 cents per kwh saved annually up to $900) and then $150 for an exit audit.  

I plan to offer my audits for free, after a $150 rebate, ( we also install light measures on the test in audit free to the customer.  We get paid on avg. $100 for $30 in cost of light measures. So for the audit alone test in, avg. $225 for my time.  I'll provide retrofit work as well, as you do.  I plan to concentrate on insulation and air sealing and sub out the rest.  Also I am a general contractor, Painting, flooring, roofing, ext. Do you offer the same? I plan this to be my foot in the door.... agree, disagree? 

How does your sales process work?  How are you doing thus far if you don't mind I ask , (revenue) 

Let me ask this question, what does your avg. customer look like? Age, income, special interest, type of person ?

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Permalink Reply by John Rising on February 9, 2013 at 8:22pm

Hi Noah,

We're in California where the rebates for the test-in and test-out have been stopped. We are participating contractors in the EUC program where a client can receive incentives of up to 4500. The rebates are tied to the calculated energy savings. I.e. 20% = 2000, 35% = 3500 etc. This program has given us an increase in business, but it is still a supplement to our regular business of doing general construction.
We try to be ahead of the curve and I firmly believe that soon this will all be required as part of general building permits.
Sometimes the energy work turns into other work, but at the same time, we get pigeon holed into being "insulation and air sealing guys" or "energy guys" as opposed to regular building contractors.
There is no real 'average' client. They came from all demographic areas. Hope this helps!

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Permalink Reply by Noah Glatfelter on February 10, 2013 at 5:49am

John, 

I believe that Maryland has a program similar to yours.  I've just started so I haven't reached into that market yet. Here in Pa, the incentives are weaker, however, we do have a program called keystone help that finances the projects 100%, with no down payment and an unsecured loan.  I have checked out your website and from what I can tell, what you have built is similar to what I aspire.  I am not full blown builder like you however, one day.  

I live in colonial america, next to Gettysburg and the need for retrofitting is as strong here as anywhere. However, Pennsylvania is dead.  When talking to the utility program administrator, he informed me that out of the 5 auditors that are participating, NONE have completed any audits.  Like i had said, I am about 4 miles from the md line, and I don't know if all the auditors are going to md. due to the better incentives.  

How about heating fuel type?  That is half the reason i started to look into this field, after finding out that it would cost around $700 a month to heat my home. (propane)  Heating oil is also very big as well. The last company that I had worked for was actually an energy company who had 50,000+ home heating oil customers.   I saw their bills, and its not even fair to compare their needs to someone who say spends on avg. $150 in natural gas to heat their home.   

John, what are you doing right now to specifically market your business   

Ps. I checked out your website and it looks great, did you build it yourself?     

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Permalink Reply by Bud Poll on February 9, 2013 at 6:02pm

Hi Noah,
I started tinkering with energy consulting around 05 (I hadn't really discovered energy auditing back then) and had some ads out just prior to the 08 oil price spike. I can tell you for certain, there is no form of marketing that can compete with soaring energy costs. Fast forward to today and no one back then ever expected America to be talking energy independence or becoming an exporter. Add in an army of energy auditors, an energy bureaucracy created by and for our government (jobs creation), and the (necessary) decline in government subsidies, and this is no longer what I would call a golden opportunity.

Here's your challenge, IMO. What can you become good at that 10,000 underemployed energy auditors can't do as well, for less? You have one degree, that puts you above 90% of the energy auditors out there. But the last 10% have better degrees and there are still a lot of them. PE, ME, EE, all carry a lot more weight.

PA has some of the lowest energy costs in this country, if what I read is correct. That means the "I want to save money" home owners will be few and far between. There is a market for green auditing, where the home owners are interested in other than savings. There is a moral high road that can be followed and who knows what the future will bring.

I'll stop there and let you ponder, but being a contractor as well as an energy professional will make all the difference.

Bud

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Permalink Reply by Noah Glatfelter on February 9, 2013 at 7:08pm

Bud, 

What do you do to market your business specifically. I guess that's why I posted this question. I want to know specifically what works for them. I have been figuring out what my competitive advantage might be, but its an evolving process, at least for me.  If its one thing I've learned in my very little experience in business, its that yes it is definitely important to think outside the box, but only once you've done the the things in the box very well. 

Pa's energy cost are a bit higher than avg. at least for natural gas and electricity. Not to sure about heating oil or propane. 

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Permalink Reply by Bud Poll on February 10, 2013 at 5:27am

When I started I was the only independent energy auditor marketing my services for a population of 50,000, so almost anything worked. Major media is very expensive, but if you can make enough profit from each job it is a possibility. BUT, energy auditing alone cannot handle a $10,000 annual advertising budget and less than that you message will simply evaporate into thin air.

Whatever method you choose, it is the supporting details that will make or break that effort. Business cards, flyers, hand-out packages, web page, social media, public speaking, home presentations, volunteer work, senior support groups, and anything you can do to get your face and your business in front of thousands of people. What is the rule, people have to see your business name or hear your message 7 times before 3% of them will remember it. And that memory will fade quickly if not reinforced.

How many energy audits have you completed?
Going back to your numbers, you are on the low side. But since I can't see what you are making on the construction work I can't say for sure. Also, utility audits often target specific work and fall way short of a comprehensive audit. However, they are designed to get in and get out and thus make money by spending very little time.

If you have a good message, I have found drive time radio to be good. Captive audience and you can vary the station to target the age group you want. They will have all of the demographics.

Bud

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Permalink Reply by Noah Glatfelter on February 10, 2013 at 6:10am

Bud,  

Where are you located? What have you done in the last 7 days to market your business?  I can understand where your coming from not really worried about making money, youv'e done the hard work that people have to do in order to consider yourself retired or at least semi retired.  What line of work were you in before you got into this business?  Sorry I don't mean to sound antagonistic with the questions, its just hard to get a feel for your situation with out them, and knowing yours I feel can help me adapt mine. 

and by the way, thanks for taking the time to reply to my post! :) And I really appriciate all advice you have given thus far.  

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Permalink Reply by Bud Poll on February 10, 2013 at 7:11am

I'm digging out of the latest snow in the fine state of Maine. Advertising for energy work needs to lead the work cycle, which means it should have been done in August and September. Just trailers after that. And I did neither. This time of year, people are thinking about spring, fishing, and getting into camp, not weatherizing. Your construction work would be good to start marketing right now.

Here is one of the catch-22 issues of energy work. I love infrared cameras, but the quality of the images varies greatly with delta T. That means the home owner gets far more value out of winter imaging than they do spring or fall. Some of the summer imaging works up here, but I have never liked the reverse images. I try to focus any work on cold weather. A full time auditing business can't do that and you will often hear them saying IR is not necessary. A tool that lets me see things that are important and otherwise invisible, I call that necessary.

My background is electronics, research at Bell Labs in NJ, but the life style in Maine won out over the Cadillac of jobs so I returned home to open my own business and serviced office equipment and banking computer systems until I retired. Through it all I built some homes and one large (large for me) commercial building. Carpentry would be my second love. I have always been blessed to enjoy what I was doing. To that end, I decided to transition into helping people make their homes more efficient. I was looking for an older camera that could be converted to IR when I discovered FLIR. $10,000 later I had my camera and was set on my current path.

What I had to deal with in the past is not entirely applicable today. Here's a direction for you. Become an absolute expert in building codes, especially energy codes. They are becoming so complex that builders and auditors will struggle to keep up. Those of us who keep pace will find it easier to stay on top of future changes. And many of these codes are becoming mandatory. Add to this, public speaking, sharing this knowledge with others and you will become the expert others seek out.

I envy your age and the opportunity ahead of you and apologize if I sounded negative. But I sure wish someone had been around with real advice when I got started. This is a very rewarding profession. If you have questions you don't want to ask in public you can PM me. To be honest, there are answers I don't share in public as my competition reads this forum as well.
Bud

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