Home Performance Program Design -- Part 1, Engaging Contractors

THE CONTRACTOR-PARTICIPATION-INDUCING

HOME PERFORMANCE
PROGRAM
SM A RT DESIGN
RECIPE
Part 1
A MIKE ROGERS MANIFESTO
© 2012 Mike Rogers

IF YOU WANT TO SAVE A LOT OF
ENERGY IN A LOT OF HOMES, YOU
NEED A LOT OF QUALIFIED
CONTRACTORS WILLING TO HELP!

It turns out home performance
programs don’t exist in a vacuum

The market – the consumer/contractor
interface – is where ENERGY is saved

UNFORTUNATELY:
CONTRACTORS ARE OFTEN VERY
HESISTANT TO PARTICIPATE

TO SCALE HOME PERFORMANCE:
WE NEED TO UNDERSTAND
WHY THEY’RE RELUCTANT,
AND CHANGE THAT.

recŸiŸpe n: A set of instructions,

including a list of the
ingredients required

LIKE THIS…
Eye of newt, and toe of frog,
Wool of bat, and tongue of dog,
Adder's fork, and blind-worm's sting,
Lizard's leg, and howlet's wing,--
For a charm of powerful trouble,
Like a hell-broth boil and bubble.

William Shakespeare
Macbeth, Act 4, Scene 1

…ONLY DIFFERENT

KNOW THIS:
HOME PERFORMANCE WORKS

If the program disappeared tomorrow, we
would keep doing it. Home performance
makes sense for our business.
-Jerry Unruh
ABC Cooling

SO HOW DO WE GET MORE
CONTRACTORS TO SAY:

If the program disappeared tomorrow, we
would keep doing it. Home performance
makes sense for our business.

This should be a program focus!

THE PROGRAM MUST MAKE SENSE
FROM A BUSINESS PERSPECTIVE!

WE KNOW, THAT DONE PROPERLY:
“Home performance makes sense
for our business.”

WE NEED TO ALSO ENSURE:
“The Home Performance Program
makes sense for our business.”

KEY INVOLVE CONTRACTORS

INGRE- REWARD WHAT YOU
WANT TO SEE
DIENTS TAP INTO CONSUMER
MOTIVATORS
DON’T KEEP MOVING
THE CHEESE
STRIVE FOR CONSISTENCY
WORK CLOSELY WITH
CONTRACTORS


WANT TO SEE
DIENTS


WANT TO SEE
DIENTS LEARN THE BUSINESS


WANT TO SEE
TAP INTO REAL
CUSTOMER MOTIVATORS


WANT TO SEE
TAP INTO REAL
CONSUMER MOTIVATORS
DON’T KEEP MOVING
THE CHEESE


WANT TO SEE
TAP INTO REAL
CONSUMER MOTIVATORS
DON’T KEEP MOVING
THE CHEESE
WORK CLOSELY WITH
CONTRACTORS


WANT TO SEE
TAP INTO REAL
Nice list, but what does it MOTIVATORS
CONSUMER mean?
DON’T KEEP MOVING
THE CHEESE
WORK CLOSELY WITH
CONTRACTORS

KNOW“It’s probably better to have him inside the
THIS:
HOME tent peeing out, than outside peeing in”
PERFORMANCE WORKS
-LBJ

KNOW“It’s probably better to have him inside the
THIS:
HOME tent peeing out, than outside peeing in”
PERFORMANCE WORKS
-LBJ

THAT MAY BE TRUE. BUT WORRYING ABOUT PEE MISSES
THE POINT. IT’S A GOOD IDEA TO HAVE CONTRACTORS
WORKING WITH YOU TO GET IT RIGHT. IT’S NOT HELPFUL
TO KEEP THEM AT A DISTANCE COMPLAINING, OR
WORSE, IGNORING EVERYTHING YOU DO.

“PRESENTING TO”

IS NOT THE SAME AS

“DISCUSSING WITH”

in n ing!
From the beg
V
Involve Contractors
•  Buy-in is a process—not something you get
someone to sign onto after the decisions are made.

•  Talking with, and observing, contractors is a great
way to understand what happens in the market
and what barriers need to be overcome.

•  Pulling contractors in before the program launches
means they can start preparing ahead of time—
and if they see it as a worthwhile program, they
will prepare!

•  OK, remember the pee/tent thing, if you must.

At the end
of the day

WHAT
DO
YOU
WANT?

At the end
of the day MEETINGS

WHAT ATTENDED?

DO
YOU
WANT?

At the end
of the day MEETINGS

WHAT ATTENDED?
AUDITS
PERFORMED?
DO
YOU
WANT?

At the end
of the day MEETINGS

WHAT ATTENDED?
AUDITS
PERFORMED?
DO WIDGETS
INSTALLED?

YOU
WANT?

At the end
of the day MEETINGS

WHAT ATTENDED?
AUDITS
PERFORMED?
DO WIDGETS
INSTALLED?

YOU WHOLE-HOUSE
ENERGY SAVINGS?

WANT?

“In this world, you get what you
pay for.”
- Kurt Vonnegut
in Cat’s Cradle

“The contractors in our program are
Program Admin installing too many windows. That’s not
what we’re trying to accomplish.”

“Why do you have a $150 per window
Mike rebate if you don’t want to see windows
being installed?”

1. AUDITS DON’T
SAVE ENERGY*

2. WE PAY FOR AUDITS

3. WE DON’T
SAVE ENERGY
*OK, sometimes audits can save energy—but not at the level we want, and evidence
suggests not with the persistence we want.

WAIT!
I’M SUPPOSED TO BE TALKING
ABOUT ENGAGING CONTRACTORS,
RIGHT?

I AM. HERE’S WHAT HAPPENS.
The Market aligns with the incentives.

uraging
The Program gets upset because it’s not
o
seeing the results it wants it’s enc
results
V
e
Just th
The Program cracks down on those unruly
contractors

Contractors get discouraged and quit

( Homes don’t get fixed. )

SO WATCH OUT.
THE “BRIBES” MIGHT WORK.
AND YOU MIGHT NOT GET WHAT
YOU WANT.

ON THE OTHER HAND,
PAY FOR SAVINGS
AND YOU MIGHT GET SAVINGS

KNOW THE BASIC BUSINESS MODELS
MARKETING TECHNIQUES

THE IN-HOME SALES
FINANCIAL METRICS

BIZ PRICING COMPLEXITIES
GOOD BUSINESS PRACTICES

THE GOAL BEING TO ANSWER THE QUESTION:

HOW DOES WHAT YOU’RE PROPOSING
IMPACT THESE ELEMENTS AND THE
BUSINESS?

How our business works
Finance

Vendor

Trade

Home/Client

Contractor

How we’re asked to change
our business

WOW!
THAT’S COMPLICATED!
HOW MUCH DOES IT COST TO PARTICIPATE?

$100,000
A REASONABLE “ALL-IN” COST TO
MOVE INTO HOME PERFORMANCE
Training (all staff) Salaries (during training!)
Certifications? Sweat Equity
Equipment Initial Marketing Campaign
Vehicles Etcetera, Etcetera

$100,000
Can a contractor reasonably hope
to recover even that initial
investment? At what return?
At what risk? y need much r ma
osts! Contracto e!
just start-up c and receivables ag
That $100K is pay ments are slow
more, espec ially if program

WHAT DOES EFFECTIVE
CONTRACTOR MARKETING LOOK
LIKE IN YOUR AREA?

THIS YOU WANT TO KNOW!

WHAT DOES AN EFFECTIVE IN-
HOME, CONSULTATIVE SALES
PROCESS LOOK LIKE?

AND THIS YOU WANT TO KNOW, TOO!

IF YOU’RE GOING TO TALK ABOUT
“REASONABLE PRICING” IT PAYS
TO HAVE A REASONABLE
UNDERSTANDING OF PRICING

A STANDARD MISCONCEPTION

PRICING = MATERIALS + LABOR

A STANDARD MISCONCEPTION

This may be a reasonable starting point.

But there is much more to it!

PLUS
Office/Warehouse Rent Office Phones
Utilities Cell Phones
Building Maintenance & Repairs Office Supplies / Coping / Postage
Vehicle Lease/Payment Accounting Fees
Gas Legal Fees
Auto Insurance Financing and Credit Card Expenses
Front Office / Back Office Salaries Permits
Social Security & Medicare Training
Employee Paid Vacation & Holidays Computers / Software
Retirement Plan Equipment Purchase / Lease / Deprec.
Marketing & Advertising Warranty Reserve
Inventory Tax Bad Debt Expenses
Dues/Subscriptions & More!

AFTER ALL THAT, IF ALL GOES WELL,
AND THE MARKET SUPPORTS IT,
THERE’S A LITTLE BIT LEFT OVER FOR PROFIT

BUT YOU SHOULD BE FOCUSING ON
SAVINGS, NOT PRICING

DID YOU BUY YOUR iPhone TO
LOWER YOUR UTILITY BILLS?

I DIDN’T ASK IF YOU CAN USE IT FOR
THAT.

IS THAT THE PRIMARY REASON YOU
BOUGHT IT, THOUGH?

WHAT IS THE PAYBACK ON A SOFA?
U!
ASKING YO
NO W! I’M
IDON’T K

PEOPLE BUY THINGS FOR MANY
REASONS

NOT JUST ENERGY-EFFICIENCY
OR SIMPLE PAYBACK

“People don’t want heating fuel or
coolant, people want cold beer
and hot showers.”

- Amory Lovins

MARKET AND SELL THE BENEFITS
PEOPLE WANT
Comfort
Rooms that aren’t too hot
Rooms that aren’t too cold
Aesthetics
Healthy Homes
Windows!?
Green Badge of Courage

MARKET AND SELL THE BENEFITS
PEOPLE WANT
Comfort

el lyou
Rooms that aren’t too hot
il l t nt
Rooms that aren’t too cold
w
ey ey wa
Th th
Aesthetics

at
Healthy Homes
wh Windows!?
Green Badge of Courage

“MY PROGRAM CAN’T PAY FOR THOSE
THINGS”

STOP THINKING THAT!

START THINKING THIS:

“PEOPLE CAN BUY WHAT THEY WANT,
AND I’LL INCENTIVIZE THEM BASED ON
THE ENERGY SAVINGS THEY GET.”

IGNORE BEHAVIORAL RESEARCH
AT YOUR OWN RISK

IT’S JUST NOT TRUE THAT:
Providing good information alone will drive
people to action.

The economic argument, even with access to
funding, will lead people to buy efficiency.

THOSE INTERESTING HUMAN ANIMALS
we’re full of biases
Loss often scares us more We’re susceptible to peer
than small gains excite us pressure

The Lake Wobegon We do try to keep up with
syndrome means we all the Joneses
think we’re above average
Apparently we believe in
We’re creatures of habit the miracle cure—we have a
it
ree aud
and tend toward the status “single action bias” V
f
audits, ive me
quo
g
s creenin d steps g
m e why mplicate
So ask s, and co
We get overloaded by
choice
program the willies!

TO FAIL: TO SUCCEED:
Provide good information Add good information to a
and stop longer conversation

Focus on the energy- Use energy/money savings
economic argument as a rationalization

Limit the sale to the Give customers what they
measures YOU want want, and energy-savings.

Insist on a lot of small Make it easy for
steps that provide the homeowners to jump to
chance to off ramp the finish line

“It’s about a score” “It’s about the customer”

MAKING IT EASIER TO DELIVER
WHAT THE CUSTOMER WANTS
MAKES IT EASIER FOR THE
CONTRACTORS TO WANT TO PLAY

SOME PROGRAMS LAST 3 YEARS.
SOME TWO YEARS.
SOME GET FUNDED ANNUALLY. MAYBE.

SOMETIMES, BY THE TIME DETAILS GET
SORTED OUT THE PROGRAM PERIOD IS
WELL UNDER WAY.

SOMETIMES, PROGRAM IMPLEMENTERS
PANIC AFTER THE PROGRAM IS
UNDERWAY, AND START CHANGING THE
RULES DURING THE GAME.

(and sometimes this is because
contractors weren’t engaged early enough
in the design/implementation process)

CONTRACTORS KNOW THIS.
THEY’VE SEEN IT.
THEY’VE SUFFERED THROUGH IT.

AND THEY’RE VERY LEERY ABOUT
MAKING INVESTMENTS IN ETHEREAL
PROGRAMS WITH AN UNCERTAIN FUTURE
V

$100,000? e
Rem ember that on whether th
t that much ?
Want to be y ou’re whole
a nges before
program ch

GOING BACK TO AN EARLIER QUESTION

SO HOW DO WE GET MORE CONTRACTORS
TO SAY: HOME PERFORMANCE MAKES
SENSE FOR OUR BUSINESS

WHEN WE CAN’T GIVE A CONSISTENT ANSWER
ON WHAT HOME PERFORMANCE MEANS?

BEWARE, NOT JUST OF A BRANDING NIGHTMARE

OTHER INCONSISTENT
REQUIREMENTS SCARE
CONTRACTORS

OR HELP THEM FAIL

t
ing tha a bit
em ber, los re than
Aga in, rem ent is mo
estm tractors
00 inv for most con
$100,0 fortable
uncom

WHAT DO I MEAN?

ASK YOURSELF SOME GOOD
DESIGN QUESTIONS

AS WE CROSS TOWN LINES, STATES LINES, AND
UTILTY SERVICE TERRITORIES, DO WE NEED:

DIFFERENT, AND OVERLAPPING,
CERTIFICATIONS THAT ADD COST
TO THE CONTRACTORS?

GOOD CONTRACTORS DON’T MIND CERTIFICATIONS…BUT
MULTIPLE CERTIFICATIONS FOR THE SAME JOB CLASS?


DIFFERENT “SCORES”, SAYING
DIFFERENT THINGS, AND USING
DIFFERENT MODELS TO
GENERATE THE SCORES?

IS IT A SCORE, A LABEL, A RATING, A CERTIFICATE, OR
SOMETHING ELSE?


DIFFERENT MODELING TOOLS,
THAT CAN’T TALK WITH EACH
OTHER, CREATE DIFFERENT
RESULTS, AND DON’T WORK
WITH THE CONTRACTORS’
BUSINESS SYSTEMS?
WOULD A SMART BUSINESS INVEST THE TIME &
MONEY TO TRAIN STAFF IN THESE TOOLS?


DIFFERENT STANDARDS FOR
AUDITS, INSTALLATIONS, QA, SO
WE START FROM SCRATCH EACH
TIME?

OR CAN WE AGREE ON AUDIT STANDARDS, INSTALLATION
STANDARDS, QUALITY ASSURANCE STANDARDS, MODELING
STANDARDS, DATA EXCHANGE STANDARDS?

WHEN PROGRAMS DON’T AGREE ON
“WHAT” OR “HOW” OR “WHO”

IT’S HARD FOR A CONTRACTOR TO STAKE
HIS OR HER LIVELIHOOD ON MISH-MASH
MUSH

SOUL SEARCHING PUBLIC POLICY QUESTION: WHAT IF WE FOCUSED
MORE ON SUCCESS AND LESS ON WHO GETS CREDIT FOR IT?

coŸopŸerŸaŸtion n:
The process of
working together
to the same end

coŸopŸerŸaŸtion n:
The process of
working together
to the same end

AN ONGOING PROCESS.
BRING THE CONTRACTORS IN AT THE BEGINNING.
AND KEEP WORKING WITH THEM.

WAYS OFFER CO-OP MARKETING
COORDINATE MARKETING
TO USE QUALITY AS A PROCESS
CELEBRATE SUCCESS
WORK WEED OUT THE BAD
SOLICIT FEEDBACK
TOGETHER GIVE FEEDBACK

LOOP BACK TO THE BEGINNING—INVOLVE CONTRACTORS
IN SOLVING PROBLEMS AND DESIGNING CHANGES

“Many a good hanging prevents a
bad marriage.”

― William Shakespeare
Twelfth Night: Act 1, Scene 5

IT’S GOOD TO ENFORCE THE RULES.
KICK OUT THE BAD ACTORS.

GOOD CONTRACTORS ACTUALLY WANT
YOU TO SET CLEAR, APPROPRIATE,
CONSISTENT STANDARDS, AND ENFORCE
t”,
THEM FAIRLY. , and “consisten
lear”, “ appropriate” enforce”
The “c rtant as the
“
impo
are just as

COOKING THIS AT HOME
OK, I dragged you in with talk of a RECIPE, but I really only
gave you some ingredients and a few techniques.

When we bake bread, the water/flour ratio varies with
conditions of flour and humidity. And the specific recipe for
you is going to vary depending on the quality of your
ingredients and the local “weather”. That is more than a
15 minute conversation.

Nonetheless having a fundamental understanding of the key
ingredients and how to prepare them positions you to
succeed. This is a prerequisite—you’ve still got to do the
work!

We struggle with the complexities and
avoid the simplicities.
― Norman Vincent Peale

“The problem is not that there are
problems. The problem is expecting
otherwise and thinking that having
problems is a problem.”

FOOD ― Theodore Rubin

FOR “The significant problems we have cannot
be solved at the same level of thinking

THOUGHT with which we created them.”
― Albert Einstein

Thank you for making it this far.
We must make homes more efficient.
Together.
Mike Rogers

CAN I HELP?
WANT TO KNOW MORE?
Michael Rogers, President, OmStout Consulting

Mike Rogers is a nationally recognized expert in home performance contracting.

Previously, he was Senior Vice President at GreenHomes America. a leading home performance
contractor and franchisor. For GreenHomes, Mike led the creation of the systems across all aspects
of the business. He guided the operations at the incubator location in Syracuse, NY, and led the
transition to home performance at franchise locations.

Prior to joining GreenHomes, Mike had an 11-year affiliation with the U.S. EPA as an employee and
twitter consultant, holding various positions. In particular, he was a lead developer and primary supporter of
@EnerGMatters the Home Performance with ENERGY STAR (HPwES) program jointly run by the U.S. EPA and U.S DOE.

Coming from a family contracting background, he has extensive experience to home performance
contracting, from individual homes to the state and federal level. For 15 years he has been a frequent
email presenter at national conferences and meetings in the energy-efficiency, green building, and indoor air
mike.rogers@omstout.com quality industries. Mike has a B.S. in engineering from the University of Illinois and an MBA from the
Kelley School of Business, Indiana University.

When not working on broader energy issues, Mike works on improving the energy efficiency of his
website own home, He likes to kayak, bike in the Champlain Valley and hike in the Northeast, Grand Canyon, or
anywhere else he can.
http://omstout.com

Home Performance Program Design -- Part 1, Engaging Contractors

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