COLLECTIVELY MARKETING RENEWABLE ENERGY OPTIONS

In Business, November-December, 2004, Vol. 26, No. 6, p. 12

Even with rising utility and fuel costs over the last decade, people are just as concerned about comfort in their homes as they are about saving money or reducing oil imports.

David Biddle

In Business, November-December, 2004, Vol. 26, No. 6, p. 12
WITH well over 125 years of collective experience between them, six Philadelphia-area men are pooling their resources and know-how to form a new home energy service company called Comfort One Associates. Their broad range of skills and talents allow them to provide everything from residential solar electric installation services to insulation, house doctoring, window tinting, power washing, chimney work, wood stoves, instantaneous hot water units, and solar heating applications.
Look in your phone book. It's practically impossible to find trustworthy companies with such a broad range of services. And yet, as utility and heating costs continue to rise, and oil prices hover near $50 a barrel, every household in America is beginning to reevaluate how they use all forms of energy.
Comfort One is not a start-up business, though. The company has been selling and installing equipment such as fire places, wood stoves, patio furniture, outdoor barbecues and awning systems for a number of years. Don Hull, a Comfort One project manager - working with the new owner, Chuck McBority - saw a need to expand operations due to his concern about increasing energy costs in the region. Instead of adding on new services and new equipment, though, Hull wanted to tap into experts he knew were already working in the areas he'd targeted. His idea was to form the Comfort One Associates Green Team, establishing a cooperative approach to selling equipment and services for all the members of the team.
The six principals involved, along with company owner McBority, understand renewable energy and conservation issues because they've lived them all their professional lives. Each individual in the group actually operates his own highly specialized business. Hull handles wood stoves, chimneys, home heating upgrades, and geothermal systems; Jürgen Balitzky, owner of Energy Alternatives, does solar heating applications; Hap Haven of SunHaven Solar provides expertise in home energy audits and solar electric options; Tom Reilly, T&R Insulation, does the insulation work; Bob Swartley of Tint-pro handles window tinting; and Paul Jones does power washing.
In a meeting with four of the key representatives in the group (Haven, Balitzky, Hull and Reilly), we talked about their collective marketing strategy and Comfort One's integrated approach to energy services. “This is all about pooling our resources,” said Haven, “It lets each of us market ourselves with more confidence.” Hull added that they're each “able to give people information that shows [they're] part of an elite energy team.”
In a nutshell, Comfort One allows the principals to refer customers to each other. When Haven is called in to provide a photovoltaic solar electric evaluation and he sees a need for insulation, he recommends T&R Insulation. When someone asks him about wood stoves or whether they should be thinking about a new boiler, he recommends Don Hull. “You want to work with quality people on a job,” says Reilly of T&R Insulation.
But collective marketing isn't just about adding integrated services; it's about combined resources. Hull and Balitzky point out that they are doing joint advertising, linking mailing lists, developing a turnkey service brochure, committing to team demonstrations and tours, and participating in trade shows as a group. They also plan to use the Comfort One store to give potential customers an opportunity for what Balitzky termed “kicking the tires.”

SATURDAY MORNING BEER MONEY
In “built” industries of all kinds, credibility and word of mouth is the key to success. Working together and knowing they can trust each other's abilities is important. “If you're going to do the work and bring in outside contractors,” notes Reilly, “you want to make sure they're like-minded and quality-oriented.” Any referrals that pan out result in a modest referral fee. “What you don't want [on a project],” continues Balitzky, “are guys who are looking for a little bit of Saturday morning beer money.”
All four men have horror stories to tell about jobs they're called in to evaluate or fix: Solar systems that don't work; Expensive, costly boilers sized three times too big; attics filled with excess insulation but no attention to other sources of heat loss. They noted that there is a real problem for homeowners and contractors alike: finding quality, knowledgeable people in an industry that more or less went into dormancy 20 years ago.

THE OLD ENERGY STORE
In the late 1970s and early 1980s throughout many parts of the United States and Canada, it was not uncommon to find local “energy stores” that catered to homeowners seeking to increase energy conservation and decrease their dependence on centralized nonrenewable energy systems. It was also not uncommon to be able to find listings in the Yellow Pages for a number of solar companies, woodstove installers, insulation contractors, house doctors, and other home energy specialists. Local bookstores sold dozens of titles with names like the Solar Energy Book, The Homeowner's Guide to Energy Conservation, and How to Live on Less.
By 1985, this seemingly magical phenomenon had all but disappeared in much of the country. Oil prices had dropped, the world economy began to move, and utility companies took over much of what would be called “demand side planning.” By the turn of the century, although green architecture and environmental issues had become the New Wave of this phenomenon, it was just very difficult to find experts on home energy issues. Many professionals had moved into other fields such as recycling, contracting, carpentry, education, and nonprofit advocacy.

SERVICES WHEN YOU NEED THEM
Comfort One's principals somehow maintained their connections to renewable energy and conservation throughout this lull, and are now able to provide an enormous array of technology options to customers. Not only do they understand how to install, maintain, and troubleshoot state-of-the-art equipment, but they are each familiar with certification requirements, funding and investment mechanisms, and zoning and licensing issues that many less qualified contractors may not be aware of. Pooling their knowledge base gives them a major leg up over their competition. “We're in the process of building a new, albeit simple, approach to marketing energy efficiency,” points out Hull. 'We're still learning what each other knows.” As if to prove this, Balitzky and Haven launched into an extensive discussion and debate on the history of solar tax credits and funding rebates, talking about certification requirements and inspection procedures for solar electricity. When the discussion turned to running electricity meters backwards, Haven calmly stated that the new digital meters only run forwards. This is something no one in the room was aware of.

WHAT'S AN ENERGY AUDIT?
Inevitably, the group has an uphill battle educating customers. Each of them is often called in on projects because of their specific services, but they often see the need to suggest to customers that they first have an energy audit performed to make sure that improvements are properly prioritized. Haven, builder of one of the nation's first “Energy Houses,” a 1980s' Philadelphia demonstration project, is the energy auditor in the group. Audits range in price from $300 to $600 depending upon the size of the property. Reilly said that he is often mystified when he suggests hiring Haven because few of his customers have ever heard of energy audits. “I don't want to just go blow a bunch of insulation in someone's attic when they need something completely different,” Reilly noted. “Anyone can take money from people. I want my customers to do the right thing from the beginning.”
Hull and Balitzky agreed about people's lack of understanding of the importance of an audit. There's a lot of detective work and detail that goes into understanding home energy efficiency. Systems are interdependent, and changing one thing can alter energy flows dramatically.
Depending upon the situation, Haven listed three types of audit. One is the simple walk-through evaluation of a home: looking at heating systems, appliances, the building's “skin” (walls, windows, doors, roof, etc.). The second is a more advanced form of analysis called house doctoring in which infrared scanners, high-pressure fans, and other measurement techniques are used to get an exact fix on serious forms of heat loss. The third type of analysis is the most formal, involving utility bill analysis, engineering heat loss calculations, and statistical evaluation of energy use and heating and cooling requirements for a given year. “Back in the good old days, we were all taught this detailed, engineering way of doing things,” notes Haven. “I know some people who still do this, but I've never had to.”

COMFORT VS. SAVINGS
The impetus for energy efficiency in homes used to be primarily about saving money. “We went through a long period there where people were following the dollar,” pointed out Balitzky. Now, however, over the last decade, even with rising utility and fuel costs, people are often just as concerned about comfort in their homes as they are saving money.
When asked which issue was more prominent, Reilly said he thought it was a 50:50 split. Haven and Balitzky felt that things were tilting back towards the money side of the equation, but indicated that a lot of the applications people want still have fairly long paybacks without the help of grant packages. Hull split the difference between the two issues by stating, “Our objective is to help reduce the cost of being comfortable.”

ZERO ENERGY
The success or failure of Comfort One's collective marketing and referral system will be driven in part by the high cost of conventional energy systems. But it will also be driven by the broader perception that homeowners around the country seem to be embracing: energy is not just related to one's bank account and comfort. There are immense social costs associated with it - whether you're talking about drilling for oil in the Alaskan Wilderness, seeking to influence Middle Eastern politics, or purchasing electricity from utilities that run nuclear power plants.
The value of supporting each other with referrals and cooperative marketing tools may well lie in the constant need to educate and inform potential customers and homeowners. “We need to be moving people towards zero energy,” Balitzky said. “I don't really mean that they stop using energy. I mean that they have the opportunity to reduce their demand for conventional power as much as possible, and that they are then able to create enough for themselves so that they can be independent from utilities and oil companies.”
All four men smiled at that prospect. The mission isn't complete, but after more than 125 years of combined hard work, maybe the end is in sight.

David Biddle lives and writes in Philadelphia. He is a contributing editor to In Business magazine and serves as part-time executive director of the Greater Philadelphia Commercial Recycling Council. His email address is: david.biddle2@verizon.net. For more information visit www.comfort1.com; or www.sunhavensolar.com.

Copyright 2007, The JG Press, Inc.