Contractors Can Gain More Profit Through Energy Efficient Remodeling

Posted on January 19th, 2011 by
   

What you can’t see, in fact, can hurt you, especially as it relates to home construction.

According to the government census, there are nearly 110 million occupied homes in the United States. Leading building material manufacturers state that up to 70 percent of these homes are not insulated to current energy code requirements, making them less energy efficient than a new home. However, making matters worse, most new homes being built today are constructed in accordance only to the lowest possible legal energy efficiency standards. While it may be legal, it does not address one of the biggest complaints of homeowners…comfort. More than half of these U.S. homeowners report at least some dissatisfaction with their home’s comfort level.*

Making a home more energy efficient not only makes it more comfortable to live in, it also enables homeowners to lower the cost of maintaining their home year-round and for years to come. In fact, 73 percent of homeowners say they are willing to pay more for an energy-efficient home.** And with the government’s energy tax credits, homeowners can save even more money when executing energy efficient projects for their home.

So, how do professional contractors turn that into sales? By becoming an energy efficiency expert, and highlighting it on each of their remodeling projects. When contractors provide a more holistic service offering (versus just a low price), they have the opportunity to add energy efficiency to their customers’ remodeling projects and enhanced profit to their business.

Of the 25 million homeowners involved in remodeling projects***, many could include energy efficiency enhancements if homeowners were just made aware of their options. This profit enhancing opportunity for the contractor is often lost because many contractors focus on reducing project costs, rationalizing that they must compete with other contractors that typically lead with price.  Homeowners have high expectations, stating that they want their contractor to be more of a consultant and provide deep expertise to their home’s project. These homeowners are more willing to pay additional dollars for the services and product attributes (including energy efficiency) that these contractor’s enhanced solutions usually provide. Contractors who make energy efficiency a priority and utilize this expertise to differentiate themselves from price-centric contractors can secure more jobs and more profit per job.

For example, roofing contractors head to the attic to check out the backside of the roof deck before they quote the job. While in the attic, they could check the attic insulation level and provide a quote to add attic insulation to optimize the home’s energy efficiency. Most big box retailers make this service easy… as they have a rental program where professionals (and DIYers) can rent a blowing machine along with the blowing wool insulation.

This same approach could be used for windows and HVAC contractors, as their homeowner sales pitch focuses squarely on enhancing energy efficiency of the home. Adding a tag-on insulation project or air sealing solution would help optimize the energy efficiency of the whole house. Attic or crawlspace retrofit insulation applications, along with air sealing are the easiest and usually most cost efficient ways to add on sales to a home retrofit/remodeling project.

So what about other remodeling projects? Kitchen or bath remodels usually focus on beautifying with cabinets, countertops or flooring, but they don’t have to stop there. When opening the drywall, caulk and seal the cavity (to reduce air infiltration) and then re-insulate with the highest R-value available. New, more energy efficient windows or doors add to the look of the room and can make it more comfortable by reducing drafts and adding thermal performance. When re-siding a home, adding new windows to key sides of the home, a new layer of foam board insulation over the existing exterior, and caulking around all openings can make a huge difference to the energy efficiency, comfort and performance of the home.

Focusing on energy efficiency makes everyone a winner. For homeowners, they get a lower cost to maintain their home, added comfort, and research shows that a more energy efficient home can enhance in its resale value. For the contractor, leading with energy efficiency expertise can differentiate them from other contractors, help them close more projects, and ultimately enhance their profits. Oh yeah, and the planet saves more natural resources.

* Decision Analysts (What Your Customers Want By Garry Upton)

**Ecohome, June 2008

*** NARI

Written by Bill Rossiter, Interrupt Marketing

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