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Home Performance in the Remodeling Industry

April 16, 2006
Home Performance Special Issue 2006
This article originally appeared in the Home Performance Special Issue 2006 issue of Home Energy Magazine.
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                    The value of home remodeling in 2003 was $233 billion— 40% of all residential construction spending and 2% of the U.S. economy. Most homes at some time undergo at least one remodeling project. Over 800,000 room additions alone were completed in the United States in 2003, the majority by remodeling professionals. Clearly, remodelers have the opportunity to transform the existing housing stock by incorporating home performance into their projects.
        My experience in home performance stems from EarthCraft House, a program of Southface Energy Institute and the Greater Atlanta Home Builders Association. EarthCraft House is a program that helps builders to create healthy, energy-efficient, and sustainable homes by incorporating building science principles into their projects. Combining classroom and in-field training, printed guidelines, quantifiable minimum criteria, and third-party performance testing of completed projects, EarthCraft House ensures that every builder and house in the program meets its minimum standards.
        In 2001, several remodelers, including myself, worked with Southface to adapt this new-home program to include renovation projects. During this process, which included the renovation of several pilot projects, the value of incorporating home performance based on building science into home renovation projects became apparent. With the help of Southface, my former company, SawHorse, Incorporated, pretested, evaluated, renovated, and posttested over a dozen EarthCraft homes. These projects ranged from whole-house renovations and significant additions to air sealing, insulation, and HVAC upgrades. Learning how simple changes could dramatically improve the efficiency and air quality in an older home was enlightening, and this enlightenment has led me to focus my energies on home performance and its role in remodeling.
        When homeowners have comfort issues, they usually bring them up with HVAC contractors, who will sell their services to the homeowner, often without considering anything other than the age and condition of the HVAC equipment. But if homeowners bring up the problem with a remodeling contractor, the contractor can show them how including home performance in the renovation project will improve comfort and decrease humidity. For clients who are aware of problems in the house, little convincing is required, and the sales process moves quickly. Once the contractor has demonstrated the deficiencies and has offered solutions, the sale is often a given. However, it takes an in-depth knowledge of home performance— as well as a certain passion for the concepts—to sell these services most effectively.
        Remodeling contractors who focus on home performance are working in many parts of the United States. Through my discussions with them, I have come to the conclusion that they have experienced frustrations and challenges that are similar to what I have. Homeowners are not exactly banging down the doors asking for home performance as part of their remodels. How do you change this situation? In one word, marketing. Marketing to homeowners is essential to create the demand for efficient and healthy homes. In those parts of the country that have a program promoting home performance, piggybacking on a program’s marketing campaigns reduces the effort required by a remodeler to build this demand. For example, in Portland, Oregon, the Neil Kelly Company has partnered with Earth Advantage, a program of the local electric utility, as well as Energy Star. Cooperative marketing, including TV, radio, print, and vehicle identity programs, has proven successful in creating demand for energy efficiency and green remodeling work to this firm. In Atlanta, the EarthCraft House program, although it is focused primarily on new homes, has a strong presence in the local media and strong consumer recognition. SawHorse, through public relations efforts, National Public Radio sponsorships, and print advertising, has developed a close association with EarthCraft House, and continues to reap the benefits through referrals and client inquiries about the program. Clearly, effective marketing campaigns can deliver clients to contractors.However, sitting back and waiting for a program to take shape locally is not a viable business strategy for a remodeling contractor who is interested in moving into home performance. Indeed, I believe that any remodeling contractor who takes a wait-and-see attitude to home performance will be missing out on a significant business opportunity. Consider the lessons learned from an earlier transformation that rocked the remodeling industry.

Retooling an Industry

        The remodeling industry has seen a significant transformation in the past 20 years. What was once almost exclusively a group of small independent companies has changed. While there are still many small organizations, the rise of larger, multidisciplined, full-service remodeling contractors is significant. Over time, these companies have moved from doing construction work almost exclusively to redefining themselves as design/build firms and including architecture, design, engineering, and other services in their mix. Frustrated by the lack of control that they experienced when they worked with independent architects, many remodelers decided to break away from the competitive bidding market and take control of the entire process. Beginning in the late 1980s, SawHorse made a concerted effort to avoid working on projects that were designed by outside architects. Initially the company risked losing some work, but by standing firm and focusing on providing highquality design and construction work, it developed the reputation of being a premier design/build firm. As the more progressive remodeling firms began selling design/build services to their clients, most were met with a resounding “What is design/build?” Since that time, thanks to the concerted efforts of remodeling professionals throughout the country, design/build has changed from an anomaly to the primary delivery model for residential remodeling. More often than not, homeowners now specifically seek out design/build firms for their remodeling projects.This change came about because the industry worked hard to develop and market design/build, so that it became the recognized standard.
        Remodeling firms, along with public agencies and industry publications, now have a similar opportunity to change “What is home performance?” to “I want home performance,” and to make it the next standard in remodeling. It will not necessarily be easy or quick, but the experience of those pioneers who made the effort to legitimize design/build shows that the result is worth the effort. When home performance becomes the standard for remodeling, we will know that we have been successful.
        Including home performance in remodeling fits well into the design/build model, which is an example of what is called consultative selling. Rather than simply taking orders or submitting competitive bids, companies that provide design/build services typically contract with their clients early in the process for the design work, creating a straightforward path through the process all the way to the signing of a construction contract. Home performance fits well with consultative selling, and contractors who work this way should find it easy to add home performance to their process. During the preconstruction phase, inquiries directed to the homeowner about excessive utility bills, respiratory problems, allergies, mold growth, drafts, and inconsistent heating and air conditioning can uncover problems that homeowners usually do not identify on their own. By demonstrating what causes or exacerbates these problems, and how home performance work can solve them, remodelers are in a unique position to gain the confidence of their clients and to sell them valuable services.
        At the end of a successful project, most contractors are gratified by seeing the pleasure their clients get from their newly remodeled home. When home performance is added to the mix,homeowners realize that their health and comfort is significantly improved and their utility bills are lower—further increasing their level of satisfaction. One recent SawHorse client told me that since she moved into her newly remodeled EarthCraft house, her allergies have improved so much that her doctor inquired about the program. Now she says he is planning to tell other patients about it. Not only is this client extremely satisfied with the construction work, but she is healthier and feels better just from living in her renovated home. The good feelings remodelers get from clients like this are very satisfying, and the clients themselves increase business by providing high-quality referrals.

Leaning on the Elders

        Remodelers who want to add home performance to their menu of services must have a strong advocate in the business—someone who will take the initiative to make it happen. Usually this is the business owner, but it could be anyone with the right skill set. Home performance is not for the faint of heart. It involves learning new procedures—how to use the testing equipment, how to evaluate a house, and how to prepare recommendations for improvement. The home performance advocate must be able to balance detailed data with the big picture to determine the best path for each project. This new viewpoint can be a frustrating learning experience for some remodelers. Seasoned professionals are not always the most willing to learn entirely new concepts, some of which may be at odds with their own long-standing practices. Even when there is a willing advocate, every firm should seek outside help should be a part of the process.An enormous amount of information exists about energy efficiency and healthy remodeling. Years of building science research have gone into developing many of the home performance techniques that are available today Take advantage of others’ mistakes and the wisdom that building scientists have gleaned from their research.
        Many local organizations and utilities offer home performance and green building training.Training is also available at various conferences nationwide. Short seminars at trade shows provide a good introduction to the subject. Multiday training sessions provide business owners and their staff with the in-depth introduction needed to incorporate home performance into their organizations. Scheduled training sessions are available, or training can be customized for a specific business. Once trained, the company staff must learn by doing the work on real projects. Locating a mentor to assist in the early stages would benefit anyone planning to implement home performance. Most locally based programs have staff that can act as mentors. When no local programs are available, seek out independent home raters, building science specialists, or other contractors.
        Once home performance is included in a remodeler’s service mix, a well thought-out marketing plan is critical to selling this new service successfully. Any and all standard marketing methods that are successful for a business should be employed. Mailings to past clients describing new services can spark interest and referrals. With energy efficiency so much in the news, developing a relationship with the local media can be very effective. Local publications are always looking for timely subjects for articles. Wellprepared press releases about new services or specific projects will get the attention of editors. Remodelers who offer to write, or to provide information for, articles on energy efficiency and home health get significant exposure from a modest effort. Most markets have radio programs on home improvement.These programs can give significant exposure to a home performance professional who appears on the program as a guest, answering homeowners’ questions. Once remodelers have acquired the skills needed to conduct these new marketing efforts, and they combine these efforts with good old-fashioned selling, they will be able to incorporate home performance into their projects successfully and profitably.
        The time has come for remodeling professionals to become the guardians of the future by making homes better. Reduced energy consumption is good for everyone. Improved health is good for everyone. Simple changes in the way remodeling is performed will significantly improve the efficiency of existing homes and the health of the occupants. Energy costs and supplies are on everyone’s mind and are widely covered in the media, as is air quality. It is likely that we are seeing the beginning of a paradigm shift in how we think about our resources and our health. The professionals who take the lead in home performance now will be the leaders of the industry, and will enjoy continued success and profitability throughout their careers.
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