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Building a winning energy services team. A BuildingAdvice Webinar. Who We Are. Zack Buquet, Senior Business Consultant Jim Crowder, CEO & President. Agenda. Why are you here? Why most companies’ Energy Services Plans fail 3 keys to success
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Building a winning energy services team A BuildingAdvice Webinar
Who We Are Zack Buquet, Senior Business Consultant Jim Crowder, CEO & President
Agenda Why are you here? Why most companies’ Energy Services Plans fail 3 keys to success The most important roles your existing staff can fill
Why are you here? • In the 2006-2007 boom time the focus shifted away from a balanced service / new construction approach to chase abundant construction opportunities
Why are you here? • Fast forward to 2010 • New construction volume down 50%
Why are you here? Today, service businesses often find themselves underweighted Service New Construction
Energy Services Go-To-Market Options Energy Savings Performance Contracts Service-Driven Energy Services Business Model vs.
Energy Service Companies (ESCOs) • 75% of total revenue generated by 10 companies • Over 80% of revenue from public projects What Projects Get Done?
Rigorous, • labor-intensive, • engineering-intensive • methods used • Industry trains • itself in methods • needed for complex • projects • Cost of • analysis • is high • Only large, complex projects • can support cost • of process The Methods Drive the Madness Is every energy project a nail?
In the ESCO Model • High risk • Guaranteed, shared savings require intense engineering studies • With finite resources, upfront investment, ESPC’s are limited to larger projects • This does not scale to your portfolio of small-midsized buildings 2011 AirAdvice, Inc.
Yet... Building demographics are heavily weighted to small and medium sized buildings 99% 99% of all buildings are less than 200,000 sq. ft. Source: Commercial Buildings Energy Consumption Survey (CBECS)
Here’s the Problem 2011 AirAdvice, Inc.
Why an Energy Savings Performance Contracting Approach Won’t Work Your Service Base ESPC Targets
Case Study • $400M full-line construction, design/build, and service contractor with multiple branches on the west coast • Energy group with national pressure delivering performance contracting and large energy retrofit projects • Energy group focused on large projects only • Service team had a lack of access to energy services for the majority of their clients 2011 AirAdvice, Inc.
There’s another way • Mechanical service contractor in Northeast • Project sales team offered low-cost energy studies to existing customers • Uncovered project opportunities in almost every case • Sold ~ 50 energy studies ($125k in revenue) • More importantly, $5 million of project quotes generated
The Alternative: Service-Driven Energy Business Model • Uses existing sales and operations staff • Focus on protecting and growing every contract service dollar • Harvest base of service for retrofit project opportunities • Differentiate your service offerings to take share from the competition
Why Most Companies Fail • Do not have a scalable model • Lack of executive leadership commitment • Clearly articulated goals, measurement, accountability • Lack of sales leadership • Training plan across company • Ignore their most important asset, their installed base
3 Keys to Success • Executive Commitment • Sales-Driven Approach • Scalability
Executive Commitment Articulates vision to organization Ensure adherence to strategy Serve as backstop for the mid-level manager Public face with the company’s energy brand Holds teams accountable 2011 AirAdvice, Inc.
A common pitfall that we are trying to avoid 2011 AirAdvice, Inc.
Excitement Level Learning Curve Learning Curve and Excitement Levels of a New Product or Process Level Time Left to its natural flow, the learning curve will normally take longer than the excitement curve - causing your salespeople to become de-motivated to sell before they are able to become successful. There are 2 ways to solve this. 2011 AirAdvice, Inc.
Excitement Level Success Learning Curve • Shorten the Learning Curve Level Time The shorter the learning curve, the faster the salesperson becomes successful - fueling their excitement level and their success. 2011 AirAdvice, Inc.
Success Excitement Level Learning Curve • Provide Supportive Management to Extend “Excitement” Level Sales Management keepssalespeople motivated untilsuccess creates excitement Time With good sales management, salespeople’s motivation can remain high even though they are not yet successful. In time, their excitement level will rise with their success once they are past the learning curve. 2011 AirAdvice, Inc.
3 Keys to Success • Executive Commitment • Sales-Driven Approach • Scalability
Sales-Driven Approach • Sales-driven, not engineering-driven • 80% of the value for 10% of the price • Not a science project
Characteristics of a Sales-Driven Approach • Know your targets: Customers vs. Prospects • Energy-savvy sales team • Technical support resources available to keep the focus on sales • Metrics and incentives to drive the right behaviors
Service Department New Customers Existing Customer Base Outbound Ignored Opportunity Inbound Repairs New PM Agreements Retrofit Projects
Service Department New Customers Existing Customer Base Ignored Opportunity Outbound Outbound Repairs New PM Agreements Retrofit Projects
Case Study • $25M contractor in Midwest • Adopted BuildingAdvice to gain access to energy offering • Initiated proactive, outbound sales campaign to existing base • Energy assessments generated $2.5M in project quotes in 6 months 2011 AirAdvice, Inc.
Characteristics of a Sales-Driven Approach Know your targets: Customers vs. Prospects Energy-savvy sales team Technical support resources available to keep the focus on sales Metrics and incentives to drive the right behaviors
Map your team to your needs Identify personnel gaps, if any Recruit to fill Train and reinforce Building an energy-savvy team 2011 AirAdvice, Inc.
Identifying the Best Candidates from Your Existing Staff 2011 AirAdvice, Inc.
Develop a “Hunter” mentality 2011 AirAdvice, Inc.
Case Study • $150M full-line construction, design/build, and service contractor with branches across the Pacific Northwest • Energy group in place delivering performance contracting and large energy retrofit projects • Energy group focused on large projects only • Service team had a lack of access to energy services for most of their clients • Implementing BuildingAdvice program in service group resulted in 50 new maintenance agreements, sold at higher prices and higher margins 2011 AirAdvice, Inc.
Contractor Example Candidate A Candidate B • Top project sales person • 30 years in industry • Knows technical details of every system • Knows everybody in town • People call him when they need projects quoted • New to industry • Previously sold software systems to IT departments • PM sales plan must be met • Needs an edge to be successful
Energy-Savvy Sales Reps No change in basic sales approach Positioning changes slightly Identifies customers’ financial pain Makes energy relevant to that pain Uses energy to differentiate their offering 2011 AirAdvice, Inc.
Characteristics of a Sales-Driven Approach • Know your targets: Customers vs. Prospects • Energy-savvy sales team • Technical support resources available to keep the focus on sales • Metrics and incentives to drive the right behaviors
Best Practices – Team Structure People that make it work • Executive sponsor • Sales leader • Energy-savvy sales reps • Technical resource 2011 AirAdvice, Inc.
As Program Grows… • Phase 1 • Access to technical resource Phase 2 • Dedicated technical resource
Technical Resource • Don’t have to run out and hire someone • Needs to be able to: • Understand HVAC systems • Identify potential retrofit projects • Learn software to generate benchmark, assessment, and audit reports • Possible candidates: • Project sales rep • Project manager • Controls specialist • Doesn’t need engineering degree 2011 AirAdvice, Inc.
Case Study • $15M mechanical contractor in the Midwest • Dedicated technical resource to support sales team with BuildingAdvice program • Salespeople close energy service sales, transitions operations function to technical resource • Join forces to present findings • On track to close $4M in energy service and retrofit sales in 1 year 2011 AirAdvice, Inc.
Characteristics of a Sales-Driven Approach • Know your targets: Customers vs. Prospects • Energy-savvy sales team • Technical support resources available to keep the focus on sales • Metrics and incentives to drive the right behaviors
Best Practices – Metrics and Incentives • Define metrics that predict future sales to ensure the right activities • # of Calls per week • # of Energy Benchmarks • Define incentives that reinforce the NEW behaviors we want • “Do this or you’re fired!” • Objectives Bonus • Commissions 2011 AirAdvice, Inc.
3 Keys to Success • Executive Commitment • Sales-Driven Approach • Scalability
What Do We Mean By Scalability? • Well-defined processes and automation will drive • Establishing a foundation for expansion • Leveraging high-value personnel • Across expanding geographic footprint • Ensuring salespeople can be added efficiently • > $/employee • > Margin % • Better customer experience • Productivity • Efficiency • Consistency Automation of procedures drives scale & consistency
Key Takeaways • Integrating Energy Services into a planned maintenance program requires a different approach • Senior management plays a vital role in driving the transition • Roles must be clearly articulated and metrics defined to measure success • Establish a plan to attack your customer base • Develop a technical support resource plan • Ensure your plan scales as you add salespeople, geography, and customers
Resources • White paper – The Science of Salesperson Selection • Links to Sales Candidate Survey Tools • White paper – 3 Keys to a Profitable Energy Services Business 2011 AirAdvice, Inc.