Posted by Charley Cormany, EFCA Executive Director
A few rotten apples
The world is full of contractor horror stories. Over the years, contractors have lost customer trust, often for good reason. Simple mistakes like forgetting to re-install a water heater vent after a roof replacement could have drastic consequences if the exhaust fumes, and potentially carbon monoxide, were to re-enter the building.
Unfortunately, this lack of confidence from the public means that gaining a customer’s trust can be a real hurdle even for the best in the business.
But it isn’t just the bad apple contractors who are at fault. The standard bidding process these days seems almost designed to reward shoddy, dishonest work.
With the “triple bid model,” consumers and building owners are encouraged to get at least three bids before they decide on a contractor for their project. This might seem like a good idea–like getting a second opinion from a doctor before having surgery. In reality, it’s contributing to a race to the bottom.
The problem is that not everyone is honest. Some contractors will submit a super low bid to get the job and then use change orders at every opportunity to bump the price, and their profits, back up to where they should have been in the first place.
It’s not a very honest approach and yet it happens all the time. In some cases, like with new school construction and renovations, the client is mandated to choose the lowest bid. Being required to pick the lowest bidder is crazy to me.
So what is a contractor to do? It may seem like simple advice, but I still believe that the best thing contractors can do is focus on quality work, comply with regulations, pull the right permits, and charge what they are worth. Quality contractors who do things right can and should use their reputation as a differentiator in their sales process.
Here are some of the things home performance contractors should keep in mind when thinking about how to improve quality and build trust with customers.
Price and quality
People often get confused by the difference between price and quality. Quality products typically cost more but they are usually worth the extra cost. There are lots of example in other markets where this holds true. Why do people pay more for upscale cars? In today’s automotive market it isn’t features, as even the most basic cars today have a full complement of features. The reason people buy high end cars is their perceived value is more. Hopefully their real value and resale values are more too. When you purchase a higher price product you expect better quality. That’s why you don’t want to hear that we chose your company because you were the lowest cost bidder.
Most of the principles of building science are pretty straightforward and make sense. But in the world of home performance, details matter, perhaps even more than in other trades. True savings are achieved by combining many small interventions to create a greater result. Missing a detail can kill an energy retrofit project, and the test-out numbers will prove it. Forget to seal one duct run and the whole duct system will fail a leakage test. Get sloppy when charging an air conditioning outdoor unit (adding refrigerant) and the overall system performance drops significantly. Simple things like forgetting to configure a thermostat can have significant impacts on the finished product.
We shouldn’t forget the details involved in other parts of the business too. If the sales staff undersells the job by skimping on the labor budget it will be difficult provide a high quality end result.
One of the keys to successful jobs is having “buy-in” from the people actually doing the work. Crews need to be trained and understand the value of what they are doing and why the details matter.
Home performance work is very labor intensive. Most general construction projects are roughly 66 percent labor and 33 percent materials. Home performance projects are often 75 percent labor and 25 percent materials. This means getting the most value from your workers is a lot more important than getting discounts on materials.
It is important for crews to actually see how much difference a specific technique makes. For example, using a blower door during the air sealing process allows the crew to determine what areas to concentrate on when they are air sealing. Should they focus on the drywall seams or the plumbing and electrical penetrations? In time they will learn which is more effective and provide better performance returns for the hours invested. In addition, this information can be shared within your company to improve everybody’s results.
Real time quality controls
So how do you make sure that you and your crew are getting the details right? The simple answer is you need a means to measure your progress as the job proceeds. This measurement can take many forms.
The most expensive is to have a crew lead or supervisor on-site with your crews and subs to insure the desired results are being obtained. As you can imagine, this is not always practical. Do you want to pay a supervisor to watch each of your sub-contractors do their work?
A less expensive but still very effective approach is to use photography to educate crews and improve results. When I was running crews, the crew lead took pictures of the work that they were doing every day. This allowed me to see important project details from multiple jobs without driving to each job site.
Another great quality move was creating incentives for crews with a little friendly inter-office competition. We offered a bonus each week for the crew that installed the tightest (least leaky) duct system. The bonus could be as simple as a six pack of beer or a small cash reward. It was amazing how much better our results got just by adding a little friendly competition to the mix. In addition, the crews that won the competition often came up with new methods that could be shared with others to reduce labor hours across the board.
Commissioning the equipment
Many efficiency projects include equipment that requires configuration. Heating and cooling systems, mechanical ventilation systems, advanced water heaters, and solar systems all have a variety of parameters that need to be configured in order to deliver their rated performance. One of the hardest things to estimate in your bid is the time needed to configure or commission these systems. On a typical residential retrofit, configuration can easily take the better part of a day. If you don’t set the parameters correctly, the results will be less than optimal and in some cases, it might even damage the equipment.
When you schedule jobs, it’s easy to focus on getting your crew on to the next job as soon as possible. Unfortunately, if a job takes longer than expected, the time to configure or commission equipment is the first thing that gets cut out of the equation. To address this challenge, I know of a few companies that have a dedicated technician that configures all of the equipment. This can be a great solution as it allows the rest of the crew to move on to the next job. The problem is that you need to have enough volume and crews to support this type of structure.
The role of verification
Building inspections and incentive program verifications are there to protect the consumer. When you do high quality work, passing inspections is easy.
Inspectors often judge an overall project based on a first impression. If you have lots of loose wires and the installation is messy, they will likely take a closer look at the rest of your project. If your work is neat and tidy, they may just take a quick look and move on.
Building departments are short staffed these days and building inspectors are struggling to keep up with the pace. Quality work is pretty obvious to spot when you know what you are looking for.
The same holds true for the rebate program verification process. Do quality work and promote the fact that you pull permits and regularly pass the required building inspections. It doesn’t sound like much, but you would be surprised how many contractors hold their breath during the inspection process and cringe when their project is selected for verification.
Measured savings promises to improve quality
The home performance industry in California is moving towards measured savings for rebate programs. In many ways this makes perfect sense. Utility rebate programs will pay for actual savings instead of relying on complicated energy modeling software. One of the huge benefits to this type of incentive is that it truly rewards those who do quality work. The proof will be in the actual savings on the utility bills. This is something I am sure most consumers can relate to. Pay for the improvements and see the savings on your bill. It seems pretty basic, but this has not been the case for many programs that have relied on computer models to predict savings. If you needed another reason to focus on quality, this is it.
Quality work speaks for itself
EFCA is a program implementor for the Sacramento Municipal Utility District’s Home Performance Program. Part of our responsibility includes desktop quality assurance and field quality control. This means collectively our staff reviews hundreds of projects over the course of a year. It doesn’t take long to recognize which contractors have solid quality controls in place and which don’t.
Make quality a foundation for your process. Charge for it and explain the steps you take to ensure quality to your new client prospects. Use your quality assurance processes as a differentiator in your sales process. In the end, high-quality projects are the best value for the consumer, even if it costs a little more to get there.
What steps do you take to ensure the quality of your projects?
I have covered some basic ideas here, the primary one is that quality is important and that you should advertise and charge appropriately for providing it as a service.
I would love to hear what steps you take to ensure that your team is providing the quality that you expect. Use the comments section below to send a response. Your insight might help others and the industry as a whole. Don’t be shy, provide your feedback so that others can learn too.
Efficiency First California
Image from iStock