Increasing Profitability Through Energy Services A Comprehensive Program

Increasing Profitability Through Energy Services Module Description Date 1 An Overview of Energy Services May 6 2 The First Step: Energy Benchmarking May 27 3 Introduction to Energy Audits June 8 4 Energy Audits and Retrocommissioning June 24 5 Closing the Service & Retrofit Sale July 15 6 Monitoring and Verification of Energy July 29 7 Marketing Energy Efficiency August 12 8 LEED® Credits from Energy Efficiency August 19 © 2009 Air. Advice, Inc.

Module 5: Closing the Service and Retrofit Sale © 2009 Air. Advice, Inc.

Field level-set § Are you feeling pressure to cut or cancel some agreements? § Are you seeing new competitors? § Are retrofit payback periods compressing? § Owners more skeptical than ever? “I never used to have to sell” © 2009 Air. Advice, Inc.

I’m way under quota Panic Just landed a big one! Euphoria “A salesman’s motivation is determined by where he/she is on the panic-euphoria continuum. ” - Harry Archung, EMCOR Mesa Energy Services © 2009 Air. Advice, Inc.

Do you understand what your customer is going through? § § § Vacancy rates approaching 20% nationally Commercial refinancing: $800 B in 2 years Tremendous pressure to cut costs FMs and PMs feeling the heat Canceling and cutting PMAs © 2009 Air. Advice, Inc.

Where do they turn? § BOMA: BEEP Program - 30 low cost ways to

What Is BOMA “telling” them? Top 5 HVAC low cost items: 1. Adjust temperature control & schedule 2. Adjust ventilation 3. Reduce after hours usage of HVAC & lighting 4. Optimize start-up time and equipment sequencing 5. Adjust dampers © 2009 Air. Advice, Inc.

To close, you need to understand… - Who decision maker really is - What is their pain? - What are you really selling? A differentiated service (or) A commodity How you can change the buyer’s motivation and decision criteria © 2009 Air. Advice, Inc.

OK, there is plenty of pain…got a cure? They need help addressing their pain

The doctor is in…. Reduce energy costs through your PMA’s © 2009 Air. Advice,

Using Energy Service Agreements to renew & close service and retrofit business © 2009

Set the bar higher for your competition Modifying PMA scope to ESA scope WILL

Why do people buy PMAs? § Habit? § They know they should? § Kind of like auto maintenance, every 3 -5 k miles What if you were told that oil change could increase your gas mileage by 10 -20%? © 2009 Air. Advice, Inc.

PMAs - How do you differentiate today? § § Better trained techs? Reputation? Tools?

What’s an Energy Services Agreement (ESA)? It includes all the stuff you do today, plus… § It provides an Energy Star rating for the building § It establishes an Energy Usage Index for the building § It identifies controls issues § It identifies low cost ways to improve performance It addresses the decision maker’s pain! © 2009 Air. Advice, Inc.

ESA Scopes of Work (Examples) Silver Program –Current PMA program –Energy Star Benchmark Gold Program – Utility bill analysis – Outdoor temperature – T, RH, CO 2, Lighting measurement – Utility bill reduction report – Executive summary – Seasonal © 2009 Air. Advice, Inc.

New service offering matrix Standard Silver Gold Basic Mechanical Service Energy Benchmarking Energy Diagnostics & Consulting Startup time & Sequencing Recommendations Un/Occupied Schedule Audit Temp & Ventilation Controls Assessment Energy Assessment (Semiannual) Energy Benchmarking (annual) PM checks (Spring & Fall) Coil cleaning (Annual) Guaranteed service response time -2 hrs (within 50 miles) -4 hrs elsewhere 10% labor discount © 2009 Air. Advice, Inc.

Real-world sales scenario § § Prospect in Denver looking for PMA Owner occupied Dealing

Building Profile § § § § Operated 80 hours/week 97, 992 square feet Heating System: Electric Resistance Domestic Hot Water: Gas Economizer: Yes Cooling System: DX / Packaged Unit Utility Bills: $175 k electric, $3. 7 k gas © 2009 Air. Advice, Inc.

The service provider’s strategy Change buying criteria Offered Benchmark at no charge Used to educate FM on offering Gained better understanding of the bldg and pain points § Competitors went “business as usual” § § Bought the Gold Package © 2009 Air. Advice, Inc.

First Gold Report § Benchmark results § Sensors § Low cost/no cost list ©

Time-based Sensor Data Temperature Lighting Carbon dioxide © 2009 Air. Advice, Inc.

Energy conservation measures identified § § § Temperature control Temperature schedule Ventilation control Lighting schedule HVAC controls Lighting control strategy Provided clues regarding VFD replacement © 2009 Air. Advice, Inc.

Gold Report outcomes § Built credibility by identifying real savings § Identified retrofit opportunities resulting in: § Small labor and equipment opportunities § Potential larger opportunities § Service provider used report to get to owner Drove the need for an audit to get to ROI © 2009 Air. Advice, Inc.

Audit Report results § Simple payback § Cost of doing nothing--Larry © 2009 Air.

Tools § § Data loggers Report generator Outdoor weather data feed Energy Star™ ©

Pricing strategies are a function of § Strategy: § Cost recovery vs profit center § Retrofit lead generation § § Nature of additional work uncovered Targets: Customers up for renewal vs prospects Marginal cost analysis First to market © 2009 Air. Advice, Inc.

Why Energy Services? § § § It’s in the middle of your fairway Small modification to current PMA model You already have priced-in a truck roll Change the buying criteria Renew and get new service agreements Justify retrofits Differentiate © 2009 Air. Advice, Inc.

Next webinar: Module Description Date 1 An Overview of Energy Services May 6 2 The First Step: Energy Benchmarking May 27 3 Introduction to Energy Audits June 8 4 Energy Audits and Retrocommissioning June 24 5 Closing the Service & Retrofit Sale July 15 6 Monitoring and Verification of Energy July 29 7 Marketing Energy Efficiency August 12 8 LEED® Credits from Energy Efficiency August 19 © 2009 Air. Advice, Inc.

Next steps, additional resources Visit airadvice. com/lp/msca_webinar for downloads: – Scope of Work samples

Next steps, additional resources Look for email in 1 day with link to webinar site: § § § Recorded version of this webinar Info and articles for download Register for upcoming sessions © 2009 Air. Advice, Inc.

Next steps, additional resources Want help incorporating energy into your service agreements? Call us or send us a service agreement. § Call Meagan Crowder at mcrowder@airadvice. com or call 303 -954 -8613 © 2009 Air. Advice, Inc.