A year ago, Peter Michelson, CEO of Renewal Design-Build, in Decatur, Ga., decided to create a separate home performance division called Renewal System Solutions. “We wanted to diversify our offerings, diversify our revenue stream, support larger projects, and build brand awareness,” he says. “It continues the concept of one-stop shopping for homeowners.”
He set up a separate company, he says, not only because it makes it easier to track success, but to also strengthen brand. The home performance division uses the Renewal name with a similar logo. Michelson hired Joe Thomas, who was doing assessments for a local home performance firm, to manage Renewal System Solutions. Thomas spends 80% of his time performing assessments and overseeing improvements and 20% managing the company.
Renewal System Solutions has one other employee, Steve Herzlieb, who was training home performance contractors with Southface, a nonprofit that promotes energy and water efficiency in the Southeast and verifies sustainable building.
If Renewal Design-Build clients choose to do an assessment, Michelson says, Renewal’s home performance division acts as a subcontractor and charges for the audit and manages the work. It does the assessments and the installation. Thomas and Herzlieb are presented as consultants and work to build a level of trust with the clients.
Thomas says that if clients question the fact that one company is handling both aspects of home performance, he explains that the company is audited by Southface, so “a third party [is] verifying all the information we are collecting and the reports we generate.”
AUDITS AND LEADS
Thomas says that home performance is a tough market because homeowners are not familiar with weatherization. The company participates in Home Performance with Energy Star in Atlanta, sponsored by Georgia Power, so it receives leads from the organization’s website.
If a call leads to a request for a performance assessment, Thomas and Herzlieb usually conduct the audit together, which takes four to six hours. The company follows the Home Performance with Energy Star diagnostics protocol. And though the assessment itself is not a great money maker, Thomas says, the cost of the assessment covers their time, and the company’s business model is predicated on selling improvements.
Thomas and Herzlieb review the assessment report with homeowners. “Some prioritize based on their own criteria. Some plan the project by phase,” Thomas says. Homeowners usually choose one or two specific items that address the reason they called Renewal.
He says that the people who are most likely to pay for the assessments are early adopters or those with comfort issues. People who work at home or spend a lot of time at home are more motivated to make improvements. Homeowners sign a retainer agreement and pay a fee that applies toward the cost of the improvements. After the work is complete, the team repeats the appropriate tests.
The post-work diagnostics are required for the Home Performance with Energy Star program and for Georgia Power’s rebate program. Thomas says that the state rebate is an extra bonus because “even the potential for a rebate helps to push [homeowners] toward doing improvements.”
—Nina Patel, senior editor, REMODELING.