Don’t Do Audits – Yet
I recently had a conversation with a company that is starting to understand the struggle in selling efficiency projects.
At Noesis, we work with those selling energy efficiency, helping them to increase their proposal win rate. I had the pleasure of speaking with the CEO of a midsize firm, who is not only pitching these projects, but who also understands there is something â€śwrongâ€ť with the way these projects are being sold. Based on his experience, he has seen the audit bog down the sales process by draining resources, lengthening the sales process and generating a huge cost of sale. He also realized that the audit process was slowing down his ability to win more projects.
He stated that the time it takes to complete an audit was a variable he could not change. But his thought process for winning more business was to increase the number of audits performed; he was looking for a way to do audits, faster.
I challenged his thinking; doing audits faster was not the solution but doing the right audits with the right clients was the solution. I challenged that his cost of sale to win a project was also a large problem. I ran some â€śback of the envelopeâ€ť math for him and the outcome was many thousands of dollars. Typically he is closing about 1 in 10 of the audits they conduct. So if each audit costs $5,000, his cost of sale was $50,000 to win a project.
By no means do I believe that audits can be eliminated or can be low touch or no touch. Audits have to be done. However, the timing of an audit within the sales process is a variable that can be changed.
We agreed that doing the â€śrightâ€ť audits would reduce his cost of sale, lower his expenses and greatly increase his win rate. If he could conduct 10 audits for firms that he already had buy-in from, his win rate would jump from 1 in 10 to 2 in 10 or perhaps even 3 in 10.
So with the same amount of audit effort he could raise his win rate as much as 300%.
He also agreed that engaging the CFO early on in the process and getting, as we say in sales, fast NO’s would allow him to accomplish conducting the â€śrightâ€ť audits.
So, when is the right time to do an audit? Don’t even think about it until your customer/prospect has acknowledged that they are:
1. interested in finding out if there is a savings project in their building, and
2. they understand that financing is an option to help them avoid out of pocket costs for a project.
This approach, although newer in the energy efficiency space, has been done in almost every industry for years. If you want to have a pool put in, paint your house, get your grass cut or even plan a trip, there are low touch models to accomplish this. As a buyer I can get an idea of what something will cost me and the impacts it will have on me or my business and as a seller I can quickly identify who I should be targeting.
I see a great deal of opportunity to make those selling energy efficiency more productive without changing or replacing what they are great at.
Jason Putnam is the VP of Sales & Business Development at Noesis Energy, a financial services firm for energy efficiency projects.
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