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What If Your PM Agreement Increased Commercial Buildings’ “Gas Mileage” by 25%?

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A driver sits at a busy street corner looking at two oil change businesses caddy cornered from one another. Feeling pressure from the traffic, she needs to make a quick decision. She’s on her lunch break and needs a quick oil change. One business advertises a 19-task program and the other 17. One is $24.95 the other $29.95. Which one do you think she picked?

Often times this is what your commercial customers are faced with. It is difficult for them to discern the differentiated value of what you are delivering and fall back to price as the ultimate determinant. While you’ve invested in training, trucks, and infrastructure, “One Truck Chuck” doesn’t carry the overhead and can easily undercut your price. Many customers don’t actually dig into what they are getting for that “bargain price.”

What if one of the Oil Change businesses could actually claim to increase your gas mileage by 25%? Might our intrepid consumer have been willing to pay the perceived premium? Probably.

If you sell PM agreements to commercial facilities, you have the potential of delivering that value proposition; maybe not measured in miles per gallon but in KWh and therms translated into dollars on their utility bills. After all, the single largest controllable operating cost in a commercial building is energy (30%) and up to 75% of that energy is used (and wasted) by the HVAC and lighting systems.

So, what will it take to use this type of differentiation instead of price to secure new customers? You need to take a hard look at what you are really delivering to your customers and ensure your sales team can sell it.

Here are some elements to consider in building a comprehensive PM Program. A thorough cleaning and inspection program delivered consistently will:

Protect and extend the life of your equipment. Each year your PM Program prolongs the life of your customers’ equipment, you will deliver financial value

Cut down on repair costs lowering that budget

Reduce tenant/occupant complaints; substantially increasing the likelihood of renewal which has a tremendous impact on the financial bottom line

Reduce the energy bills by helping HVAC equipment to operate more efficiently

Beyond the basic program, consider adding advanced elements that enable you to measurably reduce operating costs.

  1. Use data logging to “shadow” control systems to see what their set point, setback and general scheduling is. This will help to document and illustrate the amount of time systems are running during unoccupied times. Our customers stagger the test every 9 months to ensure they cycle through each season. This is usually delivered as a value added option that the customer pays for.
  2. Add CO2 data loggers to assess how much fresh air is introduced that needs to be reconditioned which can be very costly.
  3. Consider incorporating performance measurement into your program, especially for some of your larger, high value accounts. Many of our clients are now tracking the financial impact of their programs on their customers’ operating budgets. By tracking monthly utility bills, they are able to document energy savings and correlate the timing of investments in retrofits with utility savings. This builds credibility and leads to more project work and renewals.
  4. As you build success in your local market(s), leverage that success and start building case studies. It’s no secret that real estate is local so take advantage of the local references you are creating that will substantiate the core message you want all your prospects to hear, “this program measurably reduced our operating costs.”
  5. Build a “Tenant Complaint Rapid Reaction” plan that incorporates Comfort and IEQ measurement and inspection capability enabling you to quickly isolate valid and invalid issues on behalf of the owner or Property Manager.

If you’re delivering PMs to commercial facilities today, you know how competitive it has become. If you take a step back and evaluate the value you are actually delivering and work with your team to expand your offering, you won’t find yourself in the dilemma the Oil Change industry finds itself. After all, they are unlikely to invent something that increases gas mileage by 25%. On the other hand, you have the advantage of being able to make those claims and substantiating them through measurement.

Jim Crowder

Posted In: ACCA Now, Building Performance

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