In this episode, we discuss how you can use services to increase your total sales and reduce pipeline dips during off-season months.
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Phil Zito 0:00
This is the smart buildings Academy podcast with Phil Zito episode 313. So Hey folks, Phil Zito here and welcome to episode 313 of the smart buildings Academy podcast. In today's episode, we are going to be continuing our trend of looking at selling Bill building automation systems. So we are going to be talking about how to sell more services to avoid pipeline depths. So this is something that everyone should be considering. But folks tend to struggle with doing. So if you've been in sales for any amount of time, you're probably familiar with the spring and fall slumps that tend to occur depending on what region of the world you live in. Some folks see it at different times. But there is a noticeable slump in when your sales they kind of hit a peak during the construction seasons. And during the kind of transitory months when people are realizing oh crap, my chiller doesn't work anymore, oh, my boiler doesn't work anymore, and they need to upgrade their controls. But in between those time periods, there may be some pipeline depths. And my hope is that by the end of this episode, you'll have some concrete strategies that you can take with you to sell services to kind of lift those low lying areas of your pipeline. That way, you have more of a predictable pipeline, the business can make better decisions, and you as a salesperson are going to be stressing less. Alright, so first, let's talk about what services are. So services can be both physical services as well as technical services. So when I say Technical Services, I'm speaking more towards things like applications, monitoring, etc. Whereas physical services are going to be things like actually physically doing maintenance physically being on site and assisting in the maintenance of a building physically augmenting staff. I like to primarily focus on the more technology centric services first, because I feel like they do have a place, especially if you have a good installed base. These are not a heavy lift, in my opinion, were as doing physical services are more of a reactionary response to a lot of things. And even in the plan service agreement realm. Physical services can be something that, in my opinion, are much more difficult to sell. Alright, so let's look at a couple services right off the bat, the one I am particularly interested in and drawn to continuously is retro commissioning. Now, there's a ton of ways you can do retro commissioning. And I find the biggest challenge for a lot of service or construction salespeople, when they're looking at bringing a retro commissioning service to a customer's where to start. Like if I told you to go sell retro commissioning, would you know how to price it? And would you have the confidence that your operations team could execute it? If the answer to both of those is no, then I'm going to challenge you. Because if I go here, and I type in retro commissioning, and I do file type PDF. In the Google search, I'm going to get so many retro commissioning plans and guides and you know, there's I think it's Steve Walton or whoever was the Walton heir who basically created Walmart, I can't remember off the top my head, but he was quoted steal what works well, while I'm not advocating outright theft, I am advocating that there is so much out there, especially in the.gov space, which means it's open domain that you you're more than welcome to use in most cases. And why not take all of that that's out there and apply it. Like if I go here and I look at this Lawrence Berkeley Labs, who's by the way, one of our customers for training, and I look at a practical guide for commissioning existing buildings and I click on that PDF. It is going to tell me step by step what to do to retro commission building. Now once I have that information at my fingertips whenever it decides to load in here, my internet's been a little walkie today, but once I have that Open. I'll go through it. But suffice to say, having read through it before, it's going to talk about what is retro commissioning? How do you establish business value? How do you align retro commissioning? With customer business goals and intents and initiatives, these should all be terms that if you've been listening to the past couple episodes are fairly familiar to you, you know, I've been hammering pretty heavily, things like understanding your customers, understanding their strategic initiatives selling to executives, etc. So if we understand that information, then what we're able to do with that information is we are then able to go and basically follow these checklists, and be able to deliver a retro commissioning service. Now the nice thing, the reason I focus pretty heavily on Retro commissioning, is that it's usually incentivized by the local utilities. So, for example, on my screen right now, what I'm looking at is something from MRN, Illinois, and they're talking about how they can go and get potential utility rebates and incentives for performing a retro commissioning. In this case, they call it retro commissioning light. And they actually give you like a step by step checklist an application. So oftentimes, that for the salesperson, all you're really doing is assisting the customer in completing a retro commissioning application that their utility provides. And once they complete this, then you submit it, and it essentially becomes free money at that point of which you can use to fund energy conservation measures. So this is a service that, you know, if you've got a slump in sales, or maybe you've got a little bit of time, and don't lie to me, I know everyone has some time. So if you have a little bit of time, you can strategically go to your customers, and you can assist your key customers in filling out these applications. And then by filling out these applications, you are then going to be able to go and get money that then can be used for sales, and can be used to purchase products and services. Things like energy conservation measures, things like retro commissioning services, things like modifications to optimize H fac, lighting, Bas, etc. And this is money and projects that prior to this conversation were not funded, right, people were not looking to do these projects, you're creating net new work. And that's something I want you to think about when we're selling services, is we are selling net new work to our customer base. So rather than being dependent on capital plans, or operational budgets, we want to sell net new work. Now, that is retro commissioning. And if you all are interested, we can definitely dive deeper into that in a future episode, we can do an entire episode on Retro commissioning, just let us know. Now another service that you can sell. That was all over HR. So one of the guys on our sales team went to HR last week. And he was telling me, like, Analytics was the buzzword. And it's funny to me, because Analytics has been the buzzword since I mean, almost as long as I've been in the industry. And you know, I used to actually work as a project development engineer attempting to sell analytics to customers. So I've seen it go good, I've seen it go bad. And I've seen kind of in between. But properly executed analytics are another service that you can sell. And I feel like we're in a prime time to sell it due to the labor shortage and talent shortage in our industry. So it's no mystery that our industry is starting is continuing to lose talent. And as that talent leaves the industry. As we lose more and more folks, we have to replace that talent. And what is one way we can augment that talent in the meantime, is we can use things like analytics to identify issues and to prioritize issues. So that way these issues can be addressed in a more efficient way. So rather than having that senior person who could look at the building automation system, and could kind of tell Yeah, that looks a little wonky that set points a little higher than normal. And something we need to go check out the analytics can create a historical snapshot. So how I tend to sell this service to executives into D level, you know, directors of facilities etc. is I would tend to look at the person and this works really well if they recently lost a more senior person So okay, what was that person salary maybe like 80 to 120? Somewhere in that range. Okay, so what was that person producing as a result of that salary? Usually it's like two to 3x, right? So that person was saving you two to 3x, through their ability to manage and monitor the system. So that gives us a range of which we can spend a portion of that on analytics. So if we can spend, sorry, my nose is running, I'm getting over a cold.
Phil Zito 10:33
If we can spend a portion of that on the analytic solution, then what we're going to be able to do is we're going to be able to say, okay, this person could identify x, we can identify x, and we can do it for a portion of that. And then you can either take that operational cost as profit, or you can invest it into other employees who can then go and execute, as oftentimes, the execution is not as difficult as the discovery. So that's how I tend to position analytic services. Now, it's no mystery that analytics have a high front end cost. That's why I try to go and piggyback analytic solutions with new construction projects. So where's the retro commissioning, and the utility funding and incentive programs that we discussed earlier in the episode, whereas those contend to do well and really should be targeted at buildings that are five plus years old. Even older, the better because you're going to see better savings, thus, you're going to see better incentive payouts. That being said, as we look at analytics, those tend to do best with buildings that are actually newer. So in an ideal world, you would sit down with your operations team, your sales management would sit down with your operations team, you would say yes, we are going to try to sell XYZ services, maybe remote monitoring, maybe it's Analytics, which we'll get to remote monitoring in just a second.
Phil Zito 12:02
And based on what we are going to sell as a service, we need to do XYZ in our project. So if we're going to sell analytics, that we need a naming schema, we need to make sure we have proper trending, we need to make sure we have proper data capacity, data throughput from our systems. And that all needs to be identified. And that needs to be put into a document up front. So basically, what you would do is your operations team would create a document that would be okay, this is our naming standard. This is our data schema. This is our throughput requirements. These are trending requirements. And these are going to deep be deployed on each project. And if you're doing owner direct work, that's even better, because you can sell like a silver gold platinum level. And you can say, okay, Silver's just our basic controls install. You know, gold is our controls, install with training and associated stuff. And then platinum is our controls install, but we're also getting you like analytics ready, and we're selling you this kind of higher level, it almost becomes a consultative package where we're like, hey, what analytics do you want to see what naming schemas do you want, etc. And so you can bolt these on to the under direct work. But once you've got these documents figured out, and you know exactly what is being installed from an operational perspective, quoting the analytics should be as simple as going and quoting the service cost, as well as going and quoting the initial training costs to your customer, there should be not that high of an install cost. So that's why you need to get ahead of this. And that's how you go and sell analytics. Ideally, you're not going to be selling analytics to existing customers that are, you know, three, four or five years in, they are most likely not set up, there's going to be huge upfront cost, the customers are going to seem excited, and you're going to sync cost of sales effort into that pursuit, only to be told that the install cost is too high to execute, unless you tie that to a retro commissioning play in which the utility is offsetting that. And you're using the analytics as a discovery tool, or as a way of validating the energy conservation measures post implementation. In that case, I have seen analytics work but a direct analytic sell to an existing building. I see those tend to fall flat due to the install cost. Okay, so we've talked about retro commissioning services, and we've talked about installation services. And now we are going to look at remote monitoring services. Now remote monitoring in this day and age is more difficult to execute than it used to be. Because the talent staff shortage is not just existing on the owner side. It's also existing on the controls contractor side. That being said if you do have a controls contractor, staffing, like solid bench right you're good Go, then you can look at remote support, I have seen organizations that work with us use this quite well, in their revenue models, they actually have built up remote operation centers. And essentially what they do is they have level one, level two, level three triage level one basically monitors a campus or level, building set point changes, complaints, etc. Level two will be where the complaints get escalated to. And as those complaints get escalated, they will be evaluated and triage by level two. And then level three is the major changes, you know, hey, we got to get into the system, do major programming, etc. And you can sell all different levels, right, you can sell level one, just basic level monitoring. And then they can work on things you discover on an ad hoc basis, or you can sell total coverage, and anything in between. The nice thing about both analytics and remote operations done right, as long as you do it ethically, you can generate quite a bit of work for your business. So by remotely monitoring customer sites, and discovering faults and discovering issues, you then can go find these issues that you will then go and be able to execute on which you know that $1 of work may generate $3 of work. Now, I want I use the term ethically, which is critically important, when you're placing yourself in the position of an analytics or remote operations, super Supervisory Service, you have a business responsibility to be ethical and to not just take advantage of people because they're uninformed. And you can do that, because we're a small industry word will get around real quickly. But as long as you treat people, right, you should be able to generate a lot of work. Now, of these three, as I mentioned, retro commissioning is typically on existing building assets. Analytics typically is on newer buildings, the remote operations can fall on either or it can go on new or existing building portfolios. So that's another thing that you can do as far as a service. Now, the fourth service I would look at is more of a modernization cybersecurity service. This is something that I have seen a few people do. And when done right to the right customer, this can actually be quite profitable as well, which is you go and you analyze a customer's site to understand if there CyberSecure, you'll be looking at things like are they using certificates? Are they encrypted? Are they patched? Are they modernized? Is their users or are their users following secure policies, etc. So those are things that you can sell as well. Now, that is something that is a little more difficult, little higher skill, tasks to sell. But it is something that I'm seeing increasingly important where we're getting phone calls from folks. And they're asking us to evaluate their cyber readiness. And that's something we don't do, because we don't typically do consulting services. And we definitely are not a controls contractor. But we are being asked by people. And so if we're being asked someone who does not market themselves as controls contractor or system integrator, then I definitely know that people who are system integrators and controls contractors, if they put themselves out there could provide those services. So that's a fourth service you can provide. A fifth service that you can provide to avoid pipeline depths, is going to be in the area of graphics and user modernization. Now, believe it or not, a lot of systems are installed with horrible graphics, and thus no one really ever uses them. The users change maybe an energy manager comes in or new facilities manager comes in. And they want to use the systems but they can't use the systems because the graphics don't work points are mapped incorrectly. So this is like a super light version of retro commissioning. You're not really coming in and retro commissioning the equipment. Rather you're coming in and doing a audit of the control system. You're saying these points are offline. These graphics don't work. They're not mapped to the appropriate things these submittals don't accurately represent what the system is. And I have seen time and time again where people make a lot of money, literally following the major OEMs around and going to their job sites after they've been executed and saying, Okay, this was a planet spec job it was taken as low bid and can What we can go and we can for this cost, make your graphics look nice, we can train you, we can make sure your OEMs are correct, we can make sure your points are all good. And so I see people literally back when I lived in Dallas, when I worked in the Chicago area, who would follow the major OEMs around in about a year after the projects were executed, right when they came out of warranty, would go and offer this building automation audit service. And they would go and say, Hey, this building automation systems, graphics aren't mapped properly, whatever, let us take a look at your system, let us give you our five point audit. And if you like our results, we can modernize it, it will be pretty quick, painless, not interrupting of your services, and you'll get a better system out that deal. So I've seen people do that as well. So I've given you five services that you can use right now to avoid pipeline depth. So how do you deploy these and actually use these in your sales process? Okay, so for the retro commissioning, what I typically like to do with retro commissioning is I like to target that at the end of summer. So what typically happens is customers run their buildings during the summer, they hit their peak days, and they're like, holy crap, we spent a ton of money on utility, they're feeling very painful. Maybe they had design days, and their spaces got hot, and people complained. So it's really fresh of mind. And this is something I want you to really hone in on here is that you got to catch people for these different services at the right times. So if someone just came out of a summer where their building barely kept up with their cooling demands, and they spent a ton of money, they're going to be very, very amenable to you saying, Hey, we can work with a local utility, assess your building, and then maybe get you a new chiller or modernize your control system, or upgrade this or upgrade that. And by the way, the utility will pay a portion of it. So that is a good time, right towards the end of summer to start having these conversations with an early Fall fill out of the applications and an execution kind of mid fall right before you roll into the winter work. And that should carry you over. And this works really well in hot states. And then you can do the flip inverse for cold states where they get really cold in the winter, and they had a huge gas bill, you can do the exact same thing. Now shifting from retro commissioning to analytics, what we can do as far as selling analytics is during the owner training, you can kind of evaluate the capabilities and operations of the operators. You can say, okay, these operators can't operate the building or they can. And then based on that level of skill assessment, you can say, Okay, we're gonna train you.
Phil Zito 23:03
And by the way, as we're training you, we've got this analytics system, you could trial. And this works really well, if you've already set up your system to be analytics friendly, as I mentioned, then you could potentially offer a trial. But like I was saying, if you've got your system analytics ready, then what can happen is you're going to be able to go and actually work with your customers to make a reason as to hey, this analytic system is free, try it out for a month. And if you like it, keep it and then for the rest of the stuff for your service, where you're doing remote operations. A good time to do that is almost anytime, anytime, just keep track of your customers understand what they're going through. And if your customers are starting to experience dips in their staffing, then you could potentially offer a remote operations. And then as far as a modernization of the system that is typically one year after the building has been complete after that projects done. You'll want to go to that customer and offer them those modernization services. Alright, I hope this has given you some good ideas that you can take with you into the market right now. And they will help you sell more services. They'll help you get more owner direct work. And also they will help you to just kind of lift up your Pat pipeline depths so that your pipelines more predictable. You're feeling less stress, and your business is able to make better decisions because they know that they have a predictable sales pipeline they can look at. As always, if you have any questions don't hesitate to hit us up at podcast at smart buildings academy.com forward slash 313 Are we will be changing the episode times to 9am Mountain Standard Time, at least for the next month or so because my wife has a boot camp she wants to go to in the morning. And so I got to drop the kids off, which means little later podcast time. That being said it will always be Monday was a Friday at right now 9am Mountain Standard Time. So thanks so much. Look forward to hearing any questions you have in the comments. Let us know. Thanks and I look forward to seeing you on Wednesday. Take care
