DWM - 2009 - MayJune

Volume 10, Issue 5 - May/June 2009

trend tracker

Know the Facts
The Key Challenge of the Stimulus Package
by Michael Collins

My furnace died abruptly on a recent chilly evening, which set in motion events that helped me learn firsthand about the key challenge of the stimulus package for door and window manufacturers. I was relieved the following morning when the local furnace company told me that I would be the first stop of its technician. The repairman arrived and said last rites over my furnace, telling me it would make more sense to buy a new furnace than try to repair the existing one. I muttered something about having hoped the furnace would make it through another year. He said, “Actually, this is the best year this could have happened.” I asked him what he meant, even though I already knew, because I was curious to hear how he would put it. He described for me in detail how the tax credits in the stimulus package would pay part of the cost of a highly energy-efficient furnace.

When the field sales representative arrived, he also was an expert on the provisions of the stimulus package as they related to his product offering. He was even aware of a program offered by the local gas company, through which it gives buyers of highly energy-efficient furnaces a one-time payment. He also asked me about the size of my gas bill and ensured me with enthusiasm that my gas bill would drop dramatically, helping pay back the cost of the furnace. By the time he left my dining room table, I had agreed to buy not only a new furnace, but a replacement for my ancient air conditioner and water heater as well. Between the $1,500 tax credit, the money from the gas company and the utilities savings, I felt like I was getting away with something.

Be a Stimulus Expert
What’s the point of all of this? Knowing which of his products qualify for the stimulus package and offer other costs savings and benefits allowed the sales rep not only to up-sell me to the more energy-efficient (and expensive) furnace, but he nabbed the sale of an air conditioner and water heater out of the blue.

Guess what else? In retrospect, I think the opportunity to present such a “no brainer” sale of a series of new appliances had something to do with the fact that I was bumped in front of routine repair calls to become the first call of the day. They didn’t want to take a chance that I would call a different provider. Also, the sales rep focused his pitch on dollars and cents, not the environmental benefits of my new energy-efficient appliances. He didn’t even slip it in there as an afterthought, so I could feel that I was greener after spending all that green. If the tax credit were for purple products instead of energy-efficient ones, his pitch would not have to change at all.

All Levels Must Be Informed
That brings us to the key challenge within the opportunity that is the stimulus package—taking full advantage of the new programs by disseminating knowledge of the provisions of the package throughout your whole organization. The responsibility for knowing how the stimulus package helps customers buy your products properly rests at every level of your organization. If even your production workers were trained to know which of your company’s products qualified for a tax credit, can you not imagine that at least a few of them would become passive or active sales reps for your products as a result of being involved in an exciting opportunity like that? Every member of your organization, from the president to those in the maintenance department, must know exactly which of your products qualify for tax credits. That service technician would have to be forgiven if he had offered me weak encouragement by saying, “There’s a program where you get some money back. The sales rep will explain it when he gets here.” He went far beyond that, though, and the sale of those appliances actually began at my conversation with the service technician. Part of the sales rep’s job was done before he arrived at my home. That kind of thorough knowledge isn’t accidental; the furnace company had to have taken proactive steps to ensure that their technician knew how to deliver that pitch. As taxpayers, you’ll all be funding the cost of the stimulus package in the future. You owe it to yourselves to generate as many sales as possible while those credits are still in place.

Michael Collins is with Jordan, Knauff & Company, an investment banking firm that specializes in the door and window industry. He may be reached at mcollins@jordanknauff.com. Mr. Collins’ opinions are solely his own and do not necessarily reflect the views of this magazine.