Mystery Shopping for Water Heaters: Market Mechanics Revealed. Senior Manager, Business Development

Transcription

1 Mystery Shopping for Water Heaters: Market Mechanics Revealed Presented by: Presented at: Brian Booher Senior Manager, Business Development 2019 ACEEE Hot Water Forum

2 Heat Pump Water Heater Sales Barriers 2

3 Transformed Market

4 Transformed Market

5 When [installers] recommend a HPWH, customers will end up going with that choice 30 to 50 percent of the time. Cadeo, Northwest Energy Efficiency Alliance (NEEA), Northwest Heat Pump Water Heater Initiative Market Progress Evaluation Report #4, September 27, 2018, p. iii

6 MYSTERY SHOPPING JUNE-AUGUST 2017

7 Key Research Questions What is the emergency water heater replacement sales process? What is installer familiarity, knowledge, and overall attitude to HPWH? How actively are water heater installers selling HPWH? What is the price premium on HPWH vs standard? How are sales practices impacted by installer certification and utility program design?

8 6 States 192 Installers (% Certified) WA 31 (52%) VT 31 (53%) ME 32 (53%) OR 30 (53%) FL 36 (NA) MD 32 (44%)

9 Southeast Market (2017) Maryland EmPOWER MD $500 Mail-in/Online 75,000 ERWH annually Florida Orlando Utilities $500 mail-in/online No programs outside Orlando 302,000 ERWH annually Source: D+R International, 2017

10 Northwest Market (2017) Washington NEEA Hot Water Solutions $200 upstream 33 utilities $500-$800 mail-in/online 87,700 ERWH annually Oregon NEEA Hot Water Solutions $200 upstream Energy Trust $300, + local mail-in/online 42,000 ERWH annually 12+ distributors, 160+ branches, 6,000+ installers Source: D+R International, 2017 Northwest Energy Efficiency Alliance, MPER #4, 2018

11 Northeast Market (2017) Vermont Efficiency Vermont $500 Instant Rebate 6,000 ERWH annually 35 certified installers 60% HPWH Maine Efficiency Maine $750 Instant Rebate 19,000 ERWH annually 166 certified installers Source: D+R International, 2017

12 What did we find?

13 The Typical Installer Sales Process Person calls after water heater breaks Manager/Technician answers Customer service or sales person answers What is current water heater capacity and type? Caller provides capacity and type Gives installed price, make, and time of next availability

14 Sales Process When EE Option is Requested Installer rep. mentions HPWH unprompted Caller asks about EE options Installer gives HPWH as option Installer doesn t mention HPWH Installer rep. Where is it located? Caller asks specifically about HPWH Installer rep. mentions rebates/tax credits Caller asks about rebates/tax credits Installer rep. quotes installed price Make of HPWH Soonest install date Installer rep is unfamiliar

15 Certified Installers (n = 17) Non-Certified Installers (n = 15) Certified Installers (n = 13) Non-Certified Installers (n = 18) Certified Installers (n = 14) Non-Certified Installers (n = 16) Certified Installers (n = 16) Non-Certified Installers (n = 15) Certified Installers (n = 14) Non-Certified Installers (n = 18) Certified Installers (n = 0) Non-Certified Installers (n = 36) Mentioned HPWH Immediately 100% 75% 50% 25% 0% 29% 7% 23% 22% 7% 0% 19% 0% 0% 0% 0% 3% ME VT OR WA MD FL

16 Suggested HPWH Or Asked Where It Is, When Asked Are There Any More Energy Efficient Options? 100% 90% 100% 100% 86% 93% 80% 70% 67% 72% 75% 69% 78% 60% 50% 40% 30% 20% 20% 28% 10% 0% Certified Installers (n = 17) Non- Certified Installers (n = 15) Certified Installers (n = 13) Non- Certified Installers (n = 18) Certified Installers (n = 14) Non- Certified Installers (n = 16) Certified Installers (n = 16) Non- Certified Installers (n = 15) Certified Installers (n = 14) Non- Certified Installers (n = 18) Certified Installers (n = 0) Non- Certified Installers (n = 36) ME VT OR WA MD FL

17 100% Correctly Named Rebate Provider or Rebate Amount 90% 80% 70% 60% 50% 81% 74% 40% 30% 33% 34% 20% 10% 0% ME (n = 32) VT (n = 31) OR (n = 30) 13% WA (n = 31) MD (n = 32) 3% FL (n = 36)

18 Installer Framing of HPWH Option 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 84% 77% 27% 35% 38% 19% 16% ME (n = 32) 19% 3% VT (n = 31) 50% 23% OR (n = 30) 29% 41% 35% WA (n = 31) 22% MD (n = 32) 53% 28% FL (n = 36) Positive Neutral Negative

19 Quoted Prices Standard (n = 32) Heat Pump (n = 32) Standard (n = 30) Heat Pump (n = 30) Standard (n = 28) Heat Pump (n = 26) Standard (n = 31) Heat Pump (n = 26) Standard (n = 32) Heat Pump (n = 25) Standard (n = 36) Heat Pump (n = 24) $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 ME VT OR WA MD FL

20 Installers That Could Install New WH Within Two Days Std Within 2 Days HP Within 2 Days 120% 100% 100% 80% 64% 60% 45% 45% 40% 33% 33% 30% 18% 20% 10% 9% 86% 44% 0% ME VT OR WA MD FL

21 CONCLUSIONS

22 Midstream instant rebate programs impact behavior Offer HPWH unprompted Have a positive attitude about HPWH Know and use HPWH selling points Quote lower prices for HPWH Give same installation timeframe regardless

23 But instant rebates alone aren t the answer Direct engagement with installers and distributors is essential to align programs with business models and get buy-in Few companies install more than 5 WHs per month; it is hard to adopt processes and dedicate training when the sale is very infrequent Volume installers are incentivized on volume and resistant to complex installs and sales Distributors won t discount price up front if they need to wait for data or if installers don t know to expect a discount The more utility programs, distributors, and installers in a market, the harder it is to establish consistent messaging Reduce administrative burden by providing admin fee, automating processes, and coordinating messages as much as possible

24 CONTACT INFO BRIAN BOOHER ACEEE 2019 HOT WATER FORUM NASHVILLE, TN TUESDAY MARCH 12, 2019, 1:30 PM - 3:00 PM PANEL 2D INNOVATIVE PROGRAMS: WHERE ARE WE TODAY? PRESENTER: BRIAN BOOHER CO-AUTHORS STEPHEN BICKEL AND ASHER FINK