Peter Troast is the founder and CEO of Energy Circle, a unique and differentiated marketing agency that supports high-performance contractors.
Early in this episode, Peter shares two important definitions:
So in this episode, we focus on one thing: how heat pump contractors can drive more inbound calls.
Peter walks us through Marketing 101, 201, and 301:
If you're a heat pump contractor looking to get your phone to ring and then beat the competition for bigger tickets and higher margin jobs, this episode is for you.
[00:00:00] Peter Troast: We all know that the bar to becoming a heat pump contractor compared to other forms of contracting is relatively low,
Electricians are adding heat pumps. Plumbers are adding heat pumps. There's a lot of people putting out a shingle that says, yeah, we do heat pumps.
The nature of the competition, especially in heat pumps, is growing. It's becoming much more competitive and the nuances of different types of competition are becoming increasingly important.
The answer to that is, do you have a story that separates you from everybody else?
[00:00:39] Ed Smith: Welcome to the heat pump podcast. Our goal is to make sure the transition to heat pumps goes well for everyone. Homeowners, contractors and the planet. We cover all topics related to heat pumps. The science, the technology, the business, and the policy. We do something different again today. This is the first time we interview someone who is not a heat pump contractor. And we speak to Peter Troast founder and CEO of Energy Circle Energy Circle is an incredible example of a company that is highly focused and as a result, highly differentiated. They're a marketing agency serving one type of customer: high performance contractors. Peter defines that early in the episode.
So I won't spoil it here. The core topic we covered with Peter is marketing for heat pump contractors. In an increasingly crowded and competitive heat pump market. How can the best heat pump installers differentiate themselves and tell their story? As Peter puts it. How do you get the phone to ring with great leads on the other end of the line? We start with the basics in marketing 101. We get more advanced into marketing 201. And we end with marketing 301, the cutting edge stuff that's working today. This is an important podcast for anyone building a heat pump business, whether you're just starting out or whether you've hit that $5 million ceiling. Peter offers advice that will help you grow your business. And take it to the next level. Enjoy the show.
[00:02:05] Ed Smith: We are thrilled to have Peter Troast with us here today. He is the CEO and founder of Energy Circle. It is definitely one of the businesses that is helping fuel the transition to fully electrified homes, but in a different kind of way. Without saying much more than that, Peter, I'll turn it over to you. Tell us what Energy Circle is and does.
[00:02:26] Peter Troast: Thank you, Ed. Thank you, Eric. It's really great to be here. So Energy Circle was built, around the notion that, We need to fix a lot of buildings and in the fixing of a lot of buildings, there is an enormous business opportunity. What we recognized is that, one of the fundamental challenges of those kinds of businesses that are about fixing buildings, including people who are installing heat pumps, is that. The demand for those services is not direct. There's growing demand, obviously in the world of heat pumps for, I've heard about these things.
My neighbors have them. They're fantastic. They're really working and I want one. But there's also just the whole world of people that just have problems. They don't know that a heat pump is a solution to the problem. They just know that the room over the garage is freezing cold in the winter.
So what makes that interesting from a marketing standpoint is It's for something indirect to the solution. Being someone who's been in marketing my whole life came around to the conclusion that it's super challenging, super interesting,and a lot of fun to help people. In this industry, high performance companies find their way to the leads that can help them.sustain and grow their businesses. and what's happened over 15 years of being in business is that people have asked us for a lot of other things besides leads in the general field of marketing.
The company has grown and expanded into technology development and so forth. so that's Energy Circle.
[00:03:46] Ed Smith: Can you clarify a bit more? What do you mean by “high performance contractor”? like who are your customers,
[00:03:51] Peter Troast: Nothing happens in a house unless a contractor goes into a house and does some work. So we built the business model of Energy Circle as very contractor centric.
What's happened over time is that we serve various other entities of the industry. We manage the,the buildingscience.Com website for Joe Lstiburek and Betsy Pettit. And we you work for various associations and so forth. But our real, central focus is making contractors more successful. And, we define our market as high performance. from a business model standpoint, that includes both companies on the mechanical side, so traditional HVAC, as well as this new breed of kind of heat pump contractor, it also includes envelope oriented companies.
This often misconstrued term called “home performance”, which I think sometimes in the old days was the term for an envelope contractor that did air sealing and now home performance has become a much more holistic, definition of companies that are handling both the mechanical and the, envelope side of things. but lots of others too, we help, energy auditors, we help raters, I think we consider one of the components of being a high performance contractor to be this idea that you at least understand that the house is a system, but high performance also goes well beyond just the. Service delivery,it is your customer service. It is your marketing. It is your, manner in which you treat people. et cetera.
[00:05:17] Eric Fitz: we think that by being, singularly focused on those kinds of contractors and letting them become,the rising stars of the industry that it's going to bring the whole industry up. Got it.
[00:05:27] Eric Fitz: it's not about how many services they offer. It's about this mindset. It's about this philosophy. It's about understanding the building as a system, the customer experience.
[00:05:36] Peter Troast: Remember that what's on the mind of a homeowner is. a whole bunch of different things, It's, I'm tired of this room over the garage being so cold in the winter. It's, I'm about to have my first child and I want this house to be as healthy as it can possibly be when that child is born.
So it is a whole manner of different things that caused the trigger that caused someone to say, okay, I need a contractor. It's at that point that good contractors who have good processes can engage that homeowner in a bigger discussion about the overall performance of their house. And we believe that companies that are good at that, triggering that kind of conversation, end up solving problems better for homeowners and doing better, more profitable jobs, as a result.
[00:06:22] Ed Smith: Can you go one click deeper on how you serve them? "Marketing agency" gets thrown around a lot. What do you actually do?
[00:06:27] Peter Troast: When we first started Energy Circle, we were thinking of it being more of a software as a service, like a tool company where, you know, here's something that you can use and pay us 25 bucks a month. And what we discovered, is that most contractors just said, need you to do this for me, so we are capable of essentially being the marketing department of a contractor. And that is everything from Google search advertising to social media advertising to developing content to making sure that everyone has a really high performance website, to all kinds of new marketing tactics that are starting to come about and are starting to work now.
We have no real biases towards any particular type of marketing other thanwe don't want to spend marketing dollars poorly.
It's a critical investment by contractors. It has to work. and part of the beauty of why we tend to orient so much towards digital marketing is that, you know pretty quickly if it's working. The data is all there and it's not like a big fat radio buy that's out there in the marketplace for four weeks and you just really have no idea if it's actually working and it's a sunk cost.
You can't do anything about in most forms of digital marketing. We are constantly tweaking, if you do something for a week and it's not flying,you alter course and go forward. It's interesting in a couple of cases recently, we've gone back to some traditional things like direct mail postcards and we've gotten,
[00:07:49] Ed Smith: some effectiveness out of that.
[00:07:50] Peter Troast: so it's an interesting time in marketing with all that's happening in artificial intelligence. and our job on behalf of a contractor is to keep our eyes on what's going on, be at the cutting edge of what is working and also be on the cutting edge of what's working in this unique sector that we're talking about, what's on people's minds and making sure that we're helping our clients seize that opportunity.
[00:08:12] Ed Smith: We've heard several times from some of the stories we've gotten from, entrepreneurs in the space getting leads consistently. At a good cost is a make or break hurdle as folks start out.
And then also as they hit various growth plateaus, you've got to get to that next level of enough demand to warrant getting that next truck, hiring that next tech, that sort of thing.
[00:08:33] Peter Troast: it is a central challenge and it's a particularly challenging one for people who own contracting businesses, because, the stair step process of growth is, several new employees and a entire new truck and all of the equipment that goes along with that.
And in order to do that, you have to have a predictable volume of lead growth in your system
[00:08:54] Eric Fitz: can make smart business decisions. Peter, why do you think that your original hypothesis was, Hey, we're going to build tools for contractors to own the marketing themselves. And then you realized, Hey,They need us as Energy Circle to come in and provide this full service. Is there something about the contracting business in particular of why it's worked out that way?
[00:09:13] Peter Troast: Yeah,
[00:09:14] Eric Fitz: why?
[00:09:14] Peter Troast: I think it's largely to do with size and, we want our business model to be one that can serve companies of all sizes because we think the solution, the process of fixing a lot of houses is going to take a lot of players. over the years, we've served contracting businesses from, 750, 000 in revenue to 100 million in revenue.
The sweet spot for us tends to be in that, two and a half to 10 million, I very much want our company to be able to serve that smaller contractor, and to help them grow. So we've structured ourselves,to be able to do that, at budget levels that are appropriate for a business of that size.
At the end of the day, you should only really spend, a amount on marketing that is, is some percentage of. revenue and a lot of people in contracting businesses talk about 7 percent a sort of a place to start the conversation of what a marketing budget ought to be. Lots of HVAC companies that have been in the market for a long time and have lots of service contracts and established relationships are doing it at less than 2%. But it really depends on the situation. no matter what. Cost effective,for the business and it gets to be a very complex world of, the, the cost of a lead for, furnace replacement is a whole lot different than, cost of a lead for,attic insulation or something like that.
we get very deep into people's businesses and understanding exactly where that, what their economics are, which leads qualify best close best,and result in the right kind of job sizes
We really want to get into marketing 101 and then a bit of 201 and maybe even 301. so let's start at the basics. If someone was starting a business, often they think if they do great work, they're Word of mouth will spread and they'll build a business that way, which happens a lot.
[00:11:06] Ed Smith: But at some point you need marketing. So basically, what is marketing for a contractor? Why should
[00:11:13] Peter Troast: they care? making the phone ring. so it's, that's the overly simplistic, term, but I do want to emphasize like, Today we're talking about things like Google ads and,all of these things, marketing is how you answer the phone,
We listen, to and thousands of first time callers, how good that experience is where someone picks up the phone and calls a contractor's business, becomes an absolutely critical, piece of it.
So it's a very holistic thing. It's wearing the booties in the house. It's what that experience is like. it's what happens at the end of the job. it's the interaction that your people have with all of that is marketing, All the way back to, what's the name of your company and do you have a mascot and what color is your logo and all of those things that, are important at various, levels.
[00:11:59] Eric Fitz: If you boil it downhaving a good story, it's the cocktail party test. tell me about your company? how do you say something in short form? That stands out, is memorable, and is different from what people might be expecting, all the data shows that the assumption on the part of most homeowners is that an engagement with a contractor has lots of chances of not going well. there's fear. there's worry, there's concern Good contractors have figured out ways to tell their story that address that problem. That's interesting.
Are there like these silver bullets in marketing or is it all of these little pieces that come together, All
[00:12:38] Peter Troast: pieces. And I think,if there's any truism about marketing these days is what worked, two years ago might not be working today. Or, certain types of marketing, just they got too expensive and they don't, they're not justified anymore. so having that kinda level of diversification is important. Back to the original question though, to get started, what are the kind of the most important fundamentals?
if I'm a tech in a company and I've been just doing great work for a long time, and then I'm going to move out and start my own company, hopefully you're going to get some friends and family and word of mouth and all that stuff at some point,you've got the beast is larger than you can do that.
And yet, I the analogy of a mountain climb, When you are a brand new company, you really at the bottom of that mountain and there's a certain, number of things that you've got to do. It's that you've got to have a good website. Google, unfortunately,has a bias towards age in websites.
You are immediately somewhat penalized by being new. the ability to, run your business and rely on organic traffic, meaning, traffic that comes from people sitting down, searching for whatever the thing is, your website and calling you. is difficult. in the beginning, but still, you've got to start with that website and you have to have a good investment plan for that website set so that over time, that natural organic traffic that will start to come to you will build.
What that means in the early stage of a business, is you got to get out in the world with more advertising types of marketing activity that get your message in front of people the tried and true for this is Google ads, we all kind of love to hate them. the thing that I think people need to understand about Google ads is that the way they work is that someone searches, they see an ad, they click on that ad, you get charged for that ad. The real rubber hits the road when they land on your website. And do they end up contacting you? So if you're paying for a lot of clicks, they land on your website and don't do anything. good. the challenge, however, of making Google ads work is that the terms that you'd be willing to Google money for a click have to be commercial in nature, they have to be the kinds of terms that, indicate that someone is in the business of, I want to get heat pumps, you don't want to spend a lot of money getting clicks for people who are researching heat pumps to help their kid with their, science paper, that becomes the nuance, There is a piece of your marketing that is capturing the demand that's already there. But there's another side of the marketing, which is creating some of that demand. And we are in a place where homeowners know nothing about this, There is no search for home performance, no one sits down at Google and says, find me somebody who can give me some of that whole house love that doesn't exist. Consequently you have to be very good at bringing those leads in from the places that people are searching for,that then bring them in to have conversation.
[00:15:40] Eric Fitz: are you saying it's important to, to still do that because that's a quick and easy tool to experiment, given like a, an early stage of a market or a set of keywords that's a quick way to get feedback and be like, yes, this is the direction we should go. And the rest of these other investments are also going to work well alongside of the pay per click advertising or whatever else you're doing.
[00:15:59] Peter Troast: Is that right?
And we're different a little bit than a lot of other agencies in the world in the sense that we also incorporate in display advertising, And we also include YouTube advertising in there because these things all are dance partners,
They all play a role,call them assisted conversions and geeky marketing speak, where all of these things are contributing to where it is, but oftentimes it's that, final attribution, right? This person sits down and says, heat pumped contractor near me, and that's the one where, you got to win that.and, that becomes the ticket. that's an overly simplistic thing to talk about by the way, it is really being very good at all the nuanced. kinds of things that are out there that people are searching for. including by the way, problems people don't know that a heat pump is a solution to the bonus room problem, right? they just know they have a bonus room problem, we think of these as gateways, Because,when you get the invitation to the kitchen table, what is your process? And I'm a strong believer in some kind of building science oriented diagnostic process at the outset of the relationship and been a lot of talk recently in the industry about, does that have to be a traditional energy audit?
Do you have to use a blower door? Do you need to use a thermal camera? you guys know, I, a big advocate of, starting to expand some of the tools, that people are using and, including, thanks to tools like yours, the ability to do a manual J,at a expense that is vastly lower than what it took traditionally.
The experience for that homeowner has to be one in which, they felt like this is a extremely knowledgeable person. they looked at my house, they assessed it in its individuality, and then they made a recommendation based on my house. And, we just have a lot of. evidence over the years that when the relationship starts like that, the end result jobs are larger andthe customer relationships are longer that kind of approach is separates you from, yeah, I'll send a guy over to write you a quote,
[00:18:05] Eric Fitz: So it's understand what the building needs, understand what the humans need andbe the glue to bring those things together into a solution that's tailored to the problem at hand.
[00:18:16] Peter Troast: That's exactly right. I know you had Hal Smith, from Halco and upstate New York,on the podcast and he. an example of a company that has, gotten very successful and good size. He does everything. If you want to, wind turbine like yours, Eric, if you want, solar,you've got a moisture problem because of poor gutters. if you want your basement refinished, he can do all of it.
What I think is,so important about that initial relationship is that he's building customers for life, he's got 10, 000 people on service contracts. it is very often the case that the full suite of things that you might do to really address a house and turn that house into a high performance building are never going to get done in the first job.
So I think contractors have to, recognize that your goal here is a lifetime relationship, with that homeowner and a clear process of how you serve their needs and remind them of their needs. over, a long period of time.
[00:19:13] Ed Smith: Let me see if I can replay what sounds like marketing 101
It's how you tell your story Such that the phone rings That is all aspects of how you tell your story. How do you answer the phone? How do you show up at the customer's home with booties?
Explaining who you are to drive sales, you need to differentiate yourself from the competition. And the way you've seen be extremely effective is being high performance. And it's basically looking at the home as a system and being rooted in the tenets of building science. And you can explain that in any number of ways, but that's a major differentiator for you and your clients in how they build long term profitable businesses. The basis of that is sure how all of your employees behave. Also, your website, like that's often a thing that you start with. How do we get a website that tells our story the way we want it to? And you started to get into what drives leads to it. And it's, SEO. So organic search, like what's letting you rise in the Google rankings.
And then you started to get into a bit, where do you spend some marketing dollars on things like Google advertising. to drive that traffic to your site in a way that wasn't necessarily organic, just based on your search rankings. if that's a fair summary, which I think is the longest I've ever spoken in one go on this podcast, I'm curious, what's marketing 201 look like?
[00:20:39] Peter Troast: One way to think about the difference between 101 and 201 is that. There is, certain amount of demand that exists out there in the market. So you want to go try to capture that. And if you're good at 101, you're doing everything you possibly can to capture the demand that actually exists. The reality is, a lot of. Contracting companies,became you began to use the COVID era standards as the benchmark of activity.
People were investing significantly in their homes. they were spending a lot of money on their homes and as COVID waned and we went back to normal.
Combined with, just general economic concerns, about high interest rates and about inflation,the volume of just general demand for what it is we're selling is somewhat down.
We're in a kind of a tough time. So to answer the sort of 201 question, if you are doing everything right, to capture that demand that exists, the homeowners that are saying, I need this and I want this, There has to be a piece of what your activity is that is creating that demand,
That's a whole suite of other types of marketing led in large part by social media, where
[00:21:47] Ed Smith: Spend less money because it's pretty inexpensive when you start to target and devote more of it to more educational kinds of activities like, just in the heat pump category, for example, like one of the things that we monitor,incessantly, frankly, is the nature of the questions that are, people are asking about heat pumps and, and it's obvious when you think about it, initially there's like, how do these things work,
[00:22:12] Peter Troast: But then there's more discriminating questions, which is, can this thing provide heat in the climate that I live in?
All of those kinds of skepticism questions one of the things that we've seen an evolution of over time is that in markets that are. Becoming more mature around heat pumps. And I think this may be regionality is something we should talk a little bit more about because it's a very important thing to start the discussion with when we talk about heat pump marketing is that very different. depending on where you are in the country, You talk about heat pumps in the south and everybody's what are y'all, excited about, it's always been heat pumps,
[00:22:48] Ed Smith: I was hoping you were going to attempt a southern accent for that. Well done, Peter.
[00:22:51] Peter Troast: attempt, but,but in, in Sacramento where we've done some work in California,it's a, hot,summer climate, but it, the Tule fog rolls in the winter and it's chilly. there's a lot of gas, furnaces in Sacramento. People definitely need heat. There was a time years ago before heat pump technology was where it is today, where a lot of heat pumps got installed and didn't work well. they switched over to resistance, constantly.
People's bills were high.so the educational challenge in Sacramento is to convince people that we've overcome all of the bad reputation that heat pumps got when the technology wasn't there and the new technology is really good. In the Northeast, where I'm located in Maine,it's an entirely different thing.
Maine has an incredible success story, more than a hundred thousand, heat pumps. I know you had, folks from Dave's World on and,until recently Maine never really needed air conditioning and you had this, beautiful twofer, which is, I can get a heat pump.
I don't have to take my oil system out necessarily. I can overlay this. I get air conditioning and, it's going to provide some of the heat that I need. And, and this is where I think it would became so successful is that, everyone realized it was providing a lot more of the heat than anyone expected because of how high quality the cold climate heat pumps areI think it's just, these are just examples in which, it's very important to understand the market that you are in right, is to how you go to market, but the beauty of a place like Maine is, I think. we have crossed the tipping point, the, there is a significant change in, in, in the question oriented searches that are happening. It's less and less about will this thing work or does this work or is this sufficient? The trend is much more towards, I want one of these things.
And the searching is much more commercial intent. I'm hunting for a contractor. I want to try to get this done.
So, Marking 201 for heat pumps. Creating demand. By figuring out the questions folks are answering, particularly about heat bumps, what questions in your region are folks asking about heat pumps and then answering that.
[00:25:05] Ed Smith: And the best way to do that is by social media, how does someone figure out What are the questions being asked often about heat pumps in their particular area?
[00:25:22] Peter Troast: and just. what's the conversation that comes through, with your CSR, whoever's answering that telephone. there are tools out there some are free where you can get a sense of that.
And, we've gotten more trusting Asking a question of Google. consequently there's a general shift towards more query based searches as opposed to, two word searches kind of thing. maybe this is 301 so you're doing all these one on one things, You're doing all the two on one things, At some point, you get to a place where the homeowner is, Deciding, am I going to call that contractor or that contractor?we all know that the bar to becoming a heat pump contractor compared to other forms of contracting is relatively low,
One of the things that we're seeing is a flocking of, people from various, walks of life into the heat pump business, right? electricians are adding heat pump. Plumbers are adding heat pumps. there's a lot of people putting out a shingle that says, yeah, we do heat pumps. there's also, I a new breed of, more tech oriented kinds of companies that are. trying to seize the moment around the electrification movement and being the entity that has a very well tuned and high quality customer experience that says, come to us, we'll help you make a plan.
We'll sort out the installation of whatever it is we decide is the right thing for you. Long winded way of saying the nature of the competition, especially in heat pumps, is growing. it's becoming much more competitive and the nuances of like different types of competition are becoming, increasingly important.
the end, the answer to that is, Is back to the story, which is, do you have a story that separates you from everybody else?we talked for a while, obviously about my, passion for the kind of, building science orientation. That's one leg in the differentiation. regime, there are many other ways to differentiate. And, some of those can be as simple as like just really fantastic community involvement, If you are doing something very meaningful in your community that shows you to be a genuine company. but. One thing I think is worth,thinking about in this as a point of differentiation is that, in this world of, lots of incentives,
There are, companies that are coming to market out of whole cloth. And artificial intelligence is enabling companies to create what seem like very mature websites in a very quick period of time. so these are,these are companies that come out of,out of nowhere, you've got these tech companies that are, funded and glossy and look really good. and, it is more and more important that,The genuineness and the humanness of contractors come through and the other thing I should have said is that the prevalence of, private equity owned companies in HVAC, I'm not saying it's a bad thing necessarily, but if you are locally owned, you can make a decision about whether you want to lean into that as one of your points of differentiation.
[00:28:30] Ed Smith: That was great.
[00:28:30] Eric Fitz: the 101 to 201 to 301. The thing that I keep coming back to my mind is I'm a contractor. thinking about marketing and in my brain, I'm like, this is an expense.
I got to spend a bunch of money. How do you get the mind shift to happen? That this is not an expense, that this is an investment. your business?
[00:28:50] Peter Troast: I think that's exactly the right question, Eric. And, I love the old quote, the famous, Philadelphia retailer, John Wanamaker said, half the money I spent on advertising is wasted, the problem is I just don't know which half. most businesses,I think the standard approach is you ought to be spending about 7 percent of gross revenue on marketing.
Just to be clear, does not include sales, but it does include the,the personnel costs that are devoted to marketing. it's not, it's a sort of a center of a bell curve number, but it is something, to say that you should spend that much money is the beginning of a, of knowing, what the, the conversion rates are.
Are in your business such that you can know at any given time, this is what I'm spending for a lead. This is how many leads are qualified, This is how many of the visits, whatever form that visit takes. We convert. And this is how many quotes close. And that gives you at the end of the day, a specific number that is, in order to get this job that I charged $18,000 for my cost of acquisition for that job was X. if you take that 7%, this is what I want people to be thinking more about. if you are spending more than 7%.
And remember, we're talking about margin, This is just coming out of your margin. If you're spending more than that, You need to really look hard at whether particular type of marketing is continuing to work for you, having the access to those kinds of numbers, so that you can be doing that math and saying, we've been going to home shows for years. Home shows are costing us X and this is how many leads we're getting from him and it's not working anymore.
You need to have that kind of quantitative approach, I think, to your marketing, as opposed to saying, geez, can't not go to the home show. We haven't missed one in, in forever. one of the things we really try hard to do is make sure that people, are in tune with their numbers.
And that always eventually comes around to having some kind of CRM customer relationship management system. ServiceTitan is obviously, the big name, a very expensive one. It's a lot more than a CRM obviously. but is an effective tool if you can afford it to help run your business, but it's not necessary,
[00:31:04] Eric Fitz: Makes sense. And I like to tie it back to how they're treating their own customers. is a system just like a home. you said one of the key pillars is to approach the home using some kind of building science. And, really that's about being data driven in some fashion. And that's what you're saying. You need to understand those numbers for your business. And sure, it would be great if you're on a platform like Service Titan or others that really is very sophisticated. You can pull all this data automatically. But. Sometimes just starting with a spreadsheet and just getting something you might be off by plus or minus 20%.
But that's better than just completely guessing you can make good progress down the path to a more sophisticated approach over time.
[00:31:47] Peter Troast: that's exactly right. and one of the starting places when we begin a new relationship is just to make sure that the, of the systems are in place to, to be able to do that measurement. And, one of the beauties of, yeah. Of digital marketing is that can be done,we use call tracking.
So we know for every single telephone call, we know the source of that call, did that person see the Google ad? Did that person read an article on your website? where did that person come from? we have a treasure trove of data over time of what's working, what's not working, and which ones are converting and which ones are not converting.
CRM intimidates a lot of people and it seems like a big software project and, has chances of going awry most of the time, whatever data you put into a CRM, you can export out.
So if you outgrow it and it doesn't work. It's not a big deal. Try something and get going and record everything.
[00:32:37] Eric Fitz: And I was thinking we might switch gears to get it a little bit into some. Kind of market insights. can you give a quick sense of like across the country? Are there certain regions of the country where it's mostly the homeowners are still saying, what the heck is a heat pump they're like, Hey, I, Okay. need a heat pump. I've got, I've got a comfort problem and I'm trying to figure out which is of the five contractors in my area are the ones that I want to go with.
[00:32:59] Peter Troast: it's a hard thing to do. I think like some of the regionality that I talked about earlier, in the case of a Southern heat pump, it's always been a heat pump, maybe there's an opportunity for a more efficient system here, maybe addressing distribution to get better comfort, it ends up being a very tailored thing. I don't want to, under value the role that incentives have, because, it's hard not to look at the country, and say, okay, these very rich incentive states like Massachusetts and California and New York, are You Quite successful in the world of heat pumps, and it's in part because they've been heavily incentivized.
There's a whole category of people who, learn about the existence of a rebate and want to take advantage of that. the other piece that I think is really important for people to understand is that all of those programs and, in the IRA are very, oriented towards low and moderate income.
And people hear that and say,I don't. I've, I've made a kind of business decision that I'm not really participating in low income, but the definition of moderate income in the IRA is 150 percent of area median income. So typical family of four, I think I'm roughly right in this is, in Sacramento, which we talked about is like 140, 000 a year in income.
This is us, right? DOE says 70 percent of the homes in the U. S. are in this category of moderate income. the marketing tactic to get at that audience is very nuanced, This is an audience that, think of the improvements that they're making to their house as things that they'll do themselves.
There's a lot of things that go into deciding what's the right marketing strategy for any given contractor
Peter, what advice do you have for a contractor who's evaluating marketing agencies?
[00:34:43] Ed Smith: What should they look for? What should they ask to make sure they get a great one.
[00:34:49] Peter Troast: don't sign a contract.if your agency is not performing for you, you should not be obligated to continue to pay them money. So we have never had contracts at Energy Circle because I don't, I just don't think it's a reasonable thing to say to somebody,you're unhappy with what we're doing.
We're not performing and, Oh, but sorry, you signed a contract. So I'm going to take your money for the next eight months. That's just ridiculous. And make sure that the agency has the expertise that you want.
There's some big players out there,
I don't mean to say that there aren't very good effective firms out there, but, you hear a lot of, one of the things you hear a lot of as well.the person who's trying to write the content for me just doesn't understand anything about, content.
Building science, and it's just too cumbersome. It's too hard, I just have to do so much. I have to do too much editing, they don't understand it. you hear a lot about turnover, That, like my account manager and person's gone. so I don't know.
I, it's a tough question and you're, I'm not trying to throw the competition under the bus. we,We tend not to, get involved when there's like a beauty contest, we'd love more beauty contest if someone's considering us versus somebody else. It just tends not to be the case.
People more understand who we are, understand that we're a good fit for them and they come and, ask for a conversation with us, which always starts with a free evaluation of can we really move the needle for you?
So it strikes me you do exactly the advice you gave. You're massively differentiated. You've figured out where you want to play. You tell your story well, and you start a sales conversation with not a building science evaluation of a home, but a marketing science evaluation of someone's business.
[00:36:31] Ed Smith: And can you help them? Which actually, I think that's almost where you started the pod, which is a nice and fitting place to wrap up.
[00:36:40] Peter Troast: yeah
[00:36:42] Eric Fitz: So speaking of wrapping up, we usually like to ask,what are a couple of sort of tactical recommendations? someone who's trying to start or has already started a, a heat pump business and is really trying to move things forward. What would you recommend?
[00:36:57] Peter Troast: I think leaning into, in this marketplace, like the first thing is, make sure whatever your system is,for the capturing the demand that exists or make sure that's tuned up. But I think we're having some real success by leaning into more of that creating demand side of things with sort of a mix, we talked about social media, pretty simplistic way to talk about. Facebook is continues to be a good workhorse. Instagram is a workhorse. we're starting to get some traction with Reddit advertising. and,that's pretty interesting. all of the, the traditional ways that we built awareness, which was, TV and radio or that, now TV and radio is increasingly accessible to us in the form of things like Spotify and like streaming TV advertising.
And These things that historically were out of reach. I am, increasingly recommending to people that we really have a pretty sophisticated kind of awareness and educational component to their programs.
[00:37:50] Eric Fitz: I just want to make it clear, Because all of those things are super targeted, The only people we're talking to and putting anything in front of on Facebook are homeowners of certain characteristics that have these interests in mind. And it's it becomes a very super rifle shot targeted thing. That means it's not very expensive, cost of advertising is all about the number of eyeballs that you're sending your messages to. And when you narrow those eyeballs to just the right people, the cost of it is very,Comparatively minor. Nice. Love that.
[00:38:24] Ed Smith: All right. Peter Troast. Thank you so much for joining us on the heat pump podcast.
[00:38:28] Peter Troast: it's been great guys. Thank you for having me. Thank you for really good questions. I think we, we redefined, 101, 201 and 301 in the course of the discussion.
[00:38:38] eric outro: thanks for listening to The Heat Pump Podcast. It is a production of Amply Energy. And just a reminder that the opinions voice, were those of our guests or us, depending on who was talking. If you like what you've heard and haven't subscribed, please subscribe in your favorite podcast platform. We'd love to hear from you.
So feel free to reach out. You can reach us once again at hello@amply.Energy. No .com, just .energy. Thanks a lot.