Easy to forget these guys were around wayyyyy before Saturday Night Fever…
Which brings us to today’s topic – words.
As Barry sang so beautifully, words are all we have. We need to use them carefully, and meaningfully.
There are words we use regularly in our industry, but when those words are used carelessly, they become meaningless.
Here’s an example: ”Payback. ”
Then there’s payback’s derivative: “How long before this new boiler pays for itself?”
Gang, the only way a boiler, furnace, variable speed circulator or any other power or fuel consuming appliance will ever “pay for itself” is if it gets a part-time job.
We strike a deal with the appliances in our lives. We feed them fuel, and they do jobs for us. That’s true of the garbage disposal, the oven, the garage door opener and the boiler.
A boiler isn’t an ATM, a slot machine or an interest bearing investment.
It eats fuel, and it poops heat.
You can call it an investment if you want, but that’s just putting lipstick on the pig.
Or, as Wesley Snipes once said, you can put a cat in an oven, but that don’t make it a biscuit.
How we got here is obvious. Energy costs a lot. Your customers crave efficiency. We manufacturers tout efficiency. You want to sell efficiency.
And efficiency should equal $$$$.
Which leads to…
“How long before this new boiler pays for itself?”
When a customer asks that question, a fundamental shift in the boiler replacement/upgrade process occurs. It’s no longer about replacing an old, worn-out, unreliable appliance with a new, modern, trouble-free and more efficient model. In their mind, it’s now an “investment.” And investments should increase net wealth and have a measurable return on investment, or “ROI.”
But boilers don’t really do that. They eat fuel and poop heat.
And it’s not a matter of having one or not having one. If you don’t want to freeze to death this winter, you have to have one.
What they’re really asking is “how long before the money I spend on this project is offset by the money you claim I’m going to save in fuel costs?” That’s a better question, but even that question needs to be put into context.
Are they thinking of upgrading from a perfectly good and well-maintained 10-to-15 year old cast iron boiler with plenty of life remaining? Or do they have a 45 year old clunker that you’ve kept running with paper clips, bubble gum and prayer, and they’re trying to choose between a standard efficiency and a high efficiency boiler?
In the former, you’d be hard-pressed to show any financial reward. In the latter, they’re asking you to justify the difference in cost. They want to know how long before the monthly fuel savings offset the added cost of the more efficient boiler.
And if you do the math (click here for an example), the numbers may not tell a pretty story.
Besides, the concept of “simple payback” has many flaws, as my man Allison Bailes explains in his brilliant Energy Vanguard blog here.
The takeaway from today’s blog is this: when you focus on energy efficiency as your #1 (and perhaps only) selling point, the customer’s focus is now squarely on the flawed concept of “payback.” All of the other benefits of the upgrade – greater reliability and and peace of mind, ample hot water, greater comfort, neater appearance and more usable space – now have little to no impact.
Now it’s all about what very well may be a small amount of money.
I’d be interested in hearing your thoughts on the subject, and we’ll be discussing payback, ROI and other “words” in the coming weeks.
In the meantime, let’s all hear another Bee Gees classic from their pre-disco days…
A tune that never fails to make he homesick…
Filed under: Uncategorized