We won’t get fooled again.

That was the underlying message of WaterFurnace Intl. Inc.’s 2018 National Sales Meeting in Orlando, Florida.

After navigating without the 10 percent commercial and 30 percent residential federal tax credits, which were abruptly discontinued at the close of 2016, the credits have returned. While the manufacturer of geothermal heat pumps is certainly ecstatic to have the credits back, it is vowing to be ready for whatever the future holds — with or without tax incentives.

“2017 served as a haymaker that landed right on our jaw,” said Sean Dillon, vice president of residential sales, WaterFurnace. “While we were getting hit from all directions, it’s almost as if we didn’t protect ourselves. However, we won’t get fooled again. We are renewable and will grow back. And, with or without the tax credits, this industry will be successful going forward.”



The geothermal tax credits were reinstated as part of Congress’ $320 million continuing resolution (CR) that became effective Feb. 8. The residential incentive is retroactive to Jan. 1, 2017, and will continue at that level until 2020, when it will drop to 26 percent. The credit will phase down to 22 percent in 2021 and officially sunset on Dec. 31, 2021. The 10 percent commercial investment tax credit will remain static through Dec. 31, 2021.

The credits were established in 2009 and were discontinued on Dec. 31, 2016, when Congress extended the credits for the wind and solar industries but failed to extend them for the geothermal industry.

John Thomas, president and CEO, WaterFurnace, visited Washington five times last year alongside the Geothermal Exchange Organization (GEO), lobbying on behalf of an extension. While meeting with a member of Congress, Thomas relayed a telling experience to the conference’s attendees from the main stage.

“John, you’re in here explaining that there’s 15,000 to 20,000 jobs at risk, the industry is down significantly, and we understand the lack of parity with the wind and solar industries,” said Thomas, repeating the congressman’s words. “But what has the industry done over the last eight years to drive the adoption of the geothermal industry without tax incentives? Honestly, it was a quiet moment.

“Selling on the tax credit alone is most likely a mistake,” Thomas continued. “You folks built this industry well before 2009 without tax incentives. We have to get back to basics and redefine how our solution is perceived in the market.”



WaterFurnace’s leadership team researched the multiple reasons buyers may consider geothermal heat pumps and grouped them into four distinct personas: financial, technology/innovation, environmental, and comfort. Throughout the conference, the WaterFurnace team continued to stress the importance of targeting these buyers based upon their preferences.

“WaterFurnace offers branding principles and consumer education we refer to as the Reliable Renewable,” said Michael Albertson, senior vice president, WaterFurnace. “In this, we developed about 80 slides that were derived from our recent regional sales meetings. Now that we’ve broken down buyers based upon their personas, you can focus those 80 slides into four or five slides that make the most sense.”

The Reliable Renewable tagline communicates that WaterFurnace offers a renewable energy that is uniquely able to provide benefits 24/7/365 — winter or summer, rain or shine, day or night.

“Reliable Renewable communicates many of our unique selling propositions,” said Tim Litton, director of marketing communications, WaterFurnace. “It’s memorable enough to stick in a consumer’s brain but concise enough to be passed from person to person. We’ve incorporated that message into a library of Reliable Renewable stories designed to help our dealers communicate the selling benefits during the sales process. Each slide is identified with an icon that fits with the four personas. This really helps our dealers identify the persona ... and pull together the most compelling sales messages they can.”



In an effort to shift the focus away from the economics, WaterFurnace has ramped up its messaging, tools, and training available to dealers.

WaterFurnace recently finished a three-week national television and online ad campaign designed to share geothermal’s numerous benefits with more than 30 million viewers. Piggybacking on that national campaign, the company unveiled its EZTV program — a national television advertising campaign scaled down and personalized for individual contractors and markets.

“This program allows us to customize the message to educate consumers in specific regions,” Albertson said. “One of the things that keeps bubbling to the top at sales meetings is the need to educate consumers. This is a great way for you to deliver that message personally with the backing of the WaterFurnace brand.”

One of the most attractive benefits to EZTV is that WaterFurnace is willing to match half the cost through its co-op program.

“One of our pilot EZTV contractor’s ads received more than 3.5 million impressions,” Litton said. “At a cost of $30,000, which was cut to $15,000 after our match, the price per 1,000 views was only $4.27, which is a very good rate for TV.”

WaterFurnace also created a stronger lead-nurturing program that establishes healthier opportunities and faster response times.

“Most people don’t realize how much response time impacts a lead,” Litton said. “Qualification rates are best within one minute, and that drops steadily every minute thereafter. Sixty percent of buyers will question your attentiveness if your first contact comes in less than 24 hours. Unfortunately, the average response time in this industry is 48 hours, and the average lead is only contacted 1.5 times.

“The feedback we got was that our leads were not the greatest,” continued Litton. “We recognized we had to take steps to improve those leads. We’ve revamped our system so that now, as a lead comes in, the individual receives an automatic response. Within 24 hours, a territory manager will call anyone who left a phone number. If no phone number was left, we send them the personal information of the nearest territory manager. Then, on days 15 and 30, we follow up with more information.”

WaterFurnace also updated its website, which now displays larger photographs, a more user-friendly navigation, and persistent links to the manufacturer’s savings calculator and dealer locator.



While the federal tax incentives are scheduled to eventually phase out in 2021, WaterFurnace is already focused on the future. Through the implementation of its Reliable Renewable initiative, lead-nurturing program, personalized media campaigns, and more, WaterFurnace is embracing a future that’s essentially foolproof.

“We at WaterFurnace are proud of what we do every single day,” said Dillon. “We’re proud of what we make and what we do for the environment, our families, and future generations. We want to transform the way we use energy. Our down year allowed us to step back and re-evaluate ourselves very closely. It’s time to start a renewable energy movement, and that movement starts right now.”

Publication date: 7/2/2018

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