Trade Secrets: Using tax credits to market your remodeling firm

If you have a Trade Secret you would like to share, e-mail Senior Editor Jonathan Sweet at jonathan.sweet@reedbusiness.com [1].

That's the idea behind a new environmental incentive program the company just launched that waives the company's fees associated with an environmental upgrade. BOWA will present customers with the basic, already environmentally friendly options the company offers, but if they want to upgrade BOWA will waive its profit and overhead on the change, says Larry Weinberg, CEO of the McLean, Va., firm.

For example, if clients want to change from a 14-SEER HVAC unit to a 17-SEER unit, they would only pay the labor and materials associated with the change without the normal markups.

The new program is in response to what BOWA sees as some companies taking advantage of the green label to increase profits without necessarily improving the environment.

"I don't want it to be something where we're pushing them to do something that we make more money on," Weinberg says. "To me, that wouldn't be genuine in terms of being environmentally conscious."

The program will be the focus of BOWA's spring marketing campaign. The company normally sends out a letter to its past clients every spring, and the environmental incentives will be the centerpiece of that as well as the company's newsletters, postcards and magazine ads this spring.

The incentives are also highlighted on the company's Web site (www.bowa.com [2]) and the BOWA sales team discusses it with every client, Weinberg says.

Many more clients are interested in green than they were just a few years ago, so it's a good time for incentives like this, Weinberg says.

"There were times when some of these ideas were falling on deaf ears," he says. "People know what we're talking about now."

Government estimates show that the new green tax credits could add $6 billion in new activity to the remodeling market.

With the tax credit increasing from 10 to 30 percent and the lifetime credit cap increasing from $500 to $1,500, that may be enough to get homeowners thinking about energy-efficient remodels off the fence.

That's what John Sperath, president of Blue Ribbon Residential Construction in Raleigh, N.C., hopes. He's making the new incentives the centerpiece of his new marketing campaign.

The design/build firm has already sent out an e-newsletter to 1,200 past clients and prospects highlighting the changes, and Sperath plans to promote it heavily at upcoming home shows. He also brings it up with every prospective client he talks to.

Many clients don't know about the change, so getting the message out is important, Sperath says.

"For the most part, it's new information," he says. "I think there's so much out there about all these plans that in many cases they haven't even heard about this."

While the tax credits alone probably won't be enough to convince people to remodel, it's another "tool in the toolbox," Sperath says.

"We're still getting a fair number of inquiries, but converting them into a sale is just a nightmare," he says. "All these things pile up, and each one contributes a little bit to the buying decision."

Blue Ribbon had a division that focused exclusively on the exterior envelope of the home but had moved away from that in recent years. Sperath says the new tax credits are a good opportunity to get that up and running again.