After a grueling 11 months of litigation, the settlement regarding the collapse of the South Champlain tower in Miami on June 24th, 2021 amounted to nearly $1B which will be paid to the families of the deceased and the people injured in the devastating event. A little backstory: the 12-story tower built-in 1981 had faced years of scrutiny over its deteriorating condition and it was obvious it was in need of major repair. Engineers gave warnings 3 years prior and since January 2021, the building was deemed structurally unsafe. Everyone is now scratching their heads as to why it took so long to react to a warning so far in advance. Even scarier, the building next door has the same specs and it too could face the same danger in the future. Days after the tragedy, the building was demolished and the land was cleared.
Here’s a brief overview of what we will cover in this article:
The collapse of Miami’s South Champlain Tower in June of 2021
What was the result?
98 people dead, 156 missing, and a near $1B settlement
How did it happen?
Wet, unstable ground and the procrastination of structural repairs
The proceeds from the sale of the land the tower stood on will go to victims and their families
It is estimated that a perfect storm of negative physical and psychological factors played a role in destabilizing the tower. As stated above, the structural dangers of the building were known facts and it is obvious something was not addressed as soon as it should have been. It’s not uncommon for essential non-cosmetic repairs to be shuffled down on the priority list by association board members looking to stay in office. Structural repairs that improve buildings can take years to complete, a lot of money, and when finished might not even improve the visual appearance of the building. Analogous to this would be a car with a badly damaged bumper and a dying alternator, both needing repairs. The damaged bumper would be a cheaper repair and would look great when finished while the alternator would be more expensive and hardly visually noticeable when fixed. It was also mentioned that the vibration echoing from a next-door adjacent construction site had a major impact on the destabilization of the tower. Other red flags include the question of whether the building was built on wetlands with unsatisfactory soil composition. According to engineers, the tower was built on land that had been settling for some time and may not have been suitable for construction in the first place. In addition to this, there were areas reported where water could only escape through evaporation. Areas where water cannot run off pose a great danger to structure supports which need stable, dry land in order to function properly. While the event cannot be pinpointed to a single factor, a combination of irresponsibility and environmental conditions resulted in the collapse. Let’s now look at the month that followed and the rescue efforts that were made.
The month following the collapse resulted in a diary of events including the identification of bodies and external help from surrounding areas (infographic above). The number of deaths rose and donations were received with grace. Rescue teams on the ground level went to work searching under the rubble looking for survivors. Firefighters risked their own lives searching in unsafe areas, wiggling through the remains hoping to find victims under layers of concrete. Some areas were extremely dangerous due to the amount of debris or fires that blazed in the depths of the wreckage. Halfway through the process, an announcement was made to demolish the building while animal owners desperately pleaded for a delay to recover their lost pets. Sadly, the delay was not granted due to pets not being found after three rescue attempts. That was a recap of the month that followed the event. Next, we’ll talk about the settlement amount and how that number was determined.
With an initial settlement of about $83M covering the owners of the condos, a more exact amount of $997M is now being planned for distribution to the victims and their loved ones affected by this disaster. While the initial amount was quite low, the increase in amount was most likely for the release of liabilities from the parties that were given notice of the potential suit. The settlement will also be funded from the land sale proceeds.
If there is a bright side to all of this, the settlement’s conclusion will come in June and the families will receive some relief in the form of a slice of the $997M amount. Although it’s unsure as to how the amount is going to be divided up, there is uniform rejoice across families, attorneys, and even the judge himself as this comes to a close. So, what have we learned from all of this? Never ignore structural issues and ensure that they are repaired as soon as possible. Stay with us on our journey to prevent tragic events like this and visit www.dials.com to learn more about how we plan on doing so. Thanks for reading, and we’ll see you next time.
Ever wonder where your money is going when you pay your dues? What are those extra fees on your statement and are they really affecting you in a positive way? HOA board-to-homeowner transparency is key to achieving understanding between both parties on things like monthly assessments and their purpose. We should understand that not every payment out of your pocket will affect you directly, but it may have an effect on the property value as a whole.
Here’s what we’ll cover in this article and the details around them:
Methods to increase transparency in your association
Why social media might not be the solution
Annual disclosures and budget expenses
How Dials is planning to help you out with all of this
Whether you’re a board member or homeowner, we want to make sure that you’re properly equipped to ensure the best communication between everyone. From the maintenance man repairing the roof to the board members making the decisions, we believe everyone should be on the same page.
HOAs have the advantage that most board members are also homeowners meaning there isn’t much disconnect between reality and what is perceived at the ground level. Those who are not board members should be encouraged to express their concerns so that everyone can feel included. An important topic to be transparent about is how budgets are spent and why. Keep these updates short and to the point so that they are easily readable. Annual disclosure documents are used to keep everyone informed on how budgets are being spent, but you’ll also want to invite homeowners to be a part of the process if possible. Keeping homeowners in the loop is always a good idea to maintain good morale in your association. It’s easy to criticize, but difficult to express constructive criticisms, and the last thing one should have to worry about is setting up the communication methods to do so. This is where we step in– by understanding how your association collaborates we have the ability to design custom tools tailored to your communication styles which can help alleviate this pain. Something isn’t right if you’re spending more time managing your channels of communication than conveying messages, and we can help fix that. Think about the following techniques in order to improve communication in your organization.
1.) Keep an open-door policy
As a board member, you’ll want to think about encouraging openness and transparency within your organization by adopting what’s called an open door policy. This means that anyone with a concern can bring it to the table for discussion. Try holding open meetings from time to time. Open meetings are meetings that reserve a portion of the time for homeowners to express their opinions and viewpoints. Schedule them well in advance so that homeowners have time to mark them on their calendars. It’s tough to put yourself in another person’s shoes, so make sure that you’re taking the right approach when receiving criticism. The act of listening is secretly a 2-way road, listening and asking the right questions in return. A homeowner might request a band-aid solution and it’s up to you as a board member to identify the root cause of the problem. Addressing issues on their most fundamental level is a great approach to ensure sustainable solutions and adopting an open door policy can help get the process started.
2.) Address issues head-on
Board members and homeowners should keep in mind that addressing issues head-on is usually a good idea. Look into things while information is fresh and emotions are still in a heightened state. This will enable you to gain the most accurate data and it will be extremely helpful down the line. Keep a digital notebook and/or write good notes so that you can read them at a later time. If you put things on the back burner, time will ensue, memories will blur, and no action will be taken. Even if the issue is not resolved immediately, addressing it head-on is a great strategy to ensure that the best information is documented.
3.) Think twice about social media solutions
It seems that most groups today are moving to social media for things like event scheduling and data management. One might think the same could easily apply to an HOA, right? Not necessarily. There are several reasons why modern social media might not be the answer. Things like open chat rooms, public commenting, and the ability for a member to make a statement on behalf of the association could give off incorrect reflections on an association. A slight mistype or stretched truth could spark a thread of debate and argument leading to toxicity on many levels. We’ve seen it before, threads upon threads of debate and nasty comments flung back and forth between people who have no idea what they’re talking about in the first place. Here at Dials, we recognize HOA discussions are more of a private matter and are looking into increasing transparency within the association. With features like one-to-one messaging systems, private group chats, and individual profile creation, we’re helping you discuss problems not only at the association level but at the individual level as well.
4.) Go Digital
We understand that transitioning from a traditional way of doing things to a more updated workflow can be a bit daunting. Whether you do this with Dials or elsewhere, this is the way of the future, and the earlier you adopt this, the better off you’ll be. Think about entering all your paperwork into a digital system so that you can access it more easily in the future. While the digital age seems like it’s been here for a while, many companies are still doing things the old way and are just now catching on, so you’re definitely not behind! There’s still time to get ahead of the curve, so check out Dials HOA management software at www.dials.com/ if you’re looking to go digital.
After significant research, Dials has identified several areas where HOA management processes can be made more efficient. The usage of multiple platforms, manual documentation, and multi-tab excel spreadsheets (we believe) should be a thing of the past and it’s time for an all-in-one solution. Our goal is to put you, a board member, in a position of oversight so that you can solve the more important issues. Repetitive tasks like dues collection and maintenance tracking can be set on autopilot while you can sit back and watch it all work with minimal intervention. Follow us on our journey to revolutionize this space and keep up with our blogs for more information.
It’s a section of law that specifically regulates California’s community associations
Who does it apply to?
All forms of common interest developments in California
Why is it so important?
It protects the homes of millions of Californians served by associations
This article will explain in detail what the Davis Stirling Act is and how it manages your association. We’ll get into the history and why it even exists in the first place. Education is important here at Dials and we’re constantly trying to make your life easier whether you’re an HOA board member or a homeowner trying to understand how all of this works. It’s good to be informed on how your association works and this article outlines why the board makes the decisions it does.
Let’s look at the history of how the Davis Stirling Act came into effect. In the 1950s and 1960s, the explosion of single-family homes led to a shortage of quality land (and land in general), resulting in a different approach when constructing living units. The approach taken was to create higher-density living spaces on land that was previously classified as unsuitable for housing due to quality or distance away from cities. The result of this was the creation of common area structures in the form of apartments and condominiums which needed to be maintained with more specific measures. As the ’80s crept in and construction continued, the major limitations in California laws became evident and left HOAs poorly maintained, planned, and weakly regulated. The existing laws were soon identified as not suitable for such high growth. A committee got together and designed a more specific rulebook for such developments resulting in the creation of the Davis Stirling Act of 1985. Now that we understand the reason behind the formation of the Davis Stirling Act, let’s look at some of the terms often used in HOA management and what they mean.
Here are some terms you’ll want to familiarize yourself with as a person who owns a condo or a unit in a Planned Unit Development.
A portion of the California Civil Code that governs condominiums, cooperatives, and planned unit development communities in California.
Standing for Covenants, Conditions, and Restrictions, CC&Rs are used by many common interest developments to regulate the use, appearance, and maintenance of a property.
Common interest development
A form of real estate where each homeowner holds exclusive rights to portions of the property (i.e. a unit) and shared ownership to other portions of the property (Eg. a community pool, elevators, stairs, fire safety systems, etc.).
Board members are responsible for making decisions regarding various aspects of their HOA and then communicating these decisions to homeowners. Board member roles include president, treasurer, and secretary. In most cases, a board member is also a homeowner in the association.
Assessment fees are payments made by homeowners intended to cover expenses the HOA is responsible for. Examples of these expenses would include lawn care, pool maintenance, elevator servicing, roof repair, etc., depending on what constitutes common areas for that HOA.
Now that you’re aware of some of the terms used, let’s talk about maintenance and repairs that will inevitably come up. In general, the association is responsible for repairing and maintaining the common areas. At the end of each fiscal year, the board decides the budget for the upcoming year. Fees are then collected from the homeowners in the form of assessments. For non-common areas such as units, homeowners are responsible for the repairs and general maintenance. This was a general overview of who takes responsibility for which repairs in an association. Let’s take a closer look at how they are paid for.
Repairs can come in all shapes and sizes and of course, prices. The Davis Stirling Act requires HOAs to follow all defined measures outlined in the bill regarding assessments. Assessments are commonly set at the start of each year and are reviewed annually. Upon HOA’s board approval, assessments can be increased with some limitations outlined in the act. Another type of assessment is created to cover unexpected urgent repairs. This type of assessment is called a special assessment. Determining the amount owed by each unit via excel sheets which no one fully understands is both cumbersome and prone to errors. This is where you can count on Dials– it’s our mission to help streamline this process and ensure that your fees are calculated more easily and accurately. We accept this challenge with grace the same way you’ve taken on the responsibility of being a board member of an HOA. Assessments help maintain the value of your property and the integrity of your common areas, so be sure to think of Dials the next time you’re doing your bookkeeping.
Assessments among other things need to be documented every year in the form of annual budget reports. Distributed 30-90 days before the end of the fiscal year, these reports need to include various documentation. A thorough outline of all documentation required can be found in article 7 section 5300 of the Davis Stirling Act, but to save you some time we’ve put together a comprehensive checklist for you below:
Also, here’s a link to the Document disclosure summary form in case you were wondering where to find it. We hope this was helpful to get you going on annual reports.
We realize board members are volunteers and take on this responsibility for the good of their community. We want our user experience to reflect the same type of care and kindness. Our goal is to enable you to easily implement these complicated legislations and confusing rulebooks. Dials HOA software is designed to handle repetitive tasks for you so you can focus on the more important topics. Stay tuned for more while we continue to ship features for people just like you. Visit us at www.dials.com and sign up for our mailing list so we can get you onboard asap. See you there!
By January 1, 2025, the California legislature is requiring all associations to conduct inspections of exterior elevated elements to determine their safety. This applies to all condominium projects with more than three units in a building. In summary, the bill requires that board members of these associations do the following:
Hire a qualified structural engineer or architect to perform an inspection on your building
Present the inspectors report to the HOA board members
Plan and prepare a budget for any future repairs upon this inspection
Let’s take a look at why this bill was passed and some of the details.
On August 30th, 2019 the governor of California approved senate bill no. 326 also known as the “Balcony Bill” requiring inspection of outdoor condominium balconies and other elevated structures to ensure the safety and durability of their condition. The bill aims to protect residents and property owners from disasters in old and young buildings. In January 2020, the bill went into effect after a history of collapsed structures resulting in injury and death. The bill presents an instruction to request inspection, test, and outline a report for HOA approval. While there are gray areas to what gets inspected and how deep to go, the aim is to do a more thorough investigation in contrast to just a general visual inspection. This involves cutting materials open and looking for signs of degradation through what’s called “destructive testing”. It’s not an easy job and requires the expertise of either a structural engineer or an architect to get the job done.
It’s not possible (nor practical) to inspect everything out there, so the bill defines several parameters that consider whether or not these structures fall under the scope of needing inspection. It’s not just balconies that are under the microscope: decks, elevated walkways, railings, and stairways also need the same attention. The elements can be rough and while California’s seasonal changes are relatively mild, outdoor wooden elevated structures are prone to degradation. Given time and the right conditions, mother nature can turn wood into mush and needs to be checked with an acute eye to make sure things are holding up. Excluded from the above-mentioned structures are faux balconies, reinforced concrete, steel rooftops, and terrace decks as these do not pose the same human hazards.
Coordination between structural engineers and HOAs is needed to make repairs to any structure. Before repairs can be made, the Balcony Bill outlines a 2 step process of inspection and review for approval. The initial site visit (Step 1) is where the engineer walks through the site and lists out areas that are exposed. After this, the HOA needs to approve the inspection in order for step 2 to begin. Once step 2 begins, the exposed areas are further inspected through destructive testing, and suggestions as to whether or not these items need to be replaced are noted. After this, the HOA does a review and if an agreement is made to repair, it officially becomes a “project”. After this, the HOAs would need to find a contractor to carry out the recommended repairs.
“At least once every nine years, the board of an association of a condominium project shall cause a reasonably competent and diligent visual inspection to be conducted by a licensed structural engineer or architect of a random and statistically significant sample of exterior elevated elements for which the association has maintenance or repair responsibility.”
You’re in a building with 100 rooms looking for water damage underneath the carpet. The client asks, “Is there any water damage that needs to be fixed?” If you want to be absolutely certain and don’t mind spending the money, you can tear out all 100 rooms’ worth of carpet. This would be disruptive, take a long time, and cost a lot of money.
If you’re ok being less than absolutely sure, you can pull up a sample of them, say half or even 1/10th and check for damage. With a “95% confidence” measure, this means you’re sure of something with only a 1 in 20 chance of being wrong. The engineer or architect has to make the call of how much to check to hit that level of confidence. It typically does not mean they look for damage, and if some is found, they look for more. They’re checking enough that there’s only a 1 in 20 chance that they’re wrong. If there is a trend of little to no damage, fewer inspections will be done.
Money for repairs is generally collected in the form of reserves, special assessments, and loans. If by chance the HOA is less than 10 years old and structural damage is found, it could be a construction defect for which the builder may be found liable. HOAs are facing challenges due to the 2025 time crunch as to whether or not the funds can be assessed on such short notice. It won’t always be like this though– inspections will be 9 years apart from here on out, which should be easier to plan for.
It’s no fun having to pay for unexpected costs, which is why here at Dials we have designed solutions to ease the burden. With automatic payments, maintenance tracking, custom assessment creation, and a place to store all your documents, you’ll want to start thinking about upgrading your bookkeeping infrastructure. We realize that being on your HOA’s board might be your second or even third job and we want it to be your easiest one. It’s a good feeling when you have money in the bank to pay for something as soon as it happens, and we’re dedicated to making sure you experience this exact feeling. Our platform will ensure that your HOAs reserve fund stays in tip-top shape prepared for nasty urgent repairs and/or unexpected legislation that might come up in the future. With years of HOA experience, our word to you is that you prepare for things like the Balcony Bill with surety and confidence the smart way; the Dials way. Our work doesn’t stop here either– we’ve got even more planned to ensure that everyone is kept up to date on current events around your association using cutting-edge technology. Ditch the reactionary approach to paying your fees and adopt a more proactive way of budgeting with Dials HOA software so that you can spend more time enjoying your home and less time managing it.
Ratification: failed. I remember the board meeting, sometime mid-2019—before COVID—I was seated at the front table, where the meeting was about to begin, watching a group distribute mixed English- and Cantonese-language flyers opposing electric vehicles in our building. Something about danger—funny not just because the alternative is tanks of explosive gasoline under each car, but worse, the garage exhaust fan hadn’t worked for years, and the guy who’d allowed that to happen was handing out flyers. But those electric vehicles? Watch out.
We have three elevators in my building and our community is so stingy, they lived with two for years, and when that broke, one—nevermind the five-minute wait for an elevator, or packing cheek-to-jowl with 8 people every time the car came. Before the replacement, the community argued for months over who’d pay, the lower floors arguing vigorously for a reduced share of the cost, on the theory that “we only go up one floor, so shouldn’t have to pay the same as the top-floor people”. When we replace the hallway carpeting, I’ll be sure to bring my ruler, because I know the odds of getting payment are approximately zero unless it’s itemized in inches.
The real reason for flyers at the meeting? My board colleague Ryan was “stealing electricity”, plugging his Tesla into a common electrical circuit in the garage. With this crowd, that was not OK.
I’d actually seen this coming. By Spring 2019, I’d seen a dozen or so EVs in our 400-space garage, and it was clear it was going to be a thing unless sensible policy was enacted. I gave it my best shot, writing up a policy, and soliciting feedback in two community meetings. We’d started with a dead-simple flat $25/month to charge, but after a community member pointed out that plug-in hybrids, also popular, would probably use less electricity, we added another tier at $15/month. Perfect? No, but with the controlling text written in English, implementation by a two-member Cantonese office staff already overworked managing 20 employees, 400 monthly invoices and another 100 bills, and a population of 800 whose first languages included Mandarin, Cantonese, Vietnamese, even Spanish, that was as close as we were going to get.
Not everyone saw it this way; the folks in the back wanted billing by the kilowatt-hour, and barring that, a complete ban on charging. Best-case, their demands were totally impractical—thousands of dollars installing proprietary chargers and Internet access in an underground garage, in addition to recurring fees for payment processing and management software, and yet another tool nobody knows how to use, all for the sake of properly billing $400/month. And the ban? Illegal under state law. Predictably, it’s been two years and the problem remains unsolved, Ryan still charging his Tesla, happily paying $25/month because that’s what he thought was fair, looking at his use.
This two-part series will explore how common-interest communities (the legal term for homeowner’s associations, or HOAs), especially condominiums, are facilitating the transition to electric vehicles. The first part documents how several associations handled the issue; the second is more analytical, going into detail on the questions a good policy should answer.
Researching this article, I surveyed representatives from 20 HOAs across six US states (CA, DC, NJ, IN, IL, WA). A key finding: it’s still really early. Though I sampled only 20 associations, I didn’t find a single charger installed in Illinois, New Jersey, or Indiana (9/2021). The only community I’d characterize as “having their act together” EV-wise was Bowdoin Place Condominiums (Seattle, WA), a 26-unit building whose size and layout made a straightforward “direct tap” possible.
Some things to keep in mind reading the case studies:
Compliance. Is it legal? In California, where I live, state law prohibits EV bans and obligates boards to develop policy for charging.
Billing. Direct utility billing is most convenient, but may not be possible in large buildings.
Capital costs and ownership. Who owns and pays for the equipment? Let owners install their own chargers; associations should fund and retain ownership of electrical systems, especially considering major electrical upgrades may be required to accommodate charging.
Note: This is a practitioner’s account, reporting what worked for us as community members and elected policymakers. We are not attorneys and this is not legal advice.
Direct tap: Bowdoin Place Condominiums, Seattle, WA
Bowdoin Place is a two-building, 26-unit condominium development in the Fremont neighborhood (near the Troll) in Seattle, Washington. The building sits atop a small hill, with a concrete-walled ground-floor garage.
The electrical meters were in the garage, so when six unit owners wanted EV chargers, they ran six conduit lines across the garage, and split the costs.
It doesn’t get much simpler than running a wire. “Each EV charger is installed in the owners units assigned parking space”, explained John Yu, an owner at Bowdoin Place. “The electricity is directly connected to that units meter. The installation was to 6 units based on the owners request for the installation.”
A brief aside on electrical billing
Never miss a chance to keep the association out of it.
I read that a couple years ago, it’s stuck with me. Using a “direct tap” from the utility meter keeps the association out of metering and billing. You really want to stay out of metering and billing.
My condo was built in 1976 with a single meter for each of gas, electricity, and water. At some point, the decision was made to install individual electrical meters for each unit (I believe this may have been due to regulation, but I couldn’t substantiate this), forcing my association to be a “submeter operator” (we re-meter and bill for electricity).
Submetering is awful. Every two months, by law:
Our staff goes door-to-door, gathering 328 meter readings, along the way dealing with inconsistently-placed meters, multiple meter types (3/4/5 dials, different dial -> kWh factors), vacant units, and vision-impaired senior citizens who report incorrect readings
Ensure recent calibration of meters, required by the California Public Utility Commission (PUC)
Apply the right utility rate, which requires tracking enrollment in CARE and other programs, ensuring rate discounts are applied (e.g. to senior and low-income citizens) as applicable
Ensure rebates such as the California Climate Credit, are credited to individual submeter customers in a compliant way (1/328? Based on use percentage?)
Determine which taxes apply (e.g. Oakland Utility Users Tax), implement the correct calculation formulas and rates
Journal all of it into the accounting system, ensuring taxing authorities are paid timely, often by check
Issue resident invoices, and get ready for the inevitable complaints and billing disputes: “This is way too high” (it’s for two months), “I used only 18 kWh of electricity in three months” (no you didn’t), “I’m not paying this” (great)
With net metering (feeding energy back into the grid), time-of-use (different rates based on time of day), and even more taxes and assistance programs, it’s borderline impossible to stay compliant. You owe it to your association to steer clear of this.
Shared stations: Pacific Renaissance Plaza, Oakland, CA
Pacific Renaissance Plaza is a mixed-use development in Oakland, California; residential towers and a street-accessible commercial area (mall), with three floors of underground parking.
The garage is divided into a deeded  portion used by residential owners, and a public pay-to-park garage available to the public, intended for owners, employees, and customers of commercial units. Four shared chargers are available in the commercial section on a first-come, first-served basis, though charging requires both paying the normal parking fees, as well as separate payment to ChargePoint. They don’t seem too popular; two of the four were inoperable when I visited, and according to management, residents who want to charge “would need to pull a token when they use the EV chargers in public parking, and pay for parking when charging is done”.
Pacific Renaissance uses equipment from ChargePoint. The firm’s model is outright sale of chargers to businesses and real estate operators, who operate them using Chargepoint’s subscription software for billing and station management (an additional expense). This has the advantage of letting operators “choose their own adventure”: free charging (as a customer/employee perk), cost recovery, or a large, profitable operation with many chargers—it’s up to the operator.
Overall? Not impressed. One of my priorities at City Center (my community) was avoiding electrical mark-ups. It’s bad enough making people pay inflated rates for charging; forcing them to pay for charging, and then for the privilege of parking—in my own home, no less—is borderline insulting.
And then there’s the issue of regulation. Today, submetering rules (detailed above) don’t apply to EV charging, but given the California PUC‘s regulatory zeal, anything could happen, especially in homes (condos or apartments). I have a hard time imagining it being 2030 without wonderful new “regulatory innovations” such as rate caps, time-of-use requirements, or other measures. San Francisco’s Board of Supervisors already mandated 10% of spaces have chargers in commercial lots over 100 spaces, due by January 1, 2023.
Those electric vehicles—watch out. I guess the people in my building didn’t see the signs on many garages here, noting that exhaust “contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm” 😊
Not yet solved: City Center Plaza, Oakland, CA
I live here, 15 stories of residential space atop a 400-space, three-level underground garage. Unfortunately, direct taps aren’t an option as the vehicles are hundreds of feet from the meters.
Due to financial constraints (need to focus on structural and water issues), we’re tabling the project until probably 2023. Our early thoughts (many inspired by my experience in software and tech ops) are as follows:
Invest in what won’t change: I learned this from software. I don’t know what the future holds for load allocation, billing, rooftop solar, or numerous other fast-changing areas of technology. What I do know is that whatever form it takes, we’ll still need conduit, transformers, service panels, and other base infrastructure, so we can invest there without too much risk.
Phases. We’ll probably work in waves every year or two, electrifying 20-30 spaces spread out across the garage in each wave. This lets us test, learn, and refine the approach as we go, an incremental approach the Strong Towns folks would like.
Keep bills low. We don’t want residents to pay a markup on electricity, even if it means spending more upfront.
Keep it simple. There’s almost certainly some kind of communication system needed, but ideally it would be extremely simple; wired Ethernet, LoRA, etc. No patches, no software updates, no viruses, no Windows machines in the closet.
If you know of a good system for this, please leave a comment.
I came across two residential garages (one in San Francisco, another in Richmond) with a handful of shared chargers for residents. At the one in Richmond, residents can use the charger but are expected to move their car when charging is finished; at the San Francisco one (slightly higher-end), a valet moves cars to and from the charging station, managing sharing and returning cars to owner spaces when charging completes.
My friend Jared lived in an apartment without charging, relying on a nearby Supercharger (Tesla) for power. He mentioned it taking only an hour, but sometimes needed to charge multiple times in a week. He lives in a townhouse in Texas now, and is delighted to charge at home.
I manage a six-unit apartment, and when we install electric vehicle chargers (still a few years off), I’m going to run conduit directly to the chargers. If you can get away with it—the stations aren’t too far from the individual units’ breakers or panels—I would highly recommend this approach.
In Part II, we’ll survey the elements of a good policy: (1) compliance, (2) billing, and (3) capital cost allocation.
What strategies have you seen for common-interest charging, especially in multi-hundred-space residential garages? Leave us a comment.
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 “Deeded”: all common-interest ownerships (titles) have a separate interest, and a common interest. Separate is yours alone, common is owned along with other association neighbors. Your CC&Rs define whether your parking is part of your separate interest (“deeded”) or the common interest (“assigned”). Assigned parking can be moved; deeded is yours alone.
When a Midwestern Man swaps his lawn tools—take notice.
The joke is that Chicago has only two seasons—“winter and construction”—but in my native land, the suburbs, “winter and lawn care” is more like it. From the time they can stand, Midwestern children receive training in lawn tools, beginning with the humble rake, advancing progressively through leaf blowers, hedge trimmers, weed whackers, and finally, lawn mowers, the most promising taught to use chainsaws, and mulchers.
And it all ran on gas. I remember thinking what a strange choice it was when our neighbor a few doors down opted for an electric mower sometime in the mid-’90s: sure, it never needed gas, but you were forever on the lookout for the cord. But the bigger problem: it was wimpy. One stick, one dangling root, it was game over, the high-pitched sound coming to a stop.
But that choice—going electric—is a choice many of us will make soon. A confluence of factors—chiefly high-performance lithium-ion batteries—means today’s electric tools get all the upsides of electric (simplicity, reliability, safety) with none of yesterday’s performance downsides. But it won’t stop there. A cleaner grid, distributed electricity generation (rooftop- and community-scale solar, wind, and geothermal), and tougher environmental regulation have raised the odds your next water heater, car, or stove will be all-electric. A growing “electrify everything” movement advocates electric vehicles and “cutting the pipe”, preferring electrical versions of cooking, heating, drying—everything.
Despite its benefits, the road to electrification isn’t all smooth. First: heat pumps are great, but lose efficiency in cold climates, requiring high-power resistive heating that can drive bills to $400-600/month even in small apartments with inexpensive electricity. Second, we’re going to need a lot more capacity—in our homes, and in the grid. And finally, the workforce isn’t skilled for it—it’s going to take a lot more electricians than we have now to build all this, presenting one fo the biggest workforce opportunities in decades.
For some, going green is enough—but at what cost? Illinois has a long history of clean nuclear power, but that didn’t stop my childhood neighbors from avoiding electric lawn tools. The nice thing is that, today, you don’t have to choose: you get all the benefits of electric, with equivalent performance as gas.
Start with safety: who doesn’t want to get explosive, carcinogenic chemicals out of their house? As the son of a career manufacturing/factory guy, I grew tired of seeing “Caution” signs all over the house, but my dad had a point: 30 years in a factory around spot-welders and cold-rolled metal had taught him what’s actually dangerous, vs. what only appears so. Gasoline is the former—it’s dangerous. Gasoline spills onto floors, gets into rags and clothing, and evaporates into fumes that collect near the floor, waiting for the tiniest bit of static electricity to spark, incinerating your house or garage in the process. Natural gas is better, but given the chance, wouldn’t you choose to eliminate pilot lights, one more source of failure and fire? And how about a world where carbon monoxide poisoning, exhaust fumes, broken flue pipes, and leaky gas lines were a thing of the past?
And then there’s reliability. Gasoline engines are remarkable pieces of engineering—hundreds of moving parts smashing into each other to create and harness mechanical work from thousands of tiny chemical explosions. Doing this well requires oil, sparks, cam shafts, timing rods, fuel injectors, and hundreds of other small, but critical things. All the complexity of an electric vehicle is in the design and control of its power system—the battery—the motor is little more than magnets, and a conductive wire. Heating is better, but pilot lights go out and electric ignition systems fail—electric heating elements rarely do either.
And finally, the environment—electrification offers the potential to reduce direct carbon emissions from engines and appliances, sure, but what about the rest: pipelines, drilling, hydraulic fracturing, and periodic disasters (Deepwater Horizon, Exxon Valdez), all in consequence of the search for oil and gas? The good news is, at least in the United States, things are moving in the right direction, albeit slowly—a dozen coal bankruptcies in the past five years, rapid growth in utility- and rooftop-PV (solar cell) deployment, wind farms dotting the Midwest, and growing sales of electric vehicles. Over the last few years, a lot of Ford guys have ended up taking my dad’s community college class on basic electrical principles, re-skilling to be EV mechanics and assembly guys. This isn’t the future—all of this is here, now, today.
In lieu of blogging, we spent some of the past month “cutting the pipe” at @MMMHqCoworking – all electric heat pump for heating+cooling, small electric water heater, ZERO natural gas bills ever again!
The benefits are real, but getting there will be bumpy. That realization hit me one Saturday morning, when I got an angry call from Dorothy, a tenant who’d just moved in to an apartment building I own, near my parents place in Illinois. The building has been all-electric since I got it in 2019, somewhat unusual for the Chicago area, but giving me a glimpse into what’s coming.
Overall, Dorothy was great—an intelligent, reasonable woman who’d retired after a career working for the IRS—but she was quite sure her electrical bill, $700 for the month of January, was incorrect. Especially because her apartment was only 1200 square feet (110 square meters), with two interior walls, shared with the other apartments. She was doing OK—a good pension from all those years working for the federal government—but still, a $700 electrical bill would probably get anyone’s back up. Certainly mine.
I looked into it, and while $250 was initial deposit and setup fees, the rest was correct—$450 for a month of heat in her place. She insisted it was mis-wired, but I knew it wasn’t—I’d actually just hired a very competent electrician to replace every breaker and service panel in the building, who happened to be Dorothy’s next-door neighbor. After a week of back-and-forth, she finally understood a basic reality: resistive heating is expensive.
What about heat pumps? My friend Ed (the guy who asked me about SEO) had been installing these for a few years during his time in South Carolina, but couldn’t get the numbers to work in Illinois (known in HVAC circles as CZ, or “climate zone”, 5). If you don’t know, a heat pump is basically just a fancy refrigerator chiller—a machine with compressors and refrigerant for moving heat one way or the other—capable of moving heat into your house in the winter (outside -> inside), or vice versa in the summer. The issue is that, like a refrigerator, when the temperature difference gets big, two bad things happen: the refrigeration system gets less efficient—it’s harder to get the refrigerant hotter/colder than the outside (to draw heat in or out), even through the compressor is still working at 100%—even as the losses through the insulation get bigger. The result is that, in cold climates, many HVAC pros specify resistive “emergency heating” (“strip heat” is the term) for cold temperatures.
Technology is advancing rapidly; there may be a heat pump manufacturer that’s figured out how to make them efficient in very hold/cold climates. Ask a good HVAC pro, and leave a comment, I’d love to hear!
And did I mention, powering all this stuff—cars, heaters, heat pumps, water heaters, etc—is going to take a ton of power? Talk about a retrofit job; it might be time to take up a career as an electrician, or own an electrical contracting company…or a copper mine?
Interior electrical systems: as late as the ‘90s, new-construction single family homes got by on 100 amps (everything in this section assumes 240V). Today, all but the smallest cottages or tiny houses are wired for 200—and already, it isn’t enough. I’m not sure whether it will come from rooftop solar, nuclear, or a home-scale battery—probably all three based on time of day, weather, and where you are—but single-family houses will need 300-400 amps service; small apartments, 200-300. Just look at the numbers.
Start with electric vehicles: you’ll need 11 kW—that’s 60 amps of panel capacity (upsize actual continuous load by 25% from 48A to size the circuit, per code)—just to charge your Tesla. And you’ll wait an hour to add just 35 miles of range. My wife and I are city people with just one car, but a lot of suburban families in the US have two, and it seems inevitable faster chargers will hit the scene when weekend campers and skiers want to add 350 miles of range between getting home at 9pm and leaving for work the next day at 7. That’s a minimum of 120 amps. Add another 60 amps, which seems a reasonable lower bound for the usual major appliances: dryer, washing machine, dishwasher, and microwave, reaching a total of 180. Air conditioning or heating, and you’ll need another 40-50 amps, at least, especially if it’s the whole house (220-230 total).
Somewhat to my surprise, the big question mark is water heating: 20-40 amps is sufficient for a moderate-sized storage (tanked) heater, but I’m not sure whether that will become “standard”, or the efficiency (and continuous operability) benefits of tankless heaters will prevail. If tankless prevails, get ready—Rheem’s 7.1 gal/min tankless consumes a whipping 36kW—160 amps—at full production. Granted, 7.1 gallons/minute is a lot of hot water, but you’ll need it for two showers and a dishwasher. Add it up, and you’re at 400 amps to be comfortable; 500 if a tankless is in play.
Zooming out to a block / city, it’s not just higher utilization, but variance: loads are getting “chunkier”. EV charging, tankless water heaters, and other equipment will cause minute-to-minute swings of 100 amps or more, putting more strain than ever before on the grid, requiring distribution systems (substations, transmission lines) to carry more headroom everywhere—higher averages, but much higher peaks relative to previous patterns of consumption. Looking forward, it seems energy rates will have to increase as only “bad loads” end up on the grid, with utility operators moving closer to a “supplier of last resort” position, forced to cope with hard, transient loads other systems can’t take. Electricity rates have already been pushed into negative territory several times by excess supply—expect to see more of this, as distributed generation and supply become widespread.
The bottom line: as a homeowner, electrification will likely require a lot more current capacity in your home energy system—even if you don’t use all of it at the same time.
Electric vehicles in multi-unit settings
One other point: I live in a condo. We have a 400-space, three-level garage underground, and figuring out how to handle EVs has been, to put it mildly, a circus. Start with whether we should allow them at all: California’s Civil Code §4745 prohibits blanket bans, but residents already have them, and are using association (shared) power to charge. I’m on my association’s board, and last year, introduced a policy with tiered billing (explained below), only to be shot down by a faction that insisted, contrary to any evidence, that EVs are dangerous fire hazards, owing to their large lithium batteries. Nevermind that the alternative is to have gallons of explosive liquid under each car, emitting carbon monoxide every time someone pulls in and out—with exhaust fans that only began working again last year, after years of disrepair.
There’s also the issue of who pays for the electricity. Eventually apartments will need EV chargers, and I suspect that when they arrive, the most straightforward solution will be a direct tap off the unit’s meter, to the charging point. In larger buildings, as in my condominium, distance might make this impractical—I suggested flat-rate billing, with plug-in EVs paying a simple $25/month tariff, but again, couldn’t sell it to the board—the idea that one person might take a nickel more than someone else didn’t seem fair, so a year later, I’m off the board, they want to measure and bill for individual use, and nobody has put forth any practical idea for implementing any of this. Meanwhile, the anti-EV group has realized a blanket ban is illegal, and are now advocating for full outsourcing, causing residents to pay what’s likely to be a 10-20% markup on every kWh of power drawn to charge their vehicles—not ideal.
Third point: at the scale of a 400-unit garage, adding capacity for EV charging gets into transformers, and even grid operations. My building is across from a police station, meaning I haven’t had a single power outage in four years—apparently we’re part of a “network transformer” setup—nice, but also, apparently very difficult to upgrade. Once again, a problem that, if someone could solve, a great business awaits.
The same thought kept popping into my head as I wrote this—we aren’t ready. Business opportunities come from changes in the economic environment, and electrification / decarbonization is a big one. It’s easy to succeed in a growing industry, and this one is going to grow like crazy.
Start with the basics: nuts-and-bolts electrical work. Basic electrical work—service panel upgrades, new breakers, replacing broken ground rods or receptacles—will be required every time someone gets an electric vehicle, converts a gas furnace to a heat pump, or switches from a gas to electric stove. Most of this work will be like dentistry: not unduly complex or high-end, just needing to get done in an affordable, workmanlike manner. I find appliances particularly interesting. Today, most appliances stores don’t bundle electrical, permitting, and design. Replacing like-for-like (e.g. ordering a new refrigerator) is one thing—but converting a furnace to a heat pump is quite another. Doing that requires a blend of design, permitting, and multi-trade coordination (electrical, plumbing, HVAC) not unlike Best Buy’s “Geek Squad”. I don’t know who’s going to own this space, but someone will arise to fill this need.
And finally, how we charge EVs presents a ton of opportunities. Again, there will be product companies that make the chargers and panels, but what’s really needed is a single vendor that blends design/specification, compliance/permitting, and contracted installation, with specialty practice areas for strip centers, apartments, and even condos. As a building owner, I want to ensure I’m getting a solution that works as a unit, in the exact circumstances of my building (including government regulation and grid connection), which requires design services, permitting, and even working with the local utility to ensure enough capacity is available.
It’s an exciting time. A lot of things will change and I think what results will be a cleaner, safer, and more environmentally sound world.
I’d particularly like to know:
Do you own / manage a condo or multi-unit building? How are you handling EV charging?
Do heat pumps work in your area? What exact make/model/brand are you using?
What do you see as the greatest challenge to electrification? Greatest opportunity?
We’re Dials, the system of record for maintenance. We help owners and managers of condos, apartments, and other large buildings see the whole picture—inventory, maintenance records, activity, and anticipated expenses. Learn more
In addition to Dials, I run the project committee at my condo, a 348-unit high-rise called City Center Plaza. As head of the committee, I oversee capital planning, the process of allocating our limited reserve funds toward the highest-impact projects, as well as advising the treasurer on how much funding we need budgeted for future projects.
It’s a big job, and a decade of neglect has left things in rough shape (shocker). Take a look at our reserve study (above): 22 past-due projects costing more than $1.5 million. Naturally, money we don’t have, though with $800k in the bank, we are working it down; it’s a lot better than when I moved in, four years ago, with $400k off the books owed to vendors, and $50k in the bank. But that $800k is peanuts next to $5-10 million in deferred maintenance. And sadly, our condition is the norm: 70% of associations are underfunded, according to Buildium. If you can believe it, the board of the collapsed building in Florida was better than most—they had a plan, outlined in a letter urging homeowners to approve a $15 million plan of remediation. But with nothing saved, and a shortfall of $80-300k per unit, the die was cast. Accumulating that kind of funding is the project of a decade–maybe two–not a year.
And so you have it: the HOA Financial Crisis. 45,000 communities in California alone, with deficits of thousands, even tens of thousands, per unit. “American Local Governance in a Nutshell”, as Strong Towns describes it, situated in a broader crisis of disrepair affecting everything from dams, to bridges and space observatories.
No single person has the power to cause a problem of this scale. The HOA Financial Crisis is a product of broken feedback loops, bad incentives, and failed accounting/measurement systems. The good news is, recent advances in sensing and perception have made it inevitable that repair and maintenance will factor into price.
If you what to see how, read on.
Root problem: good capital planning doesn’t affect price
Capital planning is the set of activities ensuring a building stays in good shape long-term: keeping inventory, developing a plan, and carrying out the plan, including accumulating funds, and spending them on the highest-impact projects. Today, the quality of this process—how well a building is kept and the state of its reserves—doesn’t meaningfully influence price.
It should. I was surprised Wells Fargo’s quoted rate included a 0.25% premium on my condo loan, but they might have the right idea. Apart from the borrower’s ability to pay, the #1 thing mortgage lenders care about is not lending too much—on a $500,000 property, a conventional 20% down mortgage leaves $100,000 of buffer (the buyer’s equity) that all but eliminates the bank’s chances of loss. But crazy things happen—like Champlain Towers, where the board’s power to assess might result in a $150,000 lien on the unit, making that $500,000 property unsellable above $350,000 (assuming the seller has to clear the $150k assessment lien). That’s a $50,000 write-down for a lender, which given typical mortgage underwriting margins, is catastrophic.
It’s even worse for insurance: want to be first in line for losses when a caved-in roof causes tens of thousands in equipment damage? No, obviously.
Want to see fireworks? Tell a community their property prices are falling because buyers can’t get loans (banks won’t touch a place), or worse, the board can’t find insurance—all of a sudden, a lot more residents are going to show up, and board meetings will be a lot less dull.
So where’s the data?
It all starts with inventory. What’s in the building? Where’s the master list of pumps, pipes, and elevators, along with dates of installation, service, inspections, and which vendor did all of it?
Without inventory, there’s no way to know whether a project plan is realistic, how much funding should be set aside, or what’s most important to service next. It all starts from inventory. Typically, a couple things go wrong.
First, reserve studies aren’t good enough; reserve analysts are great at estimating component lifetimes and usually have project cost databases, but an analyst’s list assembled in half a day will never be as thorough as something done bit-by-bit over time by a diligent manager (especially onsite). Let the expert (reserve analyst) do the expert’s job (assessing lifetime)—it’s best if the association brings its own list.
Second, the association must own this data, and the system that houses it; vendors come and go, as well as managers, and boards. Inventory, repair, and maintenance data must be handled like accounting records—think Quickbooks—placed in a special system with custom-built permanent storage, with proper access controls and multi-user functionality. Ideally, a field-ready mobile application, that works even in the basement and has your entire complement (potentially dozens) of vendors able to log in and record work.
And third, entering inventory is a hassle. Making data entry as easy as possible, or even eliminating it altogether, is a long-term goal for Dials.
And how do we ensure it’s fresh?
Simple: solve someone’s problem.
Associations need better planning tools, and reminders to keep things updated. Over the next couple of months, we’re going to build the best set of capital planning tools out there, that will be fun to use, and help associations stay on track with their goals.
Using your inventory data, we’ll help you create a project plan, calculate how much you need to fund it, and guide you toward hitting your savings and operations goals.
If we can help even one association budget better, it will be worth it for us. If you want to level up, sign up for updates as we build (below) or try us out at dials.com.
“Do you know anything about SEO?” my friend Ed asked, a few weeks ago.
Growing up five houses apart, Ed and I did a lot of stuff together as kids. Our parents took us to Wisconsin Dells together for vacation once. And when my dad needed an addition put on our house, Ed’s dad, a general contractor, was the first guy he called. We drifted apart into high school and even college, him heading to the military, me to Silicon Valley, but we both ended up as copies of our fathers–him in the trades, me, an engineer.
So you could imagine how I felt when, out of the blue, an email popped into my inbox with the subject “957-2591”–my childhood landline number–we hadn’t talked in ten years, but Ed knew it would get my attention. After the military, he looked up “the occupational category with the best growth prospects”, and settled on HVAC/R. He was operating as a one-man band, under the name Apex Heating and Cooling.
I guess Ed figured I’d know about SEO because I’d always been a “computer guy”, trashing our first one at 5 (I guess that COMMAND.COM file was important?) But after about five minutes talking to him, I realized he wasn’t curious about SEO so much as the larger question of, How do I market my business online?
And truthfully, I wasn’t the worst person to ask: I’d run a contract development shop, and had some modest success building Internet businesses. I’d also been a pretty substantial buyer of building services, managing 12 rentals (including a 20,000 square foot commercial strip center) and running capital projects at CCP, my 800-person Oakland Chinatown condo.
I got the brain dump on heat pumps and blower door tests, he got the inside scoop on organic traffic acquisition, and pretentious hipster coffeeshops.
Start with the customer
The first step for any craftsperson who wants to succeed in business: make it about the customer.
This is hard.
In the United States, especially among highly skilled people, work is more than a 9 to 5; it’s an identity. It starts when we’re kids, watching our parents work–my friend Matt becoming a sales rep like his mom, my friend Ed following his father into the trades. College majors and apprenticeship further reinforce these identities. And after training, our vendor relationships, guilds (professional societies, unions), even friendships and clothing, signals our occupation.
When someone asks, “What do you do”, the expected response is, “I am an electrician”, not “I trained as an electrician” or “I’m working as an electrician”–our occupations aren’t work, they become who we are.
Here’s why that’s a problem:
You can have everything in life you want, if you will just help other people get what they want. – Zig Ziglar
When you’re so wrapped up in yourself–your tools, your craft, your jargon–it’s hard to empathize with others. Even when those “others” are your customers.
Maybe it’s time to think less about intermediate metal conduit vs. EMT, and more about doing the job to an acceptable level of quality, as quickly and cheaply as possible.
Maybe it’s less important whether you’re using the newest scroll compressor, and more important what it will do for the customer–the benefit–more comfort in their homes, and lower energy bills.
Maybe your union or bar association membership isn’t that important. Don’t do anything illegal or unsafe. Beyond that, give the customer what they’re asking for.
It’s not about what you want. You aren’t the client. Your job is to serve the client as best you can.
Once you get serious about serving the customer, you’ll start to understand how they buy–their purchase journey. “Big” purchases–lots of money, complicated requirements–happen in stages, one after another. Sales and marketing professionals, offline but especially on the Internet, call this step-by-step process a “purchase funnel”, or just “funnel”.
Let’s consider the purchase funnel for a home air conditioning system. Even a “straightforward” purchase like this has at least seven steps. In reverse order:
Delivery: The system is installed, the customer is invoiced, and payment is made.
Acceptance: The contract for the job is accepted (signed).
Offer: The customer receives 1 or more offers to do the job.
Quote request: The customer asks the vendor for a quote (proposal), which may involve a site visit.
Qualification: The customer and vendor “qualify” each other–does the vendor do the kind of work the customer wants? Is the price in the customer’s range? For contractors, this is usually a phone call.
Discovery: The customer “looks around” for a vendor–the get a referral (friend, family, other people they trust), look online (Yelp, Angie’s List, Google, etc), or even respond to an offline ad (park bench, bus, postcard, newspaper ad).
Awareness: The customer becomes aware of the need for a new system, often via a “compelling event”–jealousy after visiting a neighbor of friend’s very comfortable house, hearing they can save a lot of money with a new system, or what they have breaks. Something leads them to take action.
Generating business is less mysterious when the purchase funnel is mapped. And here’s the thing about the Internet: you can measure everything. In addition to receiving an overall increasing share of time and attention, precise measurement is a big reason so much ad spending has moved online.
Conventionally, marketing’s job is to generate leads, while sales, by hook or crook, converts leads into sales (money). Put differently, marketing creates demand–largely through communication that is specific and targeted–while sales takes the lead and “finishes the job”; the exact split is highly dependent on the business.
The value of a lead
So, where do leads come from? That depends what they’re worth, which depends on your business. But first, a quick aside: conversation rates.
A conversion rate is the number of people at one funnel stage, that proceed to the next. Simple example: if 100 people look at your website and 1 calls you, that’s a 1% conversion rate. Note that doesn’t mean the person will necessarily buy anything–only that they’ve taken one step forward.
In order to determine a lead’s value, you calculate the value of a sale (the net profit), and work backwards through your funnel. Here’s a typical example, working backwards through the seven-stage funnel above:
Ed’s typical residential air conditioner installation job is $20,000. After expenses, he earns about $4,000 on this job–his profit. (Note: the number we care about here is profit, not revenue. I’ll revisit this point later.)
Ed aims to win about 50% of the proposals he writes — he’s not desperate for business, but also not out to gouge people or waste time bidding work he’ll never get. Ed’s 50% win rate means a submitted, serious proposal is worth about $2,000 (50% x $4,000).
Ed always answers the phone, but about half the people who call him live out of his service area, need service right away (he’s booked for the next 2-3 weeks), or want a product he doesn’t sell (50% conversion rate). That means an unqualified lead (call) is worth about $1,000 (50% x $2,000).
About 5% of the people who view Ed’s website call him. That makes a visit to his site worth $50 (5% x $1,000). Note: 5% view-to-call conversion means Ed’s site is pretty good.
Let that sink in for a minute — statistically speaking, a single website visitor is worth $50 in profit.
Does that seem like a lot? On one hand, it’s $50 in profit, just for getting someone to view your site–that’s a lot of money! On the other hand, if you’re new to this, you’ll be surprised how much money you can spend while generating absolutely no business. Start slowly and measure everything.
Another thing, the example above assumes you’re doing only one sale with a customer, when more often than not, you’ll end up doing repeat business over a longer relationship. This is especially true in local services — marketers call this stickiness — one satisfied roofing customer might generate dozens of high-quality roofing leads as you become “the guy” for his entire block, church, and extended family. On the other hand, if years pass between sales, the customer might “churn out” and need to be re-acquired (they behave more like a new customer).
The bottom line: the math gets a bit fuzzy and it’s best to think in ranges. If your profit per lead is $50, don’t worry about spending $2 vs $3. Worry about spending $50, or $100, or $200–there be dragons–you might recover it over the length of the relationship, but you’ll get in too deep a hole that you’ll run out of money before you make it back. Aim to spend no more than 20% of the yearly profit to acquire a customer.
And finally, keep in mind you don’t have to be perfect, just better than the competition.
How to spend it
So, assuming our $50-of-profit customer above, how do you spend (deploy) money to get good, hungry, well-qualified leads?
Perhaps surprisingly, my overall view on lead generation is that it resembles the rent vs own decision for where to live. Like shelter for people, brand awareness and traffic are a matter of survival for your business. And ultimately–remember I said to focus on your customers–traffic and engagement on the Internet, whether Instagram likes, page views on facebook or the web, whatever–come from an audience. I like the term “audience” as it connotes a group of people who watch, or pay attention, to what you do. This is a good way to think about work in 2020.
Audiences can be either owned or rented. Like housing, there are some general guidelines, but the right choice depends a lot on you.
Renting an audience basically boils down to: pay a major Internet platform to promote your content. The platform might be facebook, Google, Youtube, Pinterest, or something else, but the basic mechanic is: you pay them for eyeballs. You’ll get results more quickly, but promotion is priced by auction, so your cost to acquire a customer generally won’t ever go down. You can also find someone who’s built a community (subscription newsletter, blog, facebook group, etc) and ask them to run your ad.
If, on the other hand, you’re in it for the long haul, you need to own your audience. “Owning your audience” means you have a direct relationship with your customers, that isn’t mediated by Google, facebook, or any other platform. A good rule of thumb: if you have their email address, you’re doing well. By moving the conversation off of the big tech platforms, or at least making it so that people search you out, you can drive your cost per lead down, and the quality and brand trust of the leads you do get, up. Here’s a few ideas:
Show your work. Use Dials. One of the best parts about building a new software product is getting to study a problem, and building the exact solution someone needs. Contractors are visual people who love taking and sharing photos of their work. Dials helps you build your brand with zero effort by ensuring jobsite photos are placed onto the right social feeds, maximizing the exposure–attention, mindshare, and leads–you get, without spending money on promotion. We have great features to log and plan your work, and great prices starting at free. What are you waiting for?
Join the right referral networks. Contact people in your area who do the same kind of work you do, and let them know you’ll take any work they don’t want. This is especially effective for smaller contractors, who are happy to take on smaller jobs the larger guys don’t want.
Explain things on the Internet. My dad can spend hours watching videos about conduit, roofing types, or HVAC blower-door tests. Whether it’s a blog, video series, or subscription email list, people who explain contracting topics well (e.g. galvanized vs. copper pipe) will get a never-ending stream of well-qualified leads, with tons of brand trust from the first call. Do it.
Ensure people can find you. Make sure your pages on facebook, Google My Business, and Yelp are up-to-date. Ask for reviews when you do work.
One important axiom of Internet marketing: Good content production is frequent. Aim for a mix of high-authority evergreen articles and videos (will remain relevant for many years), plus smaller, more frequent stuff to ensure you stay top of mind. Again, using Dials can really help – we let you share photos of your work directly to your social profiles, ensuring a constant stream of authentic, original, new stuff. That plays really well on the Internet, and social media.
In the long run, marketing is all about driving a well-qualified stream of leads to your business. In order to do that, a company or brand must use consistent, targeted communication, and get it in front of the right people, to earn trust, mindshare, and ultimately, business.
“Audiences” are a great metaphor for customer groups on the Internet. It’s usually smart to test the waters, gauge interest, and experiment a little with a rented audience. Once you’ve started to find what resonates, invest the time and money into building your own. Building an audience is neither fast nor easy, but it’s the only way to get off the Google/facebook treadmill, and build a long-term competitive advantage in acquiring customers. Otherwise, you’re just bidding against the guy across town for traffic, and lining Google’s pockets in the process.
To medical professionals, “charting” is like flossing one’s teeth: tedious, and easy to skip. But invariably, something you’ll regret not having done.
As a clinical dietitian, my mom was careful to chart each patient’s progress–how much weight they’d (hopefully) lost or gained, what seemed to be working, where improvement was needed. My dad was home pretty reliably by 5:30 or 6, but not my mom, who’d sometimes see eight patients back-to-back, with barely time for lunch, let alone charting. But she made time for it, somehow, obligated by either professional standards, or human concern for her patients.
Despite charting’s critical importance to long-term care, any medical professional will be happy to tell you how often it’s skipped. Fee-for-service medicine emphasizes appointments and procedures, not record-keeping and follow-up. Through I’m sure she rarely worked less than full-time, my mother spent most of her career as a benefit-free part-time employee, never properly compensated (in my view) for her diligence, or attention to patient needs.
I think of my mom often as I work on dials. The maintenance professionals who use our products are “building doctors”, and we’re giving them the tools to automate “charting” — gathering data — so that they can bill more work, spend less time on unpaid record-keeping, and get home to their families. Preferably, before it gets dark.