Selling a “Free” Upgrade Funded by OBF


In some utility territories, energy efficiency products are eligible for on-bill financing (typically abbreviated as “OBF”) that is made available by the local utility company. The arrangement is quite simple: instead of paying an unnecessarily high power bill, the customer has the utility pay the first cost for an energy solution that lowers that bill, only to have the “savings” each month reapplied to cover the principal and interest payments that fully amortize that “loan” over time. Done correctly, the monthly bill goes down by the same amount (or more) than the monthly debt service needed to repay that first cost. Once the first cost is completely repaid, the customer captures the delta between the pre-upgrade monthly bill and the post-upgrade monthly bill.   (By the way, in territories where OBF doesn’t yet exist, there are plenty of third-party lenders who are willing to advance capital to potential customers of energy upgrades using a variant of this approach.) 

If this type of financing is available in your territory for your product, try this pitch when talking to your next sales prospect: 

“Frankly, if you don’t buy this product, you’re going to pay for it anyway.” 

Allow a pause for your prospect to ask what you mean, then explain: 

“You’re going to pay your utility bill each month for the rest of the year (and next year and the following year, for that matter) regardless of the decision you make today. If you choose not to buy our product using the OBF plan, you’ll continue paying your bill, and at the end of the year you won’t have a new lighting system. If you go with the OBF option, you’ll continue paying the same bill you have been paying, except that part of it (the savings portion) will be repurposed to pay debt service for brand-new equipment, and after that “loan” is completely repaid by that savings stream, the savings thereafter will be yours to keep. If you choose not to proceed with this OBF approach, you will have paid the same amount each month as if you had done OBF, except at the end of the year you’ll have nothing to show for those payments (except the pride of having paid your monthly utility bills on time).” 

Another way I often reframe this: Would you ever visit a car dealership and walk off the lot committing to pay the monthly payments but forgetting to take the car home?   That’s essentially the equivalent of continuing to pay your unnecessarily high monthly utility payments when you could have repurposed a portion of that same amount each month to finance an energy upgrade that would not only lower your bills in the long run, but also provide additional comfort and convenience to your building’s occupants starting from the time the new equipment is installed (think better lighting quality, improved thermal comfort, etc.). 

Remember, people don’t make decisions; they make comparisons. 

You’re likely familiar with the Snicker’s commercials where a hungry person is depicted as a notoriously ill-tempered celebrity, until that person eats a Snicker’s bar and is restored to normal. That’s a humorous version of the comparison concept: Show the client what will happen if they don’t buy your product, and the negative results will illustrate your product’s value. 

If you don’t eat a Snicker’s bar, you’ll turn into Joe Pesci. If you don’t use OBF, you won’t have all the benefits of our energy-efficient product, but you will have paid the same amount anyway. This approach is a great way to shake the Etch-a-Sketch® and help your prospect draw a new picture of success.

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By (Mark Jewell, President of Selling Energy | | | communication, financials, prospecting, sales professionalism, sales tips |
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