Sometimes in marketing, timing is everything.
A failed Kansas weatherization program created to oversee millions of dollars in loans for middle-class residents spent $500,000 for advertising during its first year.
But the advertising campaign, which ended in 2010, generated only 15 loans.
The reason: It was just too difficult in the first year to get a loan.
Loans could only be obtained from banks, which required second mortgages and excellent credit ratings to receive a 4 percent interest rate loan.
By the time utilities were allowed to begin providing interest-free loans with easier credit ratings, the campaign was over and the Efficiency Kansas weatherization program was just months from being dismantled.
Jesse Borjon of the Kansas Corporation Commission, the umbrella state agency that oversees Efficiency Kansas, said a significant part of the marketing campaign targeted banks through “partner recruitment.”
“Whether customers could take advantage of the loan through their utility did not mean they could not take advantage of the attractive interest rate from partner banks,” Borjon said.
He acknowledged, however, that many people did find it difficult to get a bank loan.
Critics say the half-million dollars for marketing was a waste because the campaign was conducted and finished before potential borrowers had access to the zero-interest loans from utilities.
“It seems (the program) was bungled from the first,” said Scott Allegrucci, a Kansas environmentalist.
The $32 million stimulus program was announced by then-Gov. Mark Parkinson in November 2009. But when Gov. Sam Brownback came into office this year, he shifted $20 million from the revolving loan fund to two ethanol industry organizations, citing the few loans that had been made.
Originally, the state projected that through the weatherization program:
• More than 5,500 loans to homeowners and small businesses would be made over three years — two-thirds through utilities and one-third through banks.
• 1,150 jobs would be created or retained.
Trozzolo, a Kansas City public relations firm, spent six months developing the logo and branding for Efficiency Kansas, Borjon said. Then it set up a series of meetings across the state where the state’s energy division presented the program to the banks to recruit partners.
“This effort resulted in over 100 partner bank locations across Kansas,” Borjon said.
But only 15 loans were made.
When the Kansas City, Kan., Board of Public Utilities finally received permission to provide loans in December last year, and Westar received clearance in February, the number of loans made picked up dramatically, even without a major advertising campaign.
By July, when the program’s doors were shuttered by Brownback, almost 600 loans had been made, worth almost $5 million.
But even with the program sputtering and the decision looming to end it, the state sent two people to San Francisco for two nights in April at a cost of $4,800 to an energy conference.
Borjon said, though, that the trip was a bargain.
The two Efficiency Kansas workers were able to identify areas of increased effectiveness in the program and potential opportunities for additional funding sources, he said.
They also met with peers in other states to see how those programs were succeeding and how to continue them when federal funding ended, he said.