To improve your water heater's efficiency, regularly flush the tank to remove sediment buildup, which can reduce heating efficiency. Insulate the tank and pipes to minimize heat loss. Set the thermostat to 120°F to save energy while ensuring sufficient hot water. Additionally, check and replace the anode rod every few years to prevent corrosion. Consider installing low-flow fixtures to reduce hot water demand. Regular maintenance and timely repairs can also enhance the overall performance and lifespan of your water heater.