The Keys to Marketing Green - Part 2
In the first part of this series (CSE 05/07, p.29), I explained that there is no single competitive response to the growing green building market that is right for every design firm. Nevertheless, I proposed seven keys to successful green marketing, and I outlined the first three: In this second installment, I will continue with a discussion of the remaining keys.
In the first part of this series (CSE 05/07, p.29), I explained that there is no single competitive response to the growing green building market that is right for every design firm. Nevertheless, I proposed seven keys to successful green marketing, and I outlined the first three:
Choose competitive targets
Position your company as a leader.
In this second installment, I will continue with a discussion of the remaining keys.
4. Differentiate your green development offerings. Differentiation is a marketing approach that takes decisions regarding segmentation, targeting and positioning variables and focuses them on particular markets. This approach must be coupled with a specific project type, owner type, geographic or other focus. Focused differentiation is the main approach used in professional services, and the main green building differentiators for engineering firms include:
High levels of LEED project attainment
Demonstrated ability to deliver green building projects on conventional budgets
High number of LEED Accredited Professionals, or percentage of total staff as LEED APs.
An engineering firm needs to show high levels of attainment on several of these key variables.
Five of the top 10 differentiation activities for professional service firms are most often used by engineering firms to assist with their green building marketing efforts:
Advertising campaigns to establish or maintain positioning, done in less than 20% of the firms, according to a 2006 survey.
Improved relationship management programs to strengthen bonds with current clients; this is by far the most common, cheapest and fastest way to get results, in my experience.
Manage a public relations campaign to highlight achievements and reinforce green market positioning.
Hire specialized individuals, often with control of key relationships, which is done in less than 25% firms, according to the survey.
Improve or evolve the company's current services, particularly in setting up a separate green building consulting division.
Research shows that the leading firms are particularly adept at using differentiation strategies such as advertising, public relations, new visual identities and attracting key people. Improving or evolving the company's services typically takes place over the course of several green projects.
When embarking on a program of focused differentiation, remember that existing clients already know your firm and appreciate its strengths. Communicating a new message about green building should not be at the expense of these relationships and needs to reinforce current perceptions of your firm as a cost-conscious, schedule-conscious, client-focused organization. Key relationship managers need to be detailed to meet with existing clients and explain how the new people you're hiring, the newly accredited LEED APs and the new green building focus of the firm will benefit clients and their projects. In turn, this requirement implies a need for strong internal communications before embarking on new green building marketing initiatives.
5. Become a low-cost provider of green design services. Given the tight budgets of many building projects and competitive environment in most urban areas, the ability to compete on price is a valuable asset. These costs may be based on prior project experience, accurate product knowledge, research, local or state incentives or a willingness to pay to get the experience. Low cost of operations does not necessarily mean low profitability; instead, it gives a firm more flexibility to negotiate profitable fees for green building projects, even in a very competitive environment.
For example, being creative with green building value engineering for energy and water savings, along with high levels of indoor air quality, might help an engineering company to create far more valuable green buildings for the same fee as a more conventional company. The ability to specify building-integrated PV systems would fall into the same category.Knowing the costs and the engineering details for PV systems would help an engineering firm convince owners to move forward with these systems.
A good example of the competitive advantage of lower cost of operations is the almost unblemished success record of Southwest Airlines. For Southwest, the low prices made possible by reduced operating costs have become a primary brand. Southwest has been profitable every year since 1972, a record unmatched in the airline industry.
One example of a developer focused on low cost as a basic competitive strategy is Workstage, LLC, which is focused on the corporate build-to-suit market, primarily in the Midwest. Based in Grand Rapids, Mich., Workstage aims to wring out costs of doing green buildings by standardizing every element of the design and construction process. It uses interchangeable modules (a kit of parts) and like-minded architect-engineer teams for each project.4Its corporate and institutional clients want green buildings, but it does not want to spend an extra penny to get this benefit. Workstage's approach is not to change architects or engineers, but to work with the same designers on the same project types, as a means to wring out costs from the system. If an engineering firm wants to engage such clients, it needs to understand how to produce standard designs that can be customized quickly for each location and its specific program requirements.
6. Have focused differentiation/relationship management. The essence ofmarketing is knowing which markets to compete in and which to ignore, which clients to keep and which to leave. Marketers need to combine a laser-like focus on market segments, and key targets within those segments, with either low cost or differentiation. Points of focused differentiation include:
Regional vs. national. Design firms often compete nationally by narrowing their focus to one target market; or by trying to dominate a local niche. Firms that are much focused locally are often able to compete against much larger national firms, or else to team with them on larger projects.
Client types. This focus can include smaller clients, psychographic profiles of larger clients, or those distinguished by strong cultures and values of sustainability. Architects focused on winning design competitions, for example, clearly seek out adventurous decision-makers for projects that embody a community's or an institution's highest aspirations. And they need creative MEP engineers to help them realize their visions. When the Dutch firm, Office of Metropolitan Architecture (OMA), was chosen to design Seattle's dramatic new main city library in 2002, it consciously decided to place this building on the world stage, much as was done with the city's Space Needle for a World's Fair forty years earlier.
Building or project types. Likely to be affected in the future by higher peak-period electricity rates, some buildings, including office and institutional, might be good candidates for energy-efficiency investments, particularly in states or utility service areas with significant incentives. A green engineering firm can identify such clients, make energy-efficient buildings its major marketing focus, and direct most of its communications to their needs.
Signature green measures. While it can be risky for developers and engineers to bring certain technologies to their projects, it is more dangerous not to be known for anything in particular. Branding a company in the green building arena with specific technology solutions for particular building types and sizes can be an effective marketing measure.
Project size. This also can be a focus, allowing smaller green engineering firms, for example, to compete with larger and more capable competitors. An example might be a focus on maintenance and operations facilities for public works, that is, a type of project that is typically smaller than most office buildings, but can occasionally exceed $10 million in construction cost.
7. Build a brand image. In today's commercial world, a major task is to create a brand that incorporates the key differences in an engineering firm that make a difference in the mind of a buyer. An engineering firm might want to be thought of as a leading-edge technology company or as dominating a large product category.
To understand the branding opportunity, consider the following statement: All marketers are liars.5One way to read this statement is to understand that we are all creating stories about projects, capabilities, values and interests for ourselves and our clients on a regular basis.
In the final installment to this series, I will provide some conclusions about the seven keys to green marketing.