The Keys to Marketing Green – Part 3

In the first two parts of the series (CSE 05/07 p.29, CSE 06/07 p.27), I explained that there is no single competitive response to the growing green building market that is right for every design firm. Nevertheless, I discussed seven keys to sucessful green marketing:

1. Segment markets

2. Choose competitive markets

3. Position your company as leader

4. Differentiate green development offerings

5. Become a low-cost provider of green design services

6. Have focused differentiation/relationship management

7. Build a brand image.

In this installment, I will provide conclusions to the seven keys to green marketing.

Deliver a story

You must shape the story that’s told about your projects: if your story is significantly different from the contractor’s experience and the owner’s experience and the occupant’s experience, then one of you is a liar. The point is that green building branding is best done when it is a story about project successes and lessons learned, and one that all key parties agree with.

The essence of a brand is incorporated in how you deliver your services, in your firm’s personality and core values (which in turn determine whom you hire and whom you encourage to seek another place to work), your culture (collaborative or confrontational, or something in between) and all of the promises you want your clients to believe (clear and frequent communications on each project, the highest level of expertise and technological competence, etc.) A brand is something that creates a strong personal and professional relationship between your people and the clients’ staffs, to build loyalty and lasting relationships.

The marketing benefits of branding are multiple. It can shorten the decision cycle of a client and reduce your cost of marketing. If you are always short-listed by certain clients and client types, you have a brand. It gives you some pricing flexibility. After all, if clients really want you, they’ll pay for all of the special things you bring to the project, within reason. Branding helps you attract the kind of people who in turn reinforce the brand.

This point deserves the strongest emphasis: Marketing and recruiting are two sides of the same coin. The same values and branding attributes that attract clients attract good people, and a professional service firm is nothing if not a talent agency. Without the talent, you have nothing to sell, and you will never be a market leader. You can see, therefore, that this is a positive feedback loop.

The more clear you are about your market positioning and values, the more likely you are to attract the talent that will help you grow market share and dominate various green building niches. And the successful execution of your brand generates loyal clients, which in turn builds your business. Because many clients perceive engineering services as a commodity, and because many engineering firms deliver engineering services as a commodity, a brand differentiates your services in a significant way from those of the also-ran firms.

What makes a brand?

What makes a brand in the green building marketplace?

• A brand is a story told between marketer and consumer, between architect and client, between developer and tenant or buyer. The story must resonate with the client or buyer to be effective. The storytelling focuses on the features of the project, but translates those features into benefits that the recipient clearly can appreciate. Who tells your story when you don’t attend project close-out meetings because you’re “out of fee?”

• A brand sells an experience or a series of benefits to the consumer. People must be led from understanding the value of the features to understanding how they will benefit from them. Think of Starbucks: It sells a commodity product you buy in thousands of locations in any town, and at a significant price multiple. Starbucks has managed to create more than 10,000 permutations on the basic “cuppa java” to give you a unique taste experience.

• A brand delivers on its promises. For example, in my own LEED Gold-certified apartment building in Portland, Ore., the presence of a trash room with recycling bins just down the hall, and on every floor, and the enforcement of the required no smoking policy, both reinforced daily the promise that the green building experience in this place would be something different.

• A brand walks the talk. Consumers expect sellers to live by the values of what they are selling. A green engineering firm should have offices in a green building. A green firm should craft a LEED-EB, LEED-NC or LEED-CI certification for its own offices. TKG Consulting Engineers in San Diego did just that: a LEED Gold-certified new building, the first Gold building in town. A green engineering firm should be promoting sustainability in all of its activities, not just in an isolated project now and then.

• A brand communicates its differences effectively. A common saying is that the average adult is subjected to about 2,000 commercial messages daily. Getting through the fog with effective communications is a great art. Most savvy firms engage a strong public relations firm to tell their story and support a continuing dialogue with the marketplace as an integral part of their marketing effort.

Of course, one can create differences for each market segment that one chooses to address: some might value innovation, while others value low-cost or specific technological choices, such as geothermal heat pumps, photovoltaics or roof gardens.

There are few established consumer brands in the green building marketplace today. Without a leading brand (and with due apologies to the major companies involved in this business), the average client will not have a basis for making a purchase. Even in commercial situations, the lack of a brand can have drawbacks. For example, imagine the confusion in the commercial air-conditioning market without major brands such as Trane, York and Carrier.

While a home builder can sell ENERGY STAR, GE or Whirlpool appliances to residential buyers, the lack of name recognition for most green technologies forces the engineering firm or the developer to become the brand. This is a heavy burden for a service firm, but one well worth the effort. Expect it to take three to five years to bear fruit.

Marketing as an evolving strategy

Practitioners need to understand how their marketing must evolve in order to compete effectively:

• They must choose a strategy that incorporates high levels of differentiation or lower overall costs, with explicit focus on particular market segments that might include geography, project type, owner type, psychographic profile, project size, specific technological approach or signature green measures.

• This strategy must be reinforced internally and externally so that it becomes recognizable as a brand identity. Internal reinforcement includes training and certification of employees as LEED Accredited Professionals. External reinforcement includes activities to increase the visibility of the firm and its key professionals in the chosen market niches.

• Larger engineering firms should consider developing their own proprietary tools for managing sustainability goals in their projects as part of a branding approach. Along with these tools, firms should develop methods to successfully execute LEED projects without additional fees.

• Engineering firms must form close working alliances with their contractors and clients. This helps ensure the firms’ green building projects will be built according to prevailing budgets, times, technology options and resource constraints.

Understanding demand for green buildings

Now that we’ve presented how an engineering firm should market green design services, it also is important to recognize that a clear analysis of current and potential clients and future project opportunities is critical to refining the marketing message. This said, how should companies think about marketing and selling high-performance buildings and developments? In all cases, the answer comes down to these questions: Who is the buyer? What are their characteristics, motivations, and unmet needs? What elements of green buildings do current and potential buyers value most? What do they think they are really buying? How do various customer segments differ in their priorities? What changes are occurring in these priorities? Do the customers for high-performance green buildings fall into any logical groups based on needs, motivations or characteristics?

Client characteristics

At this stage of market development for green projects, the private-sector buyer or owner will be an innovator or early adopter (in diffusion of innovation terms) and somewhat of a risk taker who is willing to balance the strong case for financial and organizational gain against the risk and possibly higher costs of this new approach to building design and construction. In my opinion, innovators tend to be high-status individuals with higher education levels than later-stage adopters. This type of buyer will respond well to a factual presentation of benefits, will see the longer-term picture, and will likely have done considerable homework before considering the green building approach.

The institutional or government-sector buyer is more likely to be an early adopter of new technology driven largely by policy initiatives, supplemented with the perspective of a long-term owner-occupier-operator of buildings. The higher-level institutional owner is able to look beyond payback of energy-efficiency measures, to the higher value of such buildings and the positive feedback from the stakeholder base: public officials, employees and the public. These owners typically are more risk-averse than innovators and tend to rely on social networks for information. They want to see solid cost data and preferably local examples of successful projects. They will not be the first to act, but even though they are not spending their own money, they are willing to take only carefully calculated risks. The nonprofit sector has an additional motivation that is driving green projects forward: Identifying with green buildings has proven effective in raising money for building projects and in differentiating organizations in the crowded market for grants and charitable contributions.

Unmet needs

The marketing task for building engineers and facility professionals is to respond to clients’ unmet needs by considering high-performance buildings for their next projects. In many cases, however, these needs are not articulated well enough to compete with other priorities. It makes sense to use something like the LEED or ENERGY STAR rating system to evaluate a project’s design and elevate these concerns to the same level asesthetic or other functional criteria.

It often happens that, during the course of design and construction, high-performance measures are often value engineered out of the project owing to higher initial cost projectsions. Many LEED projects have been found that the client’s strong requirement to achieve a certain level of LEED certification forces the design team toward an integrated approach that places the desired LEED rating at the same level as other budgetary concerns. As a result, the team looks for cost savings in areas other than energy efficiency or indoor air quality, effectively preserving those environments. Often, early-stage eco-charrettes or visioning sessions can help to articulate key stakeholders’ unmet needs.

Marketing materials for green building services

Engineers need to sell their choices to others. Often it is necessary to make a convincing case to those who hold the purse strings before embarking on the design and construction of a high-performance building. But as most salespeople know, they have to keep selling even after a contract is signed, or run the risk of buyer’s remorse after the initial sale.

Architects and engineers need to equip real estate brokers with an understanding of the green features of the project, communicate why they are important and specify what benefits they create, so that they will be able to present them to prospective clients or tenants.

Brokers specialize in negotiation and communications, so some thought has to be given to integrating the green features into the marketing and sales materials for the building, especially if the developer is trying to recapture some of the investment in energy efficiency with higher rents, for example. Because brokers are not going to become specialists in green buildings, these marketing materials have to be straightforward and readily understandable by those without technical training.

The best approach is to make the literature about the features of green buildings fit in with the marketing literature for the project. In some ways, this is uncharted territory, especially in the speculative commercial building world. Nonetheless, the basic lesson of sales remains: Sell the sizzle, not the steak. For technical features of green buildings, this means spelling out and selling the benefits rather than the features.

For example, if a project is saving 40% more energy than a commercial building, then the pitch to a conventional CEO or COO might be that you have just made one-third of the operating costs (in a typical building) 40% less expensive to operate and you have created a high return on incremental investment that offers some protection against future uncertainties in energy prices.

If the buyer is a tenant, then the healthier indoor air quality or daylighting needs to be marketed in terms of reduced absenteeism due to illness or disease; if the tenant pays the energy bills, then part of the sale is the reduced total operating cost for rent and utilities. Convincing a tenant is a harder sell in terms of risk that the tenant will not value the benefit appropriately, so some form of certification is helpful.

Ensuring satisfaction after occupancy

In an institutional setting, the facility manager and engineering professionals often share the responsibility for occupant satisfaction. Many stakeholders in a high-performance building (from top executives down to the file clerk) need to know what they are getting in their new building, what the expected benefits are to them and to their organization and, in some cases, how to make it work. For example, in a building with operable windows, who will actually operate the windows? In humid climates, how will people learn when they are allowed to open the windows? When people work side by side, disagreements happen. Research suggests that people will often tolerate greater temperature swings from normal if they can control the environment. In the case of natural ventilation, employees need to be prepared to dress cooler in the summer and warmer in the winter.

Without a strong pre- and post-occupancy sales effort, it is entirely possible that the benefits of the building will go unappreciated and unutilized.

In one LEED Gold project in Portland, Ore., the Jean Vollum Natural Capital Center, the building owner (an environmental nonprofit organization) included a lease provision that the allowable temperature band for the building was 68°F to 76°F, putting tenants on notice to dress for the season.

LEED provides one point for committing to a “post-occupancy survey” of building occupants to find out their satisfaction with thermal comfort. Wouldn’t this survey be a good marketing tool for an engineering firm to use, in securing future business? The key point here: marketing is a continuing process, even for completed projects.

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