Want to know one of the most significant obstacles to green home building? The prevailing builder myth that ALL consumers ONLY care about energy efficiency because an energy-efficient home will cost less to operate. (Oh, and let’s not forget the “everyone just wants granite … not green” mantra.) Well, wouldn’t marketing be so much easier if consumers were a completely homogeneous group and everyone’s purchasing decisions were based on such simple black and white (er, green) choices?
Builders are right that many consumers do care about energy efficiency. And a portion of those (we can debate the percentage) care about energy efficiency specifically because a more efficient home, apartment, or car will save them money. But that only tells part of the story. Some consumers, particularly many of the Millennials (the generation born after 1981), believe strongly in energy efficiency, but not because it saves them money. Many Millennials find that notion offensive. Rather, these homebuyers believe builders should build energy-efficient homes and, in turn, they themselves should buy energy-efficient homes because it is simply the right thing to do. When I tell builders this, they often scoff. “Nonsense,” they are quick to reply. “Obviously people want to save money on lower utility bills.” Interestingly, consumer research shows that the demographic that most favors energy efficiency for the cost savings is white males over 50. Could it be that the builders I talk to are perhaps projecting their own values and beliefs on their consumers?
So, here is the first truth of effective green marketing: Consumers are a complex bunch. There is simply no universal way to motivate everyone. That leads us to the second truth of effective green marketing: Successfully marketing green homes can be tricky. You must connect with your prospective buyers by understanding their expectations and values. And since consumers are not a homogeneous lot, you may have to craft distinct messages with different value propositions for the various consumer segments you are targeting.
Don’t care about green? You can’t afford not to. The green home market is growing rapidly and, according to McGraw Hill Construction’s recent SmartMarket report, will double between 2013 and 2016—going from $37 billion (27% of market) to approximately $90 billion (up to 33% of market).
So let’s review some of the prevailing market research on green and sustainable products to help you be more successful in marketing your green homes.
The first notable report, Nielsen’s Doing Well by Doing Good, examines if consumers really engage in conscious capitalism when it comes to its buying decisions. Nielsen polled 30,000 consumers and found that consumers claimed they were willing to pay extra for products and services from companies committed to positive social and environmental impact. In fact, Nielsen also found a 7 percent increase in consumers willing to pay more than a similar 2011 survey.
You may think, that’s great, but saying you will pay more and actually paying extra are two very different things. I agree. That’s why it is even more telling that a review of retail sales data for a cross-section of both consumable and non-consumable categories across 20 brands showed an annual sales increase of 2 percent for products with sustainability claims on packaging, and a rise of 5 percent for products that promoted sustainability actions through marketing programs. Brands without sustainability claims or marketing only enjoyed a sales rise of 1 percent.
In the aggregate, this survey research is interesting and points to increasing consumer behavior that rewards products with a positive environmental impact. But how can a builders turn consumer interest in sustainable homes into a contract of sale? Here are a few suggestions…
A green home offers greater value to a homebuyer. Your green homes are better than the other code-minimum homes they are considering. Make sure they know NGBS Green Certified homes cost less to operate, perform better, and match their social, environmental, and other values.
Why does most sustainability language always seem to reflect sacrifice? (e.g., “To be sustainable, I have to give up [fill in the blank].”) Or worse, the end of the world as we know it? This can be highly de-motivating for the consumer. Your marketing materials and your sales staff need to speak about the extra value and tangible benefits that green homes can deliver, thereby changing the conversation from sacrifice to satisfaction.
Consumer research consistently finds that people want to live a more sustainable lifestyle, but many are not sure how or where to start. Show consumers how sustainability is directly relevant to their lives and aspirations, and how “I” can benefit when purchasing a more green home and adopting a more sustainable lifestyle.
The challenge of successful green home sales is not just about improved communication. Builders also need to deliver homes with the aesthetics, products, features, and technologies that consumers want. I am reminded of a large, new, planned community where the developer asked the builders to offer modern homes as an alternative to all of the traditional homes available. Every builder resisted. “Who wants a modern home?” they protested. Finally, one builder offered a high-performance, modern home and was quickly rewarded by having the best-selling models in the entire community. Don't resist reliable trend data on consumer preferences just because they don't match your own.
Are you really sure homebuyers don’t care about green homes? Maybe we can help you better communicate the value to your prospective buyers and turn cynicism into sales.
***