Builder Magazine - July 2008 - (Page 90)

SALES & MARKETING Getting an Edge T here was a time not too long ago when the phrase, “Build it and they will come,” applied to the housing business. That time is past, and builders are now squarely focused on building what buyers say they want in a home. The primary factors in a buyer’s decision-making process—location, ﬂoor plan, price, and community amenities—are still ﬁrmly in place. But a growing percentage of buyers are adding elements of green building principles to their must-have list. Their motives probably have little or nothing to do with saving the planet (see “The Motivation to Buy Green,” below)—studies indicate that Americans lag well behind consumers in developing countries in their commitment to sustainability—but they are increasingly well-informed about what constitutes a green house and neighborhood. Builders can establish a competitive edge and reduce their impact on the environment by zeroing in on these buyer preferences.—P.C. THE MOTIVATION TO BUY GREEN uilders have said for years that they’d love to go green, but buyers weren’t interested. That attitude appears to be changing. Sustainability has moved to the mainstream, making it a much easier sell. A global consumer study by the New York–based market research ﬁrm TNS released this spring reported that 49 percent of U.S. consumers surveyed were more concerned about the environment than they were ﬁve years ago, and 36 percent had changed their behavior recently to beneﬁt the environment. Moving from the general population to home buyers speciﬁcally, a 2007 study on the market for green residential development by Washington-based Robert Charles Lesser & Co. (RCLCO) found that GREEN ATTITUDES Percentage of Americans who say they: Make an effort to stay well-informed about the environment: 36% Actively seek out environmentally friendly products: 26% Interest in sustainability is growing, but motives are more personal than altruistic. B 36.4% 36.4 percent of potential 36 4 home buyers identiﬁed energy savings, health beneﬁts, or the environment as their primary decision-making factor in their next home purchase. The lion’s share of those buyers—21.8 percent—is what RCLCO refers to as Greenback Greens, buyers for whom energy savings is their top priority. They’re joined by another 52.2 percent of the survey group who say they care about energy savings and they’re willing to spend money on it, but it’s not the primary issue in their next home. The opportunity to save money on monthly power bills—and do something good for the environment at the same time—is an attractive pitch. Emil Morales, senior vice president of TNS, lives in Del Sur, a sustainable community in San Diego developed by Black Mountain Ranch. His house is powered by solar energy. “What I love is that my electric bill is like $20 a month,” he says. “The people in my neighborhood who don’t have solar, their bill is $200 to $300 a month.” RCLCO’s research, howR ever, found that the Greenback Greens tended to be older with lower incomes and to expect a payback on their investment in less than four years, which is probably unrealistic. Most green builders put the payback Have heard of a carbon footprint: 37% Are skeptical that global warming exists or don’t believe it at all: 48% Have adopted some level of green activity into their lives: 82% Think the media exaggerates environmental issues: 38% Consider themselves “completely green”: 5% Think companies sponsor green initiatives primarily for marketing: 35% Are willing to pay more for environmentally friendly products: 53% Are not at all green: 13% Sources: “Global Shades of Green,” TNS Study, 2008; “Consumers’ Perception of ‘ “ ” 8 ’ ‘Green’ Advertising,” ’ ” Burst Media, 2007 period at between six and eight years, and most homeowners move every three to seven years, says Shyam Kannan, RCLCO vice president and director of research and development. The disconnect in the payback periods is why energy savings alone has challenges as a marketing position for green builders. “To an extent, that incentive will resonate with a certain subset of buyers,” Kannan says, “but for the vast majority of people, it’s not enough.” Add in health beneﬁts, though, and builders have a message that gets people’s attention. In fact, Kannan thinks the biggest opportunity lies with the group RCLCO calls Healthy Greens, those buyers who consider potential health beneﬁts of green homes to be the most important factor in their decision to buy a new home. When asked about their willingness to pay a premium for the health beneﬁts of a green home, 54% 54 percent of Healthy Greens were willing to spend an extra $10,000, 32 percent were willing to spend $17,000, and almost 15 percent were willing to spend at least $20,000— with no expectation of a ﬁnancial payback. “When you change the argument from one of saving a few bucks on monthly electric bills to one of limiting exposure to carcinogens, there’s a market that extends beyond ﬁnancial issues,” Kannan says. “Our conclusion is that the motivation of personal health was the most powerful message.” It’s powerful because it’s universal, and it dovetails un perfectly with the emotions pe tied to the decision to buy a tie home, says Jeff Kingsbury, ho managing principal of Indiam napolis-based green building consultant Greenstreet Ltd. “If you ask anyone, ‘Do you care about the health of your family?’ the answer is a pretty resounding, ‘Yes,’ ” Kingsbury says. “That’s where successful green marketing has ended up.” 90 ■ B U I LD E R j u ly 2008 W W W.BUILDERONLINE.COM http://WWW.BUILDERONLINE.COM

Table of Contents Feed for the Digital Edition of Builder Magazine - July 2008

Builder Magazine - July 2008 Contents Editor's Notes B-Mail Book It Green House Business Update Products National Beat Seider's Economy The Greener Good Commentary Land Planning Design Construction Marketing Ad Index Further Considerations Environmental Concerns Commentary Road to Perdition? Editor's Notes Flip Contents

Builder Magazine - July 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.