Green Thoughts

9.13.2010

Green Thoughts

By Guest Blogger Phil Fingerhut, NAHB CGP

In order to maximize sales, rediscover profits, and work toward the goal of 100% customer satisfaction, all of us are striving to find the ideal balance between:

Product Differentiation
Target Marketing
Sales Management
Cost Control
Professional Advice and
Planning Support
One way to do this is to incorporate strong corporate continuity while using various nationally recognized home features associated with Green construction. Generally, the market is presently more price driven and competitive than ever, but there may be an opportunity in our regional markets to achieve the balance. Some suggestions include:

Achieve Product Differentiation by strategically incorporating Green designs and features that set you apart from the competition.

Target Market groups such as the Millennials (who will be both environmentally aware and energy cost sensitive), and the 50+ Boomers who may want to downsize to a more efficiently designed and constructed home.

Manage the Sales efforts, starting with raising the whole company culture, and then implementing specific educational efforts on tools such as Energy Efficient Mortgages, utility savings models, construction details, etc. And then promote the differentiating company and product attributes.

Control Costs by researching ways to offset additional material costs with more efficient construction methods.

Seek out appropriate Professional Advisors, possibly including a third party rater and/or verifier and advanced Trade Partners who are aligned with the goals.

Planning Support can be provided by professional groups such as Shinn Consulting or other specialized entities that can help benchmark local efforts against other successful national programs.

The Green mindset can be approached with a program—generated internally by your own company—that incorporates perceived local market needs and desires. This can be done successfully, but it may lack the enhanced consumer perceived legitimacy of a branded Third Party system. If this path is chosen, carefully construct the program and then engage in a lively marketing effort, being extremely sensitive to the liabilities of implied or actually promised product performances.

In order to address consumer confidence relative to a Green program, consider a well branded third party program. A very straightforward, effective and well branded national program is Energy Star. Really can't go wrong there! Energy Star (www.energystar.gov) costs would include the rater and some additional construction costs, depending on your present specifications and construction methods and the desired HERS rating. Please note that Version 3 will be implemented in the near future, and will include enhanced performance standards. Also note that there have been tax incentives and rebates for Builders and consumers relative to the Energy Star and other programs. See: www.dsireusa.org.

The United States Green Building Council (USGBC) sponsors the LEED (Leadership in Energy and Environmental Design) program. This started in the 90s as a commercially oriented program and has more recently incorporated residential applications. It also possesses tremendous branding capacity, but can be a bit cumbersome administratively, depending on the local market.

Recently the ICC, in conjunction with the NAHB and ANSI, produced the Green Building Standards (ICC 700). This is a formal codified optional tiered program that coordinates with the nationally accepted ICC family of codes. The NAHB has invested tremendous resources in coordinating the effort and producing the Green Scoring Tool (www.nahbgreen.org) to help builders navigate the process. Soon the International Green Construction Code (IGCC) will be perfected and will also codify non-residential Green construction. The ICC 700 National Green Building Standards most likely will become the premier residential comprehensive Green program.

This briefly outlines some considerations for us all as the industry experiences the upcoming measured recovery. Green has been an often used, possibly well worn, moniker. But when properly and carefully packaged and marketed, it can be an increasingly powerful tool in attracting the ever evolving buyer who wants to live in a comfortable, safe, affordable, energy efficient home with a measure of environmental awareness