Creating energy-efficient homes can benefit a builder’s bottom line if the builder knows how to communicate the value of the efficiency measures to buyers—but many builders are having the wrong conversation, according to Vernon McKown, co-owner and president of sales for Ideal Homes in Norman, Okla. Since 1990, Ideal Homes has used energy efficiency as a major selling stake in its homes in the Oklahoma City area, which average 1,000 to 3,200 square feet and sell for $100,000 to $400,000. McKown reported roughly 300 closings a year.
“I get builders all the time telling me ‘My customers don’t give a crap about energy efficiency,’” McKown told attendees at “Building Energy Efficient Homes on a Budget” at the International Builders’ Show in Las Vegas on Wednesday. “You’re having the wrong conversation.” The key, McKown said, is making the conversation relevant to the homeowner. “When you talk to a customer about energy efficiency, you have to make it relevant to them, he said. “We talk to them about saving $60 to $80 a month and ask ‘Are you interested in that?’ Most of them are.”
McKown offered the following tips to maximizing energy-efficient strategies as a sales tool:
- Explain energy-efficient features but keep it brief. “You have to demonstrate the product to get the value you’re asking for,” McKown said. “If you’re doing R-19 walls, take a minute to explain about how you insulate and seal up your walls to get that performance scale, even if the other guy down the street is doing it, too.”
- Keep it brief. “People don’t want to spend 10 minutes on energy efficiency. They want two and a half minutes,” he noted. In this regard, “pick your biggest punches, talk about how you’re different from the next guy, show it to them, and move on,” McKown said. “You don’t have to wear them out.”
- Talk about actual savings. “We all think we’re competing with the builder across the street, but the largest competition is the used house market,” McKown said. Buyers may be able to choose a larger existing home at a lower price, so you need to justify a potential price increase on a new home, he said. In this regard, talking about monthly energy bill savings and how that will accrue over time compared to an existing home is beneficial to illustrate the added value of a more efficient home.
- Train your sales staff to talk about the whole house as a system. “Salespeople aren’t going to sell energy efficiency until they’re comfortable talking about it,” McKown said. “They won’t talk about high-performance windows if they don’t understand high-performance windows.” Ideal Homes operates continual training and conducts weekly role-playing sessions where employees play the part of potential customers, the team watches the interaction, and the session is discussed as a group to identify potential improvements. Taking it one step further, McKown also sends out mystery shoppers to sales meetings, who pose as potential customers and are armed with hidden cameras to record the interaction. This video is then reviewed with the salesperson.
Reframing these types of conversations has proven successful for Ideal Homes, with McKown reporting higher prices per square foot, and higher gross margin and net profit. Remember, McKown told attendees, “today’s customers are smart. If you give them a little bit of information, they will make good decisions on their own.”
See related story: