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Integrating sustainable design into marketing programs

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How should marketers advise their firms to take advantage of market opportunities in sustainable design? First of all, marketing plans have to explicitly promote sustainable design as a major focus of the firm; second, market research has to yield profitable opportunities in selected market segments and among targeted clients.

Marketing plans

Marketing plans are by nature speculative. They take what we know, add what we don't know but can guess at, and then come up with a game plan for the future that we intend to follow. Design firms are by nature opportunistic; I've yet to encounter very many that have the discipline and cohesion to follow a plan over the course of even 12 months, let alone multiple years. Those that stay on plan and "on message" often reap the rewards of gaining better projects, because there is an opportunity cost to not having a plan (and just pursuing any project opportunity that lands in front of you), just as there is a cost to having a plan and having to spend to implement it.

Yet the exercise of marketing planning is essential, for several reasons. As the old saying goes, "if you don't know where you're going, any road will take you there." Without a plan, it's impossible to make intelligent choices as to how to spend your budget, your time and the time of the key people in your firm - your number one marketing resource. Focusing most of your resources on a few key positioning strategies is the essence of good planning.

Marketing planning helps leverage your core capabilities, which include what your firm has already accomplished in sustainable design and green buildings, including LEED-certified projects in the past year and total of firm-wide LEED APs, as well as what you are capable of doing, but haven't yet found the right project to demonstrate.

Just as we leverage new prospects and our knowledge of upcoming projects, we need to have a marketing plan that clearly spells out "go/no go" decision criteria for sustainable design, development and construction opportunities. In fact, if you've done a good job of market segmentation, targeting and relationship management, you'll clearly know which projects not to pursue so that you can save your energy and resources for the project proposals that will move your firm forward in the world of green building.

Marketing planning is an essential ingredient in guiding marketing communications budgeting and execution, especially if a firm plans to open up a new line of business and wants to get the client and prospect base to look at the firm in a new light. Once you are clear about your firm's positioning in the world of sustainable design, then you'll know what the key messages need to be to reinforce your positioning.

A marketing plan provides a clear roadmap, in terms of both wayfinding and destination, against which you can assess your performance. Client needs are always changing, new competitors emerge, and your own project experience adds new dimensions of client satisfaction (or dissatisfaction) that will help (or hinder) your marketing efforts. Assessing the marketing environment and your performance in securing the work that you want is an essential element in marketing planning.

The marketing budget is a primary tool for pursuing new opportunities. Late in 2004, I convinced management of an engineering firm where I worked to spend more than $60,000 (a large amount for them) to prepare a detailed case study of a project still in design that we expected to be our first LEED Platinum project (and the largest in the world). This project was certified Platinum in early 2007. In the meantime, the firm has reaped enormous rewards (prior to project completion) from sending out more than 9,000 copies of the case study around the world. As part of a larger marketing communications program, this case study elevated the position of the firm in the minds of architects to one of the leading sustainable engineering firms on the West Coast. As this case illustrates, sometimes the marketing budget has to be viewed as an investment in a five-year strategic plan, rather than just a tactical expenditure for the coming year.

Market research

Given the rapid growth of the green building industry, it is clear that every firm is going to have to come up to speed on sustainable design and green construction, or risk falling behind its competitors. Some of the market research issues around creating sustainability marketing plans include:

• data gathering

• using sources of information

• designing formal research surveys

• analyzing qualitative and quantitative data

• forecasting trends.

Where should you get started? There are a growing number of trade magazines (and their online versions) that deal with sustainable design for the built environment. Probably the most useful for marketing professionals are the more general trade and professional publications with regular coverage of green buildings and green developments, described in Appendix 1.

You will easily see that there is way too much to read on a regular basis! Obviously there are online newsletters of every variety. Instead of subscribing to every one, I recommend trying Google Alerts; use such search terms such as "green building," "green development," "green construction," "sustainable design," and your inbox will get a good digest every morning of four to six news articles and two to four blog entries on the topic. This is a great way to get current information and an easy way for marketers to impress a firm's professional staff that they're on top of this issue.

You also need to understand the terminology of sustainability, especially LEED. I recommend taking a LEED Technical Review workshop as soon as possible to get better acquainted with the broad dimensions of the field, especially if your firm is an architect, engineer or builder. There are nearly 100 such workshops offered each year, so there should be one near you at least once a year. Also, make sure your firm is a member of the USGBC and attend some of the local chapter or branch meetings to learn more of the terminology and what's hot in your area at the present time.

I also recommend some serious market research, first of all with your clients. How much are they changing their focus toward sustainable design and construction? For example, the AASHE is a new umbrella group formed early in 2006 to coordinate architects and planners, business officers, facilities staff, administrators, faculty and students around the topic of sustainability on campus.8 At the beginning of 2007, nearly 200 universities were dues-paying members. Simply put, sustainability is the hottest issue in higher education right now, and the student, faculty and university presidents' interest in this topic is putting pressure on college facilities staff to be as green as possible. That usually means achieving at least a LEED Silver rating for each project.

Research how many LEED APs your competitors have, and make sure you have a significant number of professional staff who are LEED APs and can respond to this new demand from established or prospective higher education clients.

DPR Construction is a major California-based firm with 185 LEED APs, 27 percent of its total staff of 665, a very strong showing for a construction firm and the highest percentage I know of that industry group. DPR's own 52,000-square foot (4775 sqm) regional office in Sacramento, California, shown in Figure 10.2, is a LEED-NC Silver-certified project. DPR also received LEED-CI

▲ 10.2 DPR Construction gained an even greater understanding of the development process from an owner's perspective when they pursued (and received) LEED-NC Silver certification for its own 52,000 square foot Sacramento office building. Courtesy of DPR Construction, Inc.

Gold certification for the commercial interiors portion of the project, owned in conjunction with ABD Financial and Insurance Services, Inc. Their demonstrated corporate commitment ("we exist to build great green things") goes a long way toward selling institutional clients on their services, particularly in a world where contractors are chosen on qualifications, rather than just on price. As a construction firm interested in advancing its own capabilities, DPR used the project as an opportunity to further enhance its unique "LEED Preconstruction Cost Analysis Tool" to evaluate first costs vs. potential life cycle savings, making informed decisions regarding which credits to pursue and estimating the anticipated ROI. For example, DPR determined that the additional $85,000 outlay (1.4 percent of capital cost) for the new building would be recovered within 2/2 years through water and energy savings, with an anticipated overall return of $359,758 by 20I3.9

Take a look at upcoming local and state government projects; more than 15 states and 60 major cities have substantial policies requiring sustainable design certification for their own projects. Many public and institutional projects are incorporating five percent, I 0 percent or higher weightings for sustainable design experience in their requests for qualifications (RFQs). (A good source for information on local government policies is the USGBC web site.)10 More than 25 states offer incentives for renewable energy; a directory of incentives can be found online.11 Your firm needs to know which such incentives are offered, for which types of projects, in each location where you do business.

Each market sector involved with building and development is moving quickly to incorporate LEED or other sustainable design standards in their projects: secondary education, healthcare, high-rise residential, affordable housing, cultural and recreational facilities, fire and police stations and corrections. Wherever your firm is active, you need to start tracking green-certified projects in that market area, by segments such as geographic, project type, project size and public/private.

Finally, there is still a role for qualitative research. For example, a firm should interview clients on a regular basis and find out where your firm is positioned (in their minds) relative to other firms offering similar services. Find out what sustainable design services they want that no one is yet offering; understand their level of experience and offer to update them from your own firm's projects.

If you've completed green design projects, there is a "one question" survey that can be easily administered and the results tracked, yielding surprisingly good data and trend lines. It is this question: "Based on your experience with this project, on a scale of 0-10, with 10 representing 'extremely likely,' how likely would you be to recommend our firm's green building services to a friend or colleague?"12 The "promoters" give your firm ratings of 9 or 10. The "detractors" give your firm ratings of 0-6. Most marketers would consider 7 and 8 scores to be more or less neutral or "passively satisfied;" they are unlikely to give strong recommendations to others. Subtract the number of detractors from the number of promoters, to get the "net promoter score," and you'll get a more accurate picture of who is singing your praises and who is telling the world not to use your services. Tracked over time, the results of this simple question can lead to a revolution in client loyalty, as well as spurring your internal training and education efforts. The lifetime value of a client is realized fully only from truly loyal clients who recommend your services to others. Says Harvard Business School Professor, Frederick Reichheld, "The only path to profitable growth may rest in a company's ability to get its loyal customers to become, in effect, its marketing department."l3

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