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A Comforting Message

Posted by Suzanne Shelton

May 1, 2014 6:53:00 PM

There's an interesting yin and yang to selling a home (or home improvements) based on energy efficiency. On the one hand, 81 percent of prospective homebuyers claim energy efficiency would impact their home selection, all other things being equal (amenities, school district and price). But on the other hand, half of us claim to have made 1–3 energy-efficient improvements to our homes, only to see our utility bills stay the same or go up. So many of us feel like Charlie Brown chasing the proverbial football, and just don’t buy into energy efficiency savings claims anymore.

The net effect is that fewer and fewer Americans are actually in the market for energy-efficient products and services today than they were a few years ago, and—perhaps not surprisingly—most prioritize aesthetics over energy efficiency. Only 12 percent of Americans intend to make energy-efficient improvements in the near future, while 55 percent are likely to make aesthetic improvements.

So what can we do about it? That’s where the data gets really interesting.

We asked those who were likely to make cosmetic improvements but unlikely to make efficiency improvements to explain why. Home value concerns were the primary driver: Homeowners simply don’t believe that energy-efficient improvements are worth the investment. Not only are many unconvinced as to the return on investment (ROI) for their utility bills, but they’re also doubtful that the improvements will increase their resale value.

When we flipped the question around and asked which of several messages could convince a homebuyer or homeowner to spend $1,500 on energy-efficient features, “Efficient home features will improve resale value” was the second best message tested. (“Lower utility bills” was the first.) The takeaway here is that while Americans don’t believe energy-efficient features will save them much on their utility bills or deliver extra resale value, they want to believe it. And that’s where your marketing opportunity comes in.

A recent UC Berkeley/UCLA study of 1.6 million home transactions found that green labeling improved selling price. Controlling for all other factors, such as location, school district, crime rate, time period of sale, views and amenities, researchers found that the 4,321 homes sold with Energy Star-, LEED- or GreenPoint-rated labels commanded an average price premium of 9 percent.
Our data tells us that this benefit is not yet widely known. The opportunity, then, is to tell this story. Help homebuyers and homeowners see that energy-efficient features can enhance their homes’ values as much, if not more, than aesthetic improvements—especially in light of the traditional advice that kitchen and bath renovations give you the most bang for your buck. In reality, Remodeling
Magazine’s annual Cost vs. Value Report shows that half of the top-ROI home improvements are related to energy efficiency: doors, windows and siding.

From a resale perspective, homeowners must also weigh the benefit or edge that aesthetic renovations might provide against the major barrier to sale that neglected maintenance issues (many of which are energy efficiency related) can create. Most homebuyers expect to make improvements. In fact, according to Hanley Wood’s Housing Continuum Study, more than 70 percent of existing homebuyers know what they are going to remodel before they even close on their home, and 30 to 40 percent make home improvements within six months of purchase.

But basics like HVAC, insulation, roof, etc., are not what new homeowners want to spend their money on. Weaknesses in these core home features (which often don’t turn up until the home inspection) sour a lot of new home contracts. The message in the retrofit market should be “Energy-efficient home improvements remove many of the biggest barriers to sale.”

So where does all of this leave us regarding communications about energy-efficient homes and home improvements? We should link the energy-efficiency value proposition (and storytelling/messaging) to the things that drive most homeowners: cost savings, home value and comfort.

Comfort is not a new messaging platform for energy-efficient products and services. However, it’s rarely executed well, and is instead most often presented as a secondary, throwaway line: “Reduce your energy bills and make your home more comfortable with energy-efficient windows!” It’s rarely the primary or singular message. A well-designed campaign built solely around comfort can be even more effective than the traditional (tired) “Save money!” approach.

Comfort (and closely related health benefits) has a very strong emotional pull for two segments—women and seniors, in particular. Women are concerned about the health and well-being of their families. Drafts and cold rooms are a threat to good health and run counter to the desire to provide a safe, cozy home for their loved ones. Seniors are also seeking a healthy, cozy environment. As a result of many common medical conditions or the medications used to treat them, many seniors are more sensitive to cold temperatures. A campaign specifically targeting upscale seniors that focuses on the comfort benefits of energy efficiency could have a strong impact.

So, tell your energy efficiency story in terms of resale value (in the future) and comfort (right now), and you’ll have a one-two punch that will be hard to beat.


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