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Selling the VALUE of Energy Services


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Selling the VALUE of Energy Services

  1. 1. Presented by AirAdvice Featuring Dave Hewett & Jim Crowder
  2. 2. Introductions <ul><li>Dave Hewett: </li></ul><ul><ul><li>Former Chairman of BOMA International </li></ul></ul><ul><ul><li>25 year vet of commercial real estate industry </li></ul></ul><ul><li>Jim Crowder: </li></ul><ul><ul><li>CEO & President of AirAdvice </li></ul></ul><ul><ul><li>Provider of BuildingAdvice, industry-leading platform for building service providers to grow sales of service and retrofits by delivering cost savings for their clients. </li></ul></ul>
  3. 3. Agenda <ul><li>Energy Costs in Commercial Buildings </li></ul><ul><li>Market Attitudes Toward Energy </li></ul><ul><li>Myths About Energy Efficiency </li></ul><ul><li>The Value of Energy Efficiency </li></ul><ul><li>Selling the Value of Energy Efficiency </li></ul><ul><li>Open Discussion </li></ul>
  4. 4. Energy costs in commercial buildings <ul><li>Buildings responsible for: </li></ul><ul><li>39% of all energy used in the U.S. </li></ul><ul><li>76% of all electricity </li></ul>
  5. 5. Energy costs in commercial buildings
  6. 6. Building operating costs Hard Costs Hidden Costs Soft Costs Energy and replacements are highest
  7. 7. Building operating costs 70% of energy goes to HVAC and lighting
  8. 8. Market attitudes towards energy Energy Efficiency Indicator - North America 2010 By Johnson Controls
  9. 9. Market attitudes towards energy
  10. 10. Market attitudes towards energy
  11. 11. Market attitudes towards energy
  12. 12. Market attitudes towards energy
  13. 13. Market attitudes towards energy
  14. 14. Market attitudes toward energy “ A couple of years ago rent appreciation had a major impact on asset values. Operating costs were not at the top of building owner’s priority list. Today, as rent growth has slowed, reducing operating costs can have a significant impact on the value of a building . Energy efficiency has now become a priority.” - Mark Fitkin, CB Richard Ellis
  15. 15. If it’s so obvious……..
  16. 16. Common myths about energy <ul><li>Not a controllable cost </li></ul><ul><li>Requires capital investment </li></ul><ul><li>My building’s fine. I’m not wasting much. </li></ul><ul><li>Savings are always less than promised </li></ul>
  17. 17. Other concerns of facilities managers <ul><li>Don’t have the time to dedicate to it </li></ul><ul><li>Lack the required skills </li></ul><ul><li>Emergencies always get in the way </li></ul>
  18. 18. Why HVAC? <ul><li>Your access to underserved market </li></ul><ul><li>You know and understand major energy-consuming systems in buildings </li></ul><ul><li>You’re in buildings every day </li></ul>
  19. 19. Where the market is heading <ul><li>All sorts of players coming to building owners with promise of $ savings </li></ul><ul><ul><li>Utility bill auditors </li></ul></ul><ul><ul><li>Insurance co’s </li></ul></ul><ul><ul><li>Financial consultants </li></ul></ul><ul><ul><li>Elevator manufacturers (and other OEMs) </li></ul></ul>
  20. 20. Where the market is heading <ul><li>Need to differentiate and to show value </li></ul><ul><ul><li>Benchmark to immediately show your aptitude </li></ul></ul><ul><ul><li>Low- and no-cost savings to prove your value </li></ul></ul><ul><ul><li>Propose projects using ROI of energy savings </li></ul></ul><ul><ul><li>Prove savings with ongoing meter monitoring </li></ul></ul>
  21. 21. Keys to selling energy services <ul><li>Talk to financial decision-maker </li></ul><ul><li>Speak their language: ROI </li></ul><ul><li>Compare their options for them </li></ul>
  22. 22. Speaking the right language <ul><li>State your benefit - as a solution to problem they’ve indicated they have ( i.e. high operating costs) </li></ul><ul><li>Quantify the benefit (10% of 100k annual energy spend is $10k, this is the minimum we can save you) </li></ul><ul><li>State this economic benefit in </li></ul><ul><ul><li>Payback period </li></ul></ul><ul><ul><li>ROI </li></ul></ul>
  23. 23. How to sell the VALUE of energy <ul><li>Educate them on their options </li></ul><ul><li>Lay out the complete value picture so they can assess true costs & benefits </li></ul>
  24. 24. Compare options: The ROI of Energy Savings Written in 2010 Study of the ROI of energy projects in Commercial Buildings Provided by the IFMA Foundation, a leader in education and research for the commercial real-estate market
  25. 25. The ROI of Energy Savings Payback comparison : Energy has the shortest payback overall
  26. 26. The ROI of Energy Savings
  27. 27. The ROI of Energy Savings Energy has the best ROI overall
  28. 28. The ROI of Energy Savings
  29. 29. The ROI of Energy Savings NOI: Energy provides the greatest increase
  30. 30. The ROI of Energy Savings
  31. 31. The ROI of Energy Savings
  32. 32. What do CFO’s Expect?
  33. 33. Let’s replace myths with reality
  34. 34. Replace myths with reality <ul><li>Myth: My building is fine, we can’t be wasting that much </li></ul><ul><li>Replace: Energy Benchmarking to show them exactly how much </li></ul>
  35. 35. Replace myths with reality <ul><li>Myth: Capital spending required </li></ul><ul><li>Replace: Propose low- and no-cost energy savings measures </li></ul>
  36. 36. Replace myths with reality <ul><li>Myth: Savings are always over-promised </li></ul><ul><li>Replace: Don’t over-promise. SHOW the financial payback info, then prove the ongoing savings </li></ul>
  37. 37. Key takeaways <ul><li>Be systematic but patient </li></ul><ul><ul><li>Don’t swing for the fences every time </li></ul></ul><ul><ul><li>Start with a pilot, then take to other buildings </li></ul></ul><ul><ul><li>Be proactive, and do in small steps </li></ul></ul><ul><ul><li>Then use the savings instead of the capital budget to fund the next step </li></ul></ul><ul><li>Get paid to prospect </li></ul><ul><li>Explain a process to your clients & prospects </li></ul><ul><ul><li>Don’t just heave promises of energy savings at them. They get enough of this. </li></ul></ul>
  38. 38. Open for questions ? ?? ??? ???? ?????