High-performance and Zero Energy homes are a growing percentage of the housing market. But while these homes offer tangible benefits—including a healthy, comfortable environment and enough energy savings to offset any extra construction costs—some people still balk at the price premium.
According to James Geppner, resistance persists in large part because of how architects and builders communicate those benefits. He says that buyers will embrace high-performance homes if those homes offer solutions to real-life problems, but that most salespeople aren't doing a great job helping them see that connection.
Now, he thinks he has just the tool to open their eyes, a tool that will help buyers conclude that their most important needs can only be met by a high-performance or Zero Energy home.
Geppner is Executive Director of Erase40, a company whose mission is "to use behavioral science to speed the adoption of low and zero energy buildings." He believes that the application of small behavioral levers during the sales process will raise demand for these homes more effectively than code mandates or financial incentives like solar tax credits.
Erase40 released the first version of its Meeting Map in late September. The Map is a way to structure and guide the buyer's decision-making process and forms the basis of a sales training the company will offer. Salespeople can use it to guide buyers through the five areas most impacted by high-performance homes: thermal comfort, indoor air quality, noise issues that interrupt sleep, savings on energy and maintenance, and home resale value.
Each section of the Map covers one of these issues in language that leads buyers to make that issue a priority. After each section, there is a series of questions for them to answer about what kind of home they believe will best address that priority.
Geppner says that walking the prospect through each of these sections separately will help them see past the exclusive focus on price that leads so many people to choose conventional homes. It does this by short-circuiting what he calls future discounting.
Future discounting is why people reach for a donut even though they want to lose weight: the immediate appeal of something sweet has more power than better health in the future. It's also why people put great effort into choosing kitchen cabinets while ignoring outcomes that will have more impact on their long-term happiness, such as better air quality and lower operating costs. As a result, they end up with homes that make them poorer and less healthy.
Moving the Conversation
The Map relies on carefully crafted behavioral levers to steer buyers toward making those long-term benefits a priority. Each lever need only make a small adjustment. "A decision is less like a flash than a train that follows a track and is diverted one way or another by switches along the way," according to Geppner.
Levers used in the Map process include:
Independent evaluation of criteria. When making decisions that require them to weigh lots of variables, people rely on mental shortcuts. "They unconsciously winnow down the variables to the five or six most important to them, then produce an intuition," says Geppner. In the case of choosing a home, buyers who aren't properly led will likely discount the benefits of Zero Energy construction. The Map's goal is to keep those benefits top-of-mind.
Public commitment. Each section requires the buyer to verbally commit to evaluating homes in a specific way. For instance, in the health section, the buyer agrees to prioritize features and benefits that will keep their kids from getting asthma.
Framing. The map is very deliberate in the way it frames each of the five issues. For instance, the money section groups home expenses into two emotionally charged categories. "Yours to keep," is money used to help pay down an appreciating asset (the mortgage payment); "Gone for Good" expenses include utility bills and maintenance— costs that high-performance homes reduce.
Loss aversion. Because people will pay more to avoid a loss than to realize a gain, the Map positions the benefits of Zero Energy construction as loss reduction strategy. For instance, the acoustic benefits help homeowners avoid sleep loss. "Some homes are quiet and effectively block out noise from outside," it says. "Others don’t give the occupants any escape from the noise beyond their doors."
To develop the Map, Geppner drew on his background as a financial analyst. "I know how to evaluate a market. I can see where it's going and also what's broken," he says. He also relied on peer-reviewed behavioral science models. These include the Theory of Planned Behavior, which predicts how people's beliefs influence their actions, and the Stages of Change Framework, which explores how people make decisions.
To tailor the behavioral models to homebuyers and sellers, Geppner had about 300 conversations with 80 different architects, builders and homebuyers over the course of a year. He learned what lies behind the decision to buy or not buy a high-performance home, then crafted an intervention that took these findings into account.
His research also identified what doesn't move people to action. Emphasizing the payback period of energy-saving features isn't a compelling psychological driver. Neither is talking about climate change. "Some buyers want the social rewards of saying they're concerned about climate change," says Geppner. "What they're usually just saying is 'please like me'." The smart builder will offer that approval, but will realize that people seldom back these signals with dollars.
In fact, the list of psychological drivers isn't limited to those covered in the Map, though they’re the most universal and powerful. Other motivations vary according to the buyer, but Geppner says the training will make the salesperson better able to uncover them and include them in the discussion. "I'm neutral on what drives someone's decision," he says. "If they think that buying a Zero Energy home will ward off a zombie attack, I'm not going to argue with them."
The Map and its sales methodology are just the first in a series of planned tools. Erase40 is also working on an intervention that Zero Energy builders can use with developers to help them see the benefits of including these homes in their communities, as well as one to help get lenders on board.
All of this work has the same goal: to make it easier for architects and builders to find clients for high performance homes—and to get clients to place a higher value on those homes.
Geppner is seeking architects and builders who would like to put the Map methodology into practice and help validate its effectiveness. He invites anyone interested to contact him at James@Erase40.org.
The Energy and Environmental Building Alliance is the leading professional organization devoted to making healthy, safe, durable, resource-efficient and smart-grid friendly homes mainstream. For information on its Annual Summit as well as its ongoing training events, please go to www.EEBA.org
Cover Photo: Salespeople can use the Meeting Map to guide homeowners through the five issues most impacted by their home homes.
James Geppner, a former financial analyst, believes that the use of behavioral science can help builders sell more high-performance homes.
The Map uses comparisons and questions to help buyers think through each issue. The goal is to help them conclude that a high-performance home is the only type that will meet their needs.