you

(synthesized music) – Hi, I’m Mark Jewell of Selling Energy. Welcome to Learning to S.E.E.:
Sell Efficiency Effectively. This is non-residential
version of this class. If you’re more interested in selling into residential settings, please consult our website
at sellingenergy.com, because there is a residential version of Learning to S.E.E.: Sell
Efficiency Effectively. Let’s launch right into it. I’d like to start this program with three guiding principles. The first one is that
energy efficiency products, services, and programs all
require effective selling. I say this because
there are lots of people in this industry, especially building
technologists, engineers, government regulators,
even some utility people, who believe that energy efficiency is such an obvious no-brainer that
all we really need to do is promote it and people will assume that it’s a greater good and adopt it. Of course, if that were true, we wouldn’t have the mess we have today. So I really do, for years, I’ve been on the road telling people that you really need
to professionally sell energy solutions as if it were
any other good or service. The second thing is that
professional sales skills make you more successful at advancing any energy efficiency initiative, regardless of your role in the process. An interesting statistic
I heard the other day, the average salesperson
receives three days of sales training in their entire career. Most of that is actually
not sales training at all. It’s product knowledge training. I’ve had people take a
course like this and say, “If I would have had that 10 years ago I’d be retired by now.” Very few people have had the benefit of having a collected, a basket, of professional sales
strategies and tactics handed to them without having a varnish of this is our skew, this
is our catalog logic, here are brochures, and
this is the ordering cycle. Professional sales skills stand alone. You need to give them to people that are selling energy solutions. The final thing is you
really need to think of yourself as a sales professional, even if your job title does
not include the word sales. Why do I say this? If I reflect back on
the thousands of people that have taken this course, either online or in person, one of the themes that comes to me is that the companies that have
been the most successful have been the ones that have
been imbued sales skills in everyone who is customer facing. What do I mean by that? Obviously, business development
would get sales training. But what about marketing? After all, they’re crafting the messages. They’re making the website, be congruent with whatever
the brochures say, which should be congruent
with whatever the customers are hearing from the sales professionals. What about the people that
are the product managers? What about the people
who develop the website? What about the service
technicians in the field changing the ballast or changing filters, or lubricating motors. What if you empowered them to be deputized as sales professionals? What if, in addition,
to changing the filters or lubricating the motors task, they look left and right or up and down and they found other opportunities that their boss, their
company, their team, could capitalize on. There are lots of possibilities for this. Think about all the energy that’s wasted. Think about the cost of
customer acquisition. Think about how difficult it was to get that customer on board the first time. Wouldn’t you want to have extraordinary internal account development to make sure that every single
opportunity to save energy is harvested inside that
existing customer relationship? Or would you rather spend your time trying to get strangers to buy from you? This empowerment of
technical professionals, and customer service people,
and product managers, and web designers, and marketing people, very, very important ingredients to making your organization successful as you professional sell efficiency solutions. Tony Robbins, probably one of the most well-known public speakers in personal power,
motivation, and success, one of his favorite statements
is one of my favorites, which is the quality of
your life is directly related to the quality
of the questions you ask. I think this is directly
related to our mission of instructing you today. I’d like to start with a
question, a simple question. Is what you’re doing now working? Let’s take a finer look at that. First of all, let’s talk about brochures. How often does a brochure make a customer fall in love with efficiency? I mean, honestly. You’ve been probably
producing and publishing and disseminating brochures
for your entire career. Does it make a difference? Aside from the quality
of the brochure itself, quality of the artwork, the photographs, that sort of thing, the quality of the design. How many people really fall
in love with efficiency because they read something in a brochure? I heard a funny story,
awhile back actually, from an international HVAC manufacturer, who had convened a focus
group of their masters class. These are rock stars who had contributed more than a million dollars in margin to the company in the preceding year. They asked the question, simple question. How many of these brochures
should we continue printing? They showed them a stack
of all the literature that the company had been disseminating throughout the world. Many of you, knowing
where I’m going with this, will probably be tempted
to say zero, right? Actually, the answer
was, maybe just a couple. Maybe the single sheets. The caveat that was
placed on that statement, maybe continue to produce
these couple of sheets, was that as long as
you don’t make us bring them into meetings with customers, because they’re distracting. You can imagine the feeling in the part of the marketing person who’s
put together these brochures. Holy cow, these are the rock stars. These are the top
performers of the company. They’re looking at the marketing brochures as being distractions? I actually did talk to one of
the people, just by accident, who was in that actual
meeting several months after I’d started telling that story. One of my students
announced that he actually had been at that meeting. He was one of the rock stars
that was in the focus group. He shared with me, he said, “You should have seen
the face of the woman “who was running the marketing department “after hearing all the rock stars say, “these brochures are distracting.” So think about it. Do a little naval gazing yourself and say, “Is the material we’re
handing out to people “helping or hurting us? “Is it distracting people or
getting them more on point?” On a related note, I gotta ask you a question. How often do you think technical studies really drive customers
to embrace efficiency? Think about it. What do you feel if someone
hands you a study like this? I was doing a keynote for
the Mechanical Services Contractors of America several years ago. One of my fellow presenters
later on in the day was telling his audience, I was actually in the
audience listening to him. He was telling his
audience and he had a slide very much like this up
on the wall and he said, “You could put the words up yours anywhere “in that document and never be called out. “Why? People don’t read them.” He said, “You could put up yours
as part of your template “and put it in every one of your proposals “and never be called out.” I mean, it’s kind of comic,
but it’s tragic comic. The fact of the matter is, there are so many
well-intentioned building technologists putting together a report so it’ll look just like this, and thinking that
they’re going to get an A because their term paper is the heaviest of all the other term
papers that are submitted by other vendors. When in actuality, the
customer’s looking at this, or I should say prospects,
they haven’t bought yet, prospects looking at this saying, “Ugh, I’ve gotta read this thing? “Or I have to pretend that I did.” Not a good outcome. The sad thing about it is, there’s probably some
good information in there. There are probably some compelling reasons that they should embrace this project. But hidden in 100 pages
of technical gobbledygook, those messages are likely to get lost. Never read. Neglected. Okay. How many customers base the decisions on saving the environment? Think about this one for a moment. You will have certain hotbeds
of environmental concern. Madison, Wisconsin. Berkeley, California. Santa Monica, California. Austin, Texas. Perhaps Cambridge, where
people really care about the environment. But I’ve gotta tell you something. If you go across the entire population, this is just in the U.S., same thing is probably true in Canada, and Europe, and Asia, there’s going to be a mixed
bag of how many people care about environmentalism. In fact, you’ll probably
find a faction of people that not only don’t care about it, but they’re actually
very suspicious of this. I remember awhile back, in fact this is a story that
made a chapter in my book, Selling Energy, Inspiring
Ideas and Getting More Projects Approved, this gentleman literally
told me to my face, all environmentalists are liars. When I asked him, “What do you mean? “What are you talking about?” He said, “They’re liars.” I said, “What makes you think that?” He said, “You know that part about the polar bears “drowning in the Arctic because
of the shrinking icecaps?” He said, “It’s gotta be a lie. “My family and I were just at Sea World. “Polar bears can swim. “My family and I were just there. “We saw them swimming. “They had beach balls on their noses “and they were having fun. “So if they’re lying about the polar bears “not being able to swim, “they’re lying about everything else.” Meanwhile, I’m thinking, this
guy’s probably off his meds. Back on earth, however,
there was a study done by my alma mater, the Wharton School, and the National Academy of Sciences, I think it was in 2013, when they put two lamps,
bulbs, for the uninitiated, put two lamps next to each other. One was an inefficient lamp, the other was a higher first-cost
premium efficiency lamp. When selected in that configuration, they gave each one of
the focus group members I think five dollars and said, “Which one of these lamps
would you like to buy?” An equal number of
moderates and conservatives decided that they would
purchase the more expensive lamp because when you did the math the energy savings would make
up for the higher first-cost, which is exactly the decision you’d like your customers to come to. Then they decided to redo the focus group. So they took this more efficient lamp and they put a
pro-environment sticker on it. And when they reran the experiment, it turns out that a
significantly lower number of conservatives purchased
the more expensive lamp. When they did the exit interviews, they found out that the common theme was we know it’s a more efficient lamp, however, we don’t want to put our money behind an ideology we don’t believe in. That’s kind of problematic. So now people are voting with their hearts instead of their minds. And if they’re opposed to
this environmental agenda, they’re going to look
beyond the rationality of buying a more expensive
higher first-cost lower operational cost lamp. So my suggestion after realizing
that sort of stuff happens, as predictable rationality happens, my suggestion is if you do have a deep environmental agenda I’d keep it a secret. Have like this little secret
handshake or something. You really never know
who you’re going to upset by going off on this environmental tangent when their political ideology may be absolutely in the other direction. Let’s talk about another question that you should be thinking about. How often do you think the promise of saving money drives decisions? You know, for years, for decades, utilities and vendors
have been approaching the marketplace with the message, save energy, save money, save energy, save money. Save energy, save money. Seems to be rational, right? The only problem is most
of the buying public is not rational. I only ask a question here in America, where this is being videotaped, are we known as a nation of savers? How about in Canada, our
neighbors to the north? They’re not much better. I think that the word spend-thrift might be more appropriate than saver when you’re talking about Americans. In fact, the last statistic I read was that credit card debt was three times what it was in 1994. That does not seem like the
symptoms of a saving nation. So if people are not that
careful with their own money, how much more careful do you think they’re going to be
with their bosses money? It’s not even their money. Not to mention the fact that so often there are several layers of management and lots of bureaucracy and probably inter-departmental politics that separate the person
taking the energy savings maneuver and where the savings
are actually showing up. So if you think that a
person’s going to miss his kids soccer game or his
daughters ballet lessons to stay late at night to read one of those 100 page reports I showed you a picture of a little while ago, just so he can approve a
project that’s going to save his bosses’ bosses’
bosses’ boss some money, or maybe some faceless shareholder, maybe in another continent
a couple of shekels, I don’t think so. You know, a rock star that I interviewed for a speech I was about to do, he put it really well. He was actually in the pacific northwest. He was selling lighting wrench fits to one of the large aerospace companies that had a lot property there, and he described to me, and I started my rock star interview with the same question I
start all of them with. To what do you attribute
your outside success in selling efficiency? He responded, first
sentence out of his mouth, “Well, I’ll tell you one thing. “I never use the word savings. “The word never even crosses my lips.” I was shocked because most
people in this business, who are rock stars in
selling energy efficiency, we’re not afraid of
using the word savings. In fact, they use it quite liberally. But this guy was totally
different and he said, “Mark, people in this
country don’t want to save. “They want to spend. “So what I do, is I figure out “what they want to spend their money on “and then I point to the waste “that they’re currently suffering “as a result of overspending
unnecessarily on utility bills “and then I have them visualize “what they could be
spending that money on, “because the spending is what
gives them emotional comfort.” He gave me the example, going into a big aerospace company, talking to vice president of operations, he gets there a little early, he chats up the secretary. He says, “Sally, you know, if this
company just were to fall “into ten thousand
dollars what do you think “they’d spend the money on?” And she goes chatting off about “this bathroom next to me is broken. “It’s been broken for half a year. “They don’t get around to fixing it. “So I gotta go all the way across “this million square foot warehouse, “past the leering workman
to use their bathroom, “because my bathroom’s broken. “Oh and by the way, while I’m out there, “I hear all the grumbling
about that second “electric forklift
charger that’s been broken “for six months also. “They say they don’t
have the money to fix it. “So if I were the emperer of the world, “I would fix the bathroom first, “then I’d fix the forklift charger. “I think you could
probably get both of those “done for ten thousand dollars. “How do you like that?” Of course, he was very happy to hear that. Because when he waltzed into the vice president of operations office, the first thing he says is, “You know John, I’ve
looked at your facility “and you’re wasting a lot of money “unnecessarily on the lighting. “It’s interesting, because
if you didn’t waste “all that money on the
lighting, who knows, “maybe you could fix the
bathroom in the lobby. “Maybe you could put the
second forklift charger “back into service and save yourself “some overhead dollars on the laborers “that have to try to do
all the work in a day “with a single forklift.” You can imagine the emotional response that that spikes from the
vice president of operations. It’s certainly better than saying, “If you do this lighting wrench fit, “I can save you 673
thousand kilowatt hours.” Which is a yardstick that the
vice president of operations is not used to using, and therefore is not going to
likely phase him in any way. Talk about other myths. How about rebates. I used to have a business. In fact, I was a CEO and
Founder of a business that was a rebate administrator. So we had two billion
square feet of clients for whom we filed
paperwork to get them back a lot of money from utilities
across the United States, and actually even into Canada. So, I can say what I’m about to say with reasonable authority. If you take a look at the way
rebates are typically used, a blunt instrument to try to bribe people into buying the right thing, not a great approach. If you do it the right way, where you actually take dollars that the customer would not necessarily think about putting out of their pocket, and incent them to go to the
next level of efficiency, that’s a good thing. Say they’re looking at model 100, and you can use a rebate to apply to get them to model 200, and model 200 is the higher first-cost, but a longer lifed, higher efficiency cost piece of equipment, that’s going to benefit the customer, it’s going to benefit the grid by putting some savings on the grid, that’s a good thing. That’s a wonderful
opportunity to use rebates. But if you’re like most sales people, not sales professionals, sales people, who use
rebates as a blunt instrument to try to bribe people into doing things, maybe even as the leading statement, “Hey, I’m here on behalf of the utility. “I can pay for something for 50%, “or you’ll get this for practically free.” I don’t think that that’s as effective as you might think it is. In fact, I’ll give you another example. Let’s imagine you’re trying
to sell energy efficiency to a commercial landlord, income property owner manager. And you’re leading with, “I think you should do
the lighting wrench fit.” And he comes back with, “My tenants pay all the electric. “That’s a crazy idea.” And your answer is, “But the utility will pay for 50% of it.” If he’s honest, he’s probably going to speak his mind and say, “Son, it was a crappy deal if
I had to pay for all of it, “because the tenants
would get all the savings. “If your utility pays for half of it, “it’s only half as crappy a deal. “So I’m still not interested.” If, on the other hand,
you went to them and said, “You know, do you have capex
cost recovery in your leases?” I’m getting a little bit ahead of myself, because capex cost recovery is a topic we’ll talk about later, but
essentially what it is, is this. If you have a piece of income property, and that property has
a lease with a tenant that enables the landlord
to charge the tenant for operating expenses
but it does not allow the landlord to charge
them for capital expenses like tenant fit house,
or a new parking lot, or a new chiller, you still
may be able to recover money from the tenants if
the capital expenditures meet one of three characteristics,
criteria if you will. One, if it’s a life safety improvement. After all, it’s their
fannies your saving, right? They should help you pay for it. Number two, government regulation. Government says we have to do it. We’re all in this boat together. Then tenants have to pay back the landlord for doing this improvement to the building that the tenants occupy. The third criterian is
a loophole big enough to dry a french-fry oil
powered school bus through. This is the one that says the landlord has reasonable expectation
that the contemplated capital improvement would reduce operating expenses for all tenants, he can actually pass that
through to the tenants as an operating expense, essentially, as additional rent. Wow. Imagine what this is. This means that you can take a landlord, who in the past, would say, “I’m not going to do any
of these improvements. “The tenants will get all the savings, “and it’ll be out of my pocket” and turn that landlord around
with one simple question. Do you have capex cost recovery? Can I see a copy of your model lease? Oh here it is, right
here in the definitions of operating expenses. The three exceptions
where capital expenses actually could be considered
allowable pass-through’s to tenants and one of them, look at that, is energy efficient equipment. Such as what I’m talking
about with you today. So you can actually not
only pass this cost through, but if you look a little
further down the paragraph, it may actually have a
provision that allows the landlord to charge
interest while the tenants are paying him back
amortizing the first cost of the improvement, he
could actually charge the tenants the interest
to reimburse the landlord for the interest he’d
have to pay a third-party to borrow the money to do this
improvement for the tenants. My most recent lease that
I signed in San Francisco, actually went one step further. It said that not only could
you charge the tenant interest that you had to pay in borrowing the money to accomplish this retrofit, but listen carefully, if you didn’t have to borrow the money, you could charge the tenant the interest that you would have had to pay if you had to borrow the money. Think about this for a second. Talk about making your
whole world go wiggly. You take a landlord who say’s, “I’m not going to spend my money investing “in something that’s going
to save my tenants money “while I can’t get the savings.” That situation, shake the
Etch-A-Sketch, draw a new picture. Now, the landlord’s going
to go to Bank of America, take money that had been
non-deployed working capital, let’s say a million bucks, earning one quarter of one
percent in the money market, put it into a brand new
chiller for his tenants, and now what happens? Now, he’s going to charge the tenants the interest that he
would have had to pay, had he had to borrow that
million dollars from the bank, or the equipment leasing company. So maybe he’s going to
charge them eight percent. Remember, he was getting
a quarter of a percent at Bank of America. Now he’s going to get eight
percent back from is tenants. So now he’s increased his interest rate to 32 times return that he used to get on that million dollars, while his tenants are paying him back for an improvement that he gets to keep at the end of the lease. The improvement that we’re
talking about there is a chiller. It may make the tenants more comfortable. Therefore, more productive. Therefore, more likely to renew. What if they left? Their operating expense is going to lower. He can raise the rent on the new tenant. So there’s a whole procession
of positive impacts that come from the idea
of looking creatively at these situations and realizing that the knee-jerk reactions of, I don’t want to pay for efficiency. My tenants will get all the savings. You need to shake the Etch-A-Sketch
and get a new picture. Just to finish up on the slide, don’t be lured into the idea or seduced into thinking that if you
don’t have a good rebate for your customer then it’s going to be a lackluster sales pitch. It really isn’t. You just have to think more creatively. (gentle keyboard music)