Know-How Exchange : Strategy

Hi Randall,

Really interesting, but tough question! I can give my first reaction now, and hopefully you'll get something out of such 'blink' by many of our colleagues....

You mentioned the price differential being a problem, but also the proven effectiveness for the product. It appears straightforward to come up with a customer value calculation for different segments; i.e. actually calculate how much eg lowering the temperature from 116 to 93 degrees is worth in economic savings to a target customer. You can then advertise such estimates in trade journals; this will make it much easier to interest purchasing managers in these companies and help them justify paying the higher price. At the same time, I would pitch benefits to employees and the enviroment to HRmanagers and end users in a much more image/emotional based advertising in different media.

Hope this helps,

To summarize, you have a high price product, you don't have a lot of budget, and you want to know how to spend your last money to start the ball rolling.

1) You need to find someone who would like to walk the talk when it comes to saving energy (e.g. decreasing the use of aircon). You can do their whole house or one floor of an office, then if they liked it, to endorse it to the business community and networks.

2) New products like yours are hard to sell. You need a lot of testimonials from real experience. Therefore, your company needs to install a lot of these "tint" either for trial or for free, instead of expensive ads. Let the one who benefited be the one to cascade this "great invention".

3) Possible endorsers and those who will enjoy the free trial would include power generation officials, environmentally geared politician, science centers, science schools.

4) Your product is like the "energy efficient lights" of today. Their message is that it may cost more now to purchase, but it will save a lot of dollars in the long run.

5) You may want to target those individuals who invest in solar panels for their house. Their thinking pattern is more of the long term benefit and they would surely be attracted to save even more with your product.

6) There are Residential Builders who claims that the houses they are constructing are totally energy efficient. They too might be interested to try your product.

Your product is not for everyone therefore mass advertising may not be the right solution for you plus the fact that trimedia costs more. Find a niche first, and concentrate on it.

How is it sold? I'd focus on the A/D (Architectural Design) community as this is where you can sell it once but get multiple opportunities.

How is it sampled? To work with the architects you need a binder, with its CSI division on end. You fight for shelf space in their library like fritos in a grocer.

Create a "lunch & learn" presentation that gives the architect their required education credits. It has to be done with AIA, costs about $2K. It has to be (at least what is submitted to AIA) non commercial-- but you have real fodder for content here. One of my manufacturers had one, I naively sent out a broadcast fax -- and got such a response I was doing them daily for weeks.

I have a rep agency that focuses on building products. If distribution isn't via reps with that kind of focus-- their sales force might need changing.

The US Green Building Council www.usgbc.org is considered the "most reliable" of all green rating systems. Check out their window recommendations. I'm at a loss for the exact name, but their only accepted window has a film as you describe. LEED EB (existing building) would be a good place for your product. (commercially)

Sun is a huge factor in Colorado-- mountain home owners build for the expansive views, huge windows, no blinds.

One of my products shows in TV shows-- the response is minimal. People inquire via website, and are basically looking only. You spend a lot of time qualifying them, and their budget is small.

Hope that helps, Carol
Sell Well and Prosper tm

In reading others posts-- I can give you more links.

To work with building owners, target BOMA (Bldg Owners Managers), and IFMA (facility managers).

Many areas require energy efficient windows. Some of those are locked specs -- here only low E windows are allowed. (the name I couldn't recall above). Trying to market to home builders could be a dead end if they are mandated to use another product. I was an architectural rep for a window line that while energy efficient wasn't low E-- it was a dead end. Your market is existing buildings.

I can give you the major enviro trade shows -- but I think their longer, more broad based sales.

The govt is the largest customer of the US Green Building Council. (I was a founder of the Co Chapter and served on the board 5 years) Without the govt-- there would be no USGBC. Green Globes is our competing system-- but the govt came out saying USGBC is the most reliable. I have used some of their slides in my "green marketing for dummies" presentation. At the end of projects they must list the green attributes and "opportunities missed" (green opportunties). To comment to one above post-- ALL govt agencies are mandated to operate in an enviro manner.

Energy is the low lying fruit in environmental construction. Its fun to market as it sells itself. You might also find this article helpful. https://www.marketingprofs.com/7/avoid-green-marketing-myopia-ottman-staffo...

My thesis is on green marketing and how its evolved the past 10 years.

Sell Well and Prosper tm

Hello,

Interesting question.

I rebuilt my house several years ago. The biggest influencers were my Architectural firm and my contractor.

They are designing and installing the most new and replacment windows for homes.

I live in NY and I know the gas company here offers rebates for energy efficcient appliences etc. The 100+ oil companies are doing the same.

Don't let the higher price be an issue in your marketing. It is a one time cost but they offer years of savings. Energy is one of our biggest cost homeowners face eash month. What are the monthly savings each month? Life time value/savings is the key for the higher price.

With a limited budget I would focus on the Architectural Firms , contractors, and energy companies. Educate the public thru the environmental fimrs first then when you have more marketing dollars the general public. Most of the public will reley on the advise of thire experts.

There are many trade pubs you can send press releases too and attend their tradeshow. Here are 3 tradeshow sites. Tsnn.com and Majorexhibithalls.com
Publicshows.com


If your client is 100% confident about the savings offer a money back guarantee.

Thank you

Dear Randall

I’d like to offer a couple of perspectives on this, one from my background in selling energy conservation (And related) products and one from a specialist glass manufacturer. I’ll deal with the glass example first as it was as so specialised and needed a very fine niche solution.

This safety glass company had developed a new product. I guess that their technicians got fed up making glass which would withstand 9mm ammo, AK47 bullets, SA 80 high velocity rounds and latterly RPG proof (!) glass, so they developed a glass which had different properties when force was applied from different sides. The thinking was that if a building is set on fire, bullet proof glass would trap people inside, so with this one, they could smash their way out. The problem was its cost and the availability of other solutions such as having windows which could be pushed out or opened.

I reviewed the marketing plan and the material produced with the UK based finance director. After the presentation, not being someone who regularly packs a Smith and Wesson for work, I wryly said that, “Only the Americans could develop bullet-proof glass which allows you to fire back” Only no one had thought of that –it was too outrageous to contemplate. So, after a few direct approaches to the relevant agencies, more tests and discussions, the product started a new life. If, in the future you are silly enough to take a pot-shot at an American Embassy, don’t be surprised if your bullet bounces off the window. And don’t be surprised if you get a withering response of automatic fire from the same window, from those inside the building!

The point here is that there are angles for your glass coating which will hit someone’s hot buttons. All we’ve got to do is to determine what they are. By the way – they’ll probably divide into headline or publicity grabbing initiatives and niche points within a specific application which will be of value to a vertical market. The final point on this was that after using the initial “Interesting” feature to get into conversation, the sales was progressed by conventional sales people on the ground and face to face – the benefits couldn’t be conveyed via literature or images without assuming the scenario of use, i.e. making a Hollywood style clip of a blood-bath.

The energy conservation sales extended over a longer period and include the sale-killer of Revenue budgets and Capital budgets. You see, my hardware (Infra red thermometers, combustion analysers and data loggers) all had a payback argument. If they were able to spot a source of energy loss, the payback time could be calculated. This could be a couple of years on the expensive infra red stuff, through to a couple of weeks on the combustion analyser, where the user had a big fuel bill.

The problem was that a cost saving of, say $75,000 per annum on a fuel bill of $1,500,000 was very impressive, but it was a saving on the revenue budget. The kit cost $5,000 and could thus be shown to pay for itself in two weeks, but the purchase cost has to be met from the capital budget. Never the two should mix. I went around battering my head out, trying to persuade the chief financial officers of major companies and local Government, that it was barking mad to be losing $70,000 a year through the lack of a $5,000 piece of instrumentation, but I and the chief engineer always got the same response – we’ll consider the purchase once it is budgeted for.

After about 3 months of this, I realised that I wasn’t going to win the argument, so I changed the sale from getting an order, now (ish), to ensuring that the item went in the next budget. I think that I must have done about 120 like that – zero stress, non-sales, whilst ensuring that I met my target from things which were at least in someone’s budget! Then the new financial year arrived and in 3 months, I outsold all 10 other sales people added together for the entire year on one product alone.

As your coating has a capital cost and a revenue payback, maybe you are hitting the same barrier. My example above wouldn’t have worked if I’d just mailed the guys, or let them read my adverts in “Energy Manager” I needed to give a demonstration, ask the questions and discover their individual situation. I had to show them that the kit worked and how effective it was. I also had to close on whatever I could close on to get a commitment which would last for 3-9 months. Then I had to agree a follow –up call, perhaps another visit and a second demo and so on. In other words, I had stretched out our usual one-off sale into a major-capital goods sale, with a totally different dynamic. It was hard work which would have been made a lot easier with a decent CRM system to track what I was doing, but it paid the bills. (For a Ferrari if I remember correctly)

We also had so-called tangential benefits for all our products which could not so easily utilise revenue / return models to justify the purchase. For instance, for service engineers and consultants, they enhanced the professionalism with which they carried out a task and had an unquantifiable benefit in terms of efficiency and the cost they could charge. It strikes me that there must be many benefits to your coating in some sort of hierarchy. Few of these, by themselves would sell the product. Surely it is only once a product becomes an acclaimed success that other people will buy from advertising or press releases, basing their decision to purchase on the happy experience of other users.

As there is a defined market for optical planar-surface impact energy reduction coatings (Tinted windows!) which is addressed by a wide number of vendors and as there is no competition in the specification range your client is fortunate enough to own, one must come to the conclusion that the originality of the spec and the entire benefits of the USP’s must be lost to the readers of the campaigns. Having discovered the price, it appears to be likely that they simply went to an alternative vendor of plain old Tinted Glass. Or did nothing.

It is no coincidence that for about 30 years, when it was relatively expensive, double glazing was sold through a variety of direct sales organisations, some of which used frankly unscrupulous techniques to gain an order. It used to be said that if you were lonely, all you had to do was make ten enquiries of ten double glazing firms and you’d have the undivided attention of a “friend” in your home for at least 8 hours on ten successive nights if didn’t sign an order. Features and benefits, even in well crafted adverts don’t sell themselves unless a range of conditions are met first. One of those conditions is penetration of the market another is the familiarity with the concept. As your product has neither of these, you are likely to need to go through the grind of the following: advertise / promote, gain enquiries, raise interest, prove the concept, close the sale.

If this is what it takes, the shorter and as you Americans say, the more impactful (!) the presentation, the better. Five or six questions about the prospects situation to reveal their problems which you can solve should do it. Then the demonstration in a suite or, even better with a portable rig. Too bright? Look at the reduction on this meter. Too hot? See how the glass reduces the reading on this infra-red thermometer. (Partly thanks to me, they now cost $250 rather than $5,000!) Air-con on all the time – look at these readings taken from a data logger of a test property, before and after the coating. And so on. Answer objections and then close. If the purchaser is a company, an agency or an architectural practice, then close on the intent and work out how to follow the thing to its conclusion at budget time.

I hope that you can dredge something relevant from this waffle!

Best wishes


Steve Alker
SalesVision

Randall

I think there are two steps to sales development for this product.

The first is to get the product category onto the buyers agenda.

The second is to get your product selected as the category leader, and, although it is more expensive, prospectively as the best value for money.

Let's deal with the second point first. You've mentioned a price differential but haven't mentioned a performance differential.

What, if any, performance differential exists that could justify the selection of your client's product versus the competition?

Could you (or the client) develop a series of models for "typical" installations in various places, for example, a house, an office, a school, in, say, California, Texas, New York, Alaska to reflect what happens in different climates, to demonstrate the likely energy cost savings between untreated windows, windows treated with a lower priced product, and windows treated with your client's product?

Getting the product category on the agenda has to be a function of the energy usage reduction which has two major benefits:

1. The reduction in energy consumption for heating and cooling has a resultant cost saving (cost of energy, plus reduced wear and tear on heating/cooling equipment which gets used less or at a lower duty cycle.
   
2. The reduced energy usage means a REDUCED CARBON FOOTPRINT. This, surely, must be a very important and valid argument given the concerns about global warming and climate change on an unprecedented scale.

Carbon accounting should be just as much part of your sales argument as cost accounting. And ANY energy usage reduction means less carbon emission as the two are inextricably linked.

Ultimately in many countries carbon taxes will mean there is a double whammy with energy usage and energy usage reduction. The carbon emissions will be monetised twice - once with the utility bill, and again with a carbon emissions tax.

Oh, and WHEN, not IF a carbon tax is brought in, getting products that reduce emissions and costs will be harder as more people will be in line to take delivery - so getting in now gets the savings happening earlier and means the property is going to be carbon-efficient BEFORE any legislation forces the introduction of greater carbon efficiency.

Imagine a what a Gore presidency could introduce in its first term...

Hope that helps.

ChrisB

I'm going to offer an entirely different slant on the strategy.
Whereas there are a number of strong rational selling points that can and should be made for this product, maybe you should be thinking about the emotional hot buttons. Any claim you make today is something that will probably be copied tomorrow. Uniquely building your story around an emotional benefit is much more difficult to copy. Furthermore, providing the consumer with some relevant, identifiable emotional tug will help any advertising you do stand apart from most advertising in the home improvement category.

The enemy is heat. Think of it as something that robs consumers of many things besides money....i.e. comfort,
and peace of mind. Right away I think of coming home to a hot house after a hard day. Or having people over and watching them sweat while trying to look like they're enjoying my company. There might be a snob or status appeal that can be associated with your product., given that it is priced higher than most. Get the picture?

Come up with a number of these besides the obvious "saves energy, saves money" claims and build stories around them ...stories that put the potential users into the situation you're describing. You can go with your best hunch or test them in a focus group. Either way, I think you'll be further ahead in the long run.

Jim Signorelli

'The potential for an energy crisis has never been higher. Oil prices have recently exceeded $30 per barrel and they may continue to increase.' This was part of the introduction of an article published in Oil & Gas Journal in February 2003.
Well today oil prices have reached $70 per barrel and will most surely continue to rise. As one might expect, the cost of crude oil has a direct effect on
the cost of all other forms of energy, such as electricity, natural gas, propane and fuel oil.
It also has a direct effect on management fees collected by hospitality management companies who are constantly looking a (new) ways to save energy.
If your product can contribute to maintaining comfortable room temperatures, guaranteeing occupant comfort while saving valuable energy, it will be bought by those companies/their contractors.
And i would go to the sunniest and hottest place i know the Middle East to promote this product to each and every hotel management company (they ALL have a regional office there) and their local contractors. Then through proxy, your products will be known world wide.
Finally the cost of buying you mention is not a problem provided that on the mid/long term energy costs are significantly caped/saved.
Hope it helps,
JP

Hi Randall

great suggestions from the experts, my 2 cents worth...

what is the single most benefit this product delivers to the end-consumer? respite from heat; be it automobile user or home user or mutistoried building users. so your positioning should be centered around the concept of a product that "gives comfort to you, ensures a better world for your family". this is the intangible benefit.

the tangible benefit is this film actually is a cost-saving mechanism on utility (for home/building) or gas expenses (for automobiles) over a lifetime. how much does it save?? you need to come to a standard savings. for example we know that energy-saving-bulbs saves 75% of electricity expense. you need to create something similar for this film so that it is clear to the end-user what benefit s/he is getting by using this. you should have 2 figures one each for automobile and house/building.

the sales channels are mainly two folds

a. Architectural firm
b. Automobile dealership/spare-parts outlets
c. Government building code and energy authority (influencer/policy maker)

for channel a and b you can arrange for demo sessions at each potential channel, whereby you show the performance of this film. you can develop small models whereby the potential channel client has a first hand experience of performance of your product vs. competition vs no product. during these demo sessions, make sure to invite the finance guys of the channels so that they are aware of the one-time cost implications and they include it in their next budget (like steve mentioned).

also show the ease of installation and maintanance of this film. what happens if its scratched?? where do you apply it, glass pane facing outside or inside.

you can also tie-up with a financial institutions to create a mechanism so that either the channel partners and the end-users can pay for the "one-time cost" in EMI and you can leverage on this feature that one pays the EMI from the savings one makes using this film.

for the channel c, you actually need to lobby with the government agencies to endorse you product and insert its usage at least for all government infrastructures (the bush admin will glad to do as this will help them to deflect some criticism of its being non-climate friendly admin ;-)). if you can pull this off, then you will witness a big jump in your sales, off-course then you have convince the govt. to take your product leaving competiton.

hope this helps..

cheers!

Dear Randall

Reading Carol’s postings (I just love her language, “Fighting for shelf space ---like Frito’s in a grocery”) it made me recall the length of time the indirect approach took to mature for my energy products. It was perhaps longer than your project encompasses, unless you can generate some sales and some revenue now. That’s why I moved towards the idea of utilising a direct sales force. They are inexpensive to hire, time consuming to train and expensive to pay, but as that is payment on results (Orders) then it’s just a chunk of delivered margin. You could probably pick up an entire commission only sales team from within the industry from the trade press.

I introduced the energy conservation products we manufactured to Government agencies in the UK and all the major markets in Europe. Getting approval from TUV in Germany and the Swiss authorities took over a year, but it did open up their markets to the specification of our product. In the UK, the route was slightly faster and we got approval with the government buying agency in about 9 months. I made target meanwhile by doing one-off sales to end users who had a budget and as I mentioned with deferred sales to those who didn’t yet have a budget.

In the USA I recruited Honeywell’s energy division (Largely commercial property and service) and Westinghouse (Big industrial stuff) to act as distributors and they channelled the product for approval with the Navy, the Army, The USAF, State Government and Central Government – I’d never have found my way round that lot!

From a slow start – they too had their end user potential customers; we ramped up to over 1000 units a year, making our little company the world’s largest manufacturer of combustion analysers by volume.

I covered the short term bases by letting our 15 direct sales people loose on the product (After suitable training and repeated refreshers) touring our European and Middle East distributors on product training and recruiting smaller domestic and commercial heating and ventilation supply companies to sell the analyser to their existing clients. In the short term, we racked up another 1000 through the direct channel and the same again through distribution.

The costs of the exercise were all associated with time and collateral. That was time to get them to sign contracts, time to train, sales materials and so on. They paid for the modest stock at a 25% discount, thus helping our cash-flow and developed further sales off their own bat. The interest the product engendered made them keen to place local adverts as they could easily secure a demonstration, impress the pants of their customer and also secure a few thousand pounds of additional sales for their conventional H&V products and high-margin spares.

It strikes me that you might be able to identify similar synergies for your product which can then be slotted into a multi-level sales plan:

Short term direct sales initiative to bring in revenue

Short to medium term direct-sales team recruitment for wider commission sales

Medium term initiative to get distribution channels trained and active

Medium to longer term specification approval for “small” government purchases.

Longer term approval through major agencies, architects and consulting engineers for the Guggenheim and the Whitehouse scale of things.

On the latter two – were they lucky breaks? Did the firm know the right contacts? What was the sales story?

Over here a chance sale to the National Gallery would lead to introductions to the Tate, Tate Britain and Tate Modern, the British Museum etc. There are two other over heated “Beacon” constructions which spring to mind. One is Portcullis House, an extension to the Houses of Parliament which allows MP’s to enjoy luxury office accommodation at a cost of 10 times that available in the commercial sector and the New Scottish Parliament building, which apart from being 20 times over budget and 4 years late in delivery boils its users when it is not falling down. There are hundreds more in the public arena.

We have 40 “New Labour”, Academy Schools under construction courtesy of Tony Blair’s largess with the taxpayer’s money. Architecturally, they are fantastic to look at and some were designed by Norman Foster and Lord Rodgers. The first three are almost unusable for 6 months of the year due to solar warming! A decent distributor over here would be on to them like a ferret up a drainpipe. (Quaint English racing game amongst rustic locals where bets are placed and blood feuds originate)

My brother in law is a partner at Foster associates – he’s got several fantastic projects to his credit. The covered courtyard at the British Museum (Vast Glass thing!) and the Terminal Building at London Stanstead Airport are examples. Both are gems. Both are, er, too hot in the summer ---all that glass! His third masterpiece is the Bankside PowerStation conversion to an art gallery. As that’s a 70 year-old building and consists of about 100,000,000 tonnes of re-enforced concrete, there’s no application for the product there. Well, you lose some!

I can imagine that with the right distributors, trained in all the potential applications for the product, you would in a relatively short space of time have a large team, paid on results, conducting a lot of presentations where there are genuine applications for a high spec product with demonstrable benefits.

I don’t think that you can achieve this level of commitment from promotional material or attempts to get product approval from a bare specification, regardless of what facts and figures you back it up with.

I hope that again, you can distil some more appropriate synergies from these ideas


Best wishes


Steve Alker
SalesVision

I did not go into detail reading the other posts, because I wanted to go with my initial thoughts from your posting. After I enter this, I will go back and make other suggestions to assist with what others have commented on as well.

My first reaction is that you should find other ways to distribute/promote the product (not necessarily to the end-user).

Maybe you should find some high-end developers and contractors that could offer this product to their clients. I know in my area there are a few select developers that do the "biggest" jobs around & of course spend lots of money on them. Even those developers that do residential, the window tints could be an "upgrade" that they offer their customers. Maybe even offer the contractors an incentive program to make a small profit off of all the window tints they sell.

You could also do some cross-promoting with electrical companies and other energy-saving companies. I'm sure that they are big on promoting items like that. I know my propane delivery company sends me energy-saving tips once or twice a year to save money. Maybe the company could sponsor a brochure to be distributed by those organizations.

How about window manufacturers? I don't know much about them, but would they be willing to sell it as an accessory? If not, I would assume window installers could.

In your marketing materials, you may want to focus on how much this product saves you (even though the upfront cost is steep). For example, maybe have a chart of costs over a one-year, two-year & five-year period. Showing how much people save and at what point they break-even. You should also make all the accredidations stand-out (passed all blast tests, etc).

I don't know how expensive the product is, but does the manufacturer offer a financing plan for the product? If not, maybe there is a company you can find to recommend financing through.

I definitely think if you have it in the budget, you should consider making a product donation to one of the houses on "ABC's Extreme Home Makeover". They are very good at "mentioning" companies that provide unique products. It would be perfect for a home of someone who is ill and needs a temp-controlled atmosphere - and generally speaking, extreme home-makeover tends to select families with someone who has a life-threatening illness.

That's what I have for now. I hope it helps. And I hope it wasn't too repetitive of what others have suggested.

Randall,

I see two different challenges here. I would classify them as:

1. How to sell a "spend-money-to-save-money" product. Not easy, but there are some models out there that have been more successful than others.

2. How to move from the very small DIY niche to the DI4M market, where everyone can earn bigger margins and drive greater volume in the long run.

I have actually had experience in both of those and have a few thoughts. Unfortunately, they are not easy to explain in a few hundred words. If you'll contact me off-line, I'll be glad to share some relevant war stories (and ideas for your client). I've worked in home-improvement and energy-saving before, including some serious contact with the folks at EPA and HUD who deal with the EnergyStar program.

hi Randall

some more ideas..

develop an interactive website where the end consumers can input various elements like the house size, no of windows, size of windows, window facings (south,east etc.), and current electricity consumption pattern and bills. once these inputs are given, the interactive program at the site will give the savings to be made by installing your film and the estimated costs of installations (the EMI amount can also be displayed, if chosen by consumer). this will create an initial consumer experience and will create positive impression as well as consumer pull (hopefully).

also in your webpage, give a list of automobile dealers, retail points, and architectural firms by location, so that the consumers can easily refer to those places.

a costly proposition, you can also create some touchpoints nationwide, where the consumers can visit and see for themselves the efficacy/effects of this film.

hope this helps

cheers!