Mark Jewell's Blog: Selling Energy, page 310

Kaizen Productivity Philosophy

To reach a high level of productivity, you need to make improvement a lifestyle. I share articles on productivity every week. My hope is that many of these tips and tricks save you time and help you work more efficiently; however, each of us has our own unique situation and there’s a lot of things we can do to make our lives more efficient – things that are not universal best practices that can be found online.

Today, I’d like to introduce a productivity philosophy called “Kaizen.” This philosophy was developed in Japan, and it essentially proposes that we seek “constant and continual improvement.” At its core, it’s really a philosophy of mindfulness. As you go about your daily activities, think about ways in which you can improve and streamline the process for the future. Do you repeat certain tasks on a regular basis? Can you find a way to standardize the process so you only have to do minimal work each time you do the task? If you keep this in mind as you go about your daily life, I am confident that you’ll find creative new ways to work more efficiently.

For more information on this topic, including actionable steps you can take to implement the Kaizen mindset, read this article from LifeHacker:

http://lifehacker.com/get-better-at-getting-better-the-kaizen-productivity-p-1672205148

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Be the Guide

Efficiency projects can be very complex. As an efficiency sales professional, it’s your job to guide your prospect through the project from start to finish. In many cases, your prospects will have plenty of other things on their plate. Leaving it to them to figure out how your offering will best fit their needs greatly decreases your chances of winning approvals.

So what does this mean in practice? It means that you need to present your value proposition as simply and clearly as possible. Moreover, you need to ensure that their understanding and enthusiasm persist for the entire duration of their approval process.

By the way, busy people need to be reminded – they actually like to be reminded – of what they need to do next. You should think of it as helping them, not bugging them. You present yourself and your project simply and clearly with an elevator pitch, a one-page proposal, and a concise financial summary. You then follow-up with intelligently timed phone calls, emails, etc. Don’t feel as if you’re being a pest – truly busy people actually appreciate having a “virtual executive assistant” to remind them of their most important and impactful tasks.
  

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Do Your Homework

The preparation you do before stepping into the meeting room can make or break a sale. You never know how many tricks you’re going to have to pull out of your sleeve to convince a prospect that your project is worth pursuing. So, be more prepared than you think you need to be to ensure that you’re equipped with tools to tackle any situation.

In addition to researching your prospects and their organization, you should consider what key metrics they might be using to measure their success. What are their decision-making drivers? A restaurant might measure their success based on how many meals they sell. A hotel might look at the number of rooms they fill in a given time period. A commercial property owner might look at vacancy and tenant churn. A farm might look at crop production per square foot of land. If you understand what your prospect is using to measure his or her success, you can figure out how your product or service might positively affect these key metrics. How can you reframe your project to relate energy savings or other benefits to their success metrics?

Also be sure to look at their net profit margins (as discussed earlier this month) and talk to your past customers to see what other good outcomes may be associated with your energy efficiency maneuver. Herald any and all advantages the next time you talk to a person in that same segment that you're trying to convince to do a similar project.

  

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Cap Ex Reserves

Yesterday, we talked about the types of potential Income Statement benefits you might choose to discuss with your prospects. Today, we’ll delve into the concept of Cap Ex Reserves, a topic you should really understand when approaching an income-producing property with an efficiency project…especially one where the tenants presently pay the utility bills and would benefit from efficiency maneuvers.

An income property owner who offers space for lease will inevitably need to address capital equipment failures from time to time. Most leases treat any expenses incurred to replace this capital equipment as the landlord’s responsibility, figuring that maintaining the infrastructure of the property is an inevitable “cost of doing business” when you earn your living renting space to others for a profit. Income properties typically maintain a Cap Ex Reserve account to handle these sorts of expenditures.

Interestingly enough, if your prospect has Cap Ex Cost Recovery language in his or her lease (as discussed in the Cap Ex Loophole blog last month), it may be possible to replace that soon-to-fail equipment as part of an “energy efficiency” agenda before it actually stops working. That way, while your prospect might use Cap Ex Reserve dollars to purchase the replacement equipment, they could recoup that capital within a reasonable span of time by recapturing dollars that the tenants are presently squandering in unnecessarily high utility bills. Essentially, the landlord would assess the tenants for an amount (less than or) equal to the reduction those tenants are likely to see in their utility bills, essentially repurposing those utility savings so that they amortize the cost of the new equipment. In some cases, the lease even allows the landlord to charge a specified interest rate to cover the “carrying cost” of waiting for the principal to be fully reimbursed by the tenants.

A few years ago in New York City, former Mayor Bloomberg convened a large task force of developers to explore the opportunities for optimizing the use of this so-called Cap Ex Cost Recovery provision to accomplish energy-saving retrofits in tenant spaces in the middle of existing leases. They came up with a new arrangement called the Energy Aligned Lease Clause. It said that if a landlord did an improvement that was projected to reduce operating expenses for the tenants, he/she could recover 80% of the projected savings in the form of additional rent and would pass the other 20% of the projected savings to the tenants. This approach would give the tenants a “buffer” equal to 20% of the projected savings in case the landlord’s engineers were overly sanguine about how much savings could be produced by the proposed retrofit.

The advantage of doing this, of course, is that you make the tenants more willing to participate in this Cap Ex Cost Recovery exercise without overly elongating the landlord’s payback period.  What would have otherwise been a four-year payback project might turn into a five-year payback project because the landlord is letting the tenants enjoy 20% of the savings. Still, if it increases tenant goodwill and allows the landlord to execute capital improvements that would have otherwise hit their Cap Ex Reserve Account without any hope of reimbursement, it's certainly worth doing.
  

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Income Statement Benefits

Energy efficiency can affect many line items on a business’ Income Statement (also known as the “Profit and Loss Statement” or “P&L”). If you look at the full picture through the lens of business acumen, you’ll see how effective it can be to discuss the potential P&L benefits of your efficiency project with your prospects. The following list gives you an idea of the types of line items that you may choose to discuss: 

More sales: If you install attractive LED lighting in a grocery store, for example, the store will likely see an increase in grocery sales.

Less payroll: If your efficiency solution increases productivity (as we have discussed in previous blogs), employees may be able to do more work in less time.

Less repairs/maintenance: A new, high-efficiency product usually requires less maintenance than an old, soon-to-fail one.

Less scrap: You may recall the story I told a few months ago about the aluminum windows and doors manufacturer that reduced scrap rate by 25%, effectively turning a 4.2-year payback into a 39-day payback.

Lower utilities: Of course, your efficiency product will probably have a positive effect on the utility bill, so this one will be included in virtually every case.

Higher rental rates: With all of the added benefits of efficiency, your prospect may be able to increase rental rates without deterring potential tenants.

Better tenant retention: An efficient building is more comfortable, more attractive, and requires less maintenance. All of these factors help retain existing tenants who might otherwise choose to move to a building that features the high-end amenities you are offering to your prospect.

Better tenant attraction: As in the case above, an efficient building is more comfortable and attractive than an inefficient one. Add in an ENERGY STAR® or LEED certification and you’ve got yourself a recipe for tenant attraction.

Less need for Cap Ex Reserves: This is a topic that warrants further discussion, so stay tuned for more on this tomorrow!

 

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How Full is Your Bucket?

Humans are, by nature, driven by emotion. Any savvy sales professional knows how important emotion is in the decision-making process. When you’re in a sales situation, your demeanor and tone can have a significant impact on the emotional state of your prospect. For this reason, it is vital that you stay positive and that you actively avoid anything negative (words, body language, facial expressions, etc.). Not only does positivity help your prospect get in the mindset to buy, it also helps you perform better – both in the sales setting and in your everyday life.

In Tom Rath and Donald O. Clifton’s best-selling book, How Full is Your Bucket?, the authors explore the concept of positivity through the “bucket” and “dipper” metaphors. The bucket represents your well being, and the dipper is used to add or subtract from your bucket. Positivity fills the bucket and negativity drains it. The object of this metaphor is to get you to think about how your actions affect the people around you. Are you filling your prospects’ buckets or are you leaving them half full? Is your own bucket full? What can you do to maintain positivity?

Here’s a summary from Amazon Books:

“How did you feel after your last interaction with another person?

“Did that person –  your spouse, best friend, coworker, or even a stranger – ‘Fill your bucket’ by making you feel more positive? Or did that person ‘dip from your bucket,’ leaving you more negative than before?

“The #1 New York Times and #1 BusinessWeek bestseller, How Full Is Your Bucket? reveals how even the briefest interactions affect your relationships, productivity, health, and longevity. Organized around a simple metaphor of a dipper and a bucket, and grounded in 50 years of research, this book will show you how to greatly increase the positive moments in your work and your life -- while reducing the negative.

“Filled with discoveries, powerful strategies, and engaging stories, How Full Is Your Bucket? is sure to inspire lasting changes and has all the makings of a timeless classic.”
 

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Weekly Recap, December 14, 2014

Monday: Read  Blue Ocean Strategy , by W. Chan Kim and Renee Mauborgne, and learn how to develop a business that taps into new marketplaces.




Tuesday: Learn how to use cash purchases and loans to pay for energy efficiency improvements. 




Wednesday: A continuation of Tuesday's blog, this article covers leases and performance contracting in the context of funding efficiency projects.




Thursday: Discover a simple question that can help you locate the best internal champion for your project.




Friday: Learn how to get your foot in the door with new prospects by offering benchmarking as a service. 




Saturday: Read this article from Business Insider and discover ten common bad habits that are detrimental to productivity.

 

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Things to Avoid

Becoming your most productive self is as much about avoiding productivity-killers as it is about actively employing best practices. We talk a lot about productivity-boosting strategies on this blog. Today, we’re going to look at productivity from the other end of the spectrum. If you can identify the habits that diminish your ability to be productive, you’ll be better positioned to rid them from your life (and on top of that, you’ll have more time to implement some of the other strategies we’ve discussed).

An article published on Business Insider this week suggests ten habits that are detrimental to our productivity. Some of these may seem obvious; however, it takes awareness to make change. Reading through this list and thinking about whether you’re a victim of these common habits is the first step toward ridding them from your life. Take a read and see if you identify with any of these productivity-killing habits:

http://www.businessinsider.com/bad-habits-that-are-killing-your-productivity-2014-12

 

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Foot in the Door

As I’m sure many of you know, in addition to efficiency-focused professional sales training, I also teach benchmarking workshops (both online and in-person). One of the workshops I teach is called, “Leveraging Benchmarking to Build Your Business.” As the title suggests, offering a benchmarking service is a fantastic way to build your existing efficiency business. It’s quick, it’s easy, and it’s a great way to get your foot in the door with new prospects.

There’s simply not enough space on this blog to go into all of the content of the workshop; however, I’d like to share with you a hypothetical scenario that demonstrates how offering to perform ENERGY STAR® Portfolio Manager® benchmarking can lead to new business. For the sake of example, suppose you are talking to a prospect that you met at a networking event…

Prospect: “Well, we kind of have our energy stuff under control.”
You: “What do you mean by that?”
Prospect: “We’re already energy-efficient.”
You: “How do you mean?”

[Notice that I’m using very open-ended questions. This allows you to get as much detail from your prospect as possible.]

Prospect: “We’ve had a very capable third-party property manager in charge of the building over the last five years and I think he’s got his eye on the ball in terms of the utility bills, and I bet he’s done some stuff for us to control our energy use.”
You: “You know, it’s interesting. If your building is as efficient as you think it is – and I have no reason to doubt that you’re right – maybe we should benchmark the building. Have you benchmarked the building yet?”
Prospect: “No, what’s that?”
You: “The ENERGY STAR Portfolio Manager tool has been around since the late Nineties, and over a quarter of a million buildings have been benchmarked using this tool. The top performing buildings receive the ENERGY STAR label. If your building is as efficient as you say it is – and again, I have no reason to doubt that – you may be in the 75th (or higher) percentile of energy performance when all other normalizing factors are taken into account. And if that were the case, then you would qualify for the prestigious ENERGY STAR label. Perhaps you’ve seen it on some of your neighbors’ buildings.”
Prospect: “Yeah, I think I’ve seen a couple of those blue stickers around the neighborhood.”
You: “Yep, those are the ones. All you have to do is score in the top 25% and you get that sticker of recognition.”
Prospect: “How much does it cost?”
You: “Well, I’ll benchmark the building at no cost as a courtesy to get to know you and your operation and so that you can see how we work. If we do find that you have a score of 75 or higher, then we’ll have to hire someone else (a licensed professional engineer or registered architect) to verify that the data we put into the tool was accurately entered, and assuming it was, you would receive your ENERGY STAR label shortly thereafter.”

Now, assuming your prospect takes you up on the offer, you’re most likely going to find out that they are not, in fact, an ENERGY STAR-qualifying building. In that case, you’ll go back to them with something like this:

You: “Well, I’ve got good news and bad news. Which do you want to hear first?”
Prospect: “The bad news!”
You: “The bad news is that you’re not quite an ENERGY STAR-qualifying building yet. However, the good news is that you are a 68, and on the ENERGY STAR scale, that’s only 7 points shy of the 75 that you need to get the label. After chatting with your engineering staff and office manager and other people who are familiar with how the building is operated and configured, I have reason to believe that there are a few things we could do fairly inexpensively so that this time next year you’ll actually have an ENERGY STAR-qualifying score. Would you be interested in pursuing some of those improvement options?”

And there you have it! If your prospect is wise, he or she would be open to a discussion, and you would be the first-choice vendor or service provider for the project.

If you’re interested in learning more about how benchmarking can help your efficiency business, I’m teaching a no-cost workshop through Pacific Gas and Electric in downtown San Francisco this coming Monday (December 15th). Here’s a link to register.

For those of you outside of PG&E territory, we have a shorter online version of the workshop available here.

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Who’s the Efficiency Person?

When you’re approaching a new organization with an efficiency project, you want to make sure you’re putting your project in front of the right people. We’ve talked about research, influencer maps, and other strategies for finding the decision-maker(s). Today, I’d like to share a question that is very effective in finding a valuable internal champion:

“Are there particular departments or individuals here that focus on energy efficiency?”

When you ask this question, be poised to write. They’re usually going to give you a rapid-fire list of people and departments (or at least you would hope they do). Once you have this information, go back to the drawing table. Research the people, see if you can find any previous efficiency projects that they’ve been involved with, figure out where they fit on the influencer map, and consider how you might approach them with a value proposition that resonates at their frequency. 

  

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