How to Sell Energy Projects Internally
As an energy, sustainability, and environmental consultant, I am constantly “pitching” projects to clients who can really benefit. Not benefit by saving the polar bear or the Amazon Rain Forest, but generating direct financial benefits. Not hypothetical or “blackboard,” but with real-life case studies. Convincing, overwhelming. I used to think this was a slam dunk to convince entities to set up such programs. But as I sit down with more and more business or municipal leaders, everyone agrees this approach is still a tough sell in-house. What can be done to make it easier for you to sell such a program (and increase your budget, too) to your corporate or municipal leaders?
The most common problem is that the person making the decision to allocate money to begin or expand an energy or sustainability program is probably somebody who may not understand what sustainability is or the value of energy conservation. The answer, it appears, would be to educate that person. The problem is that this takes time, something the executive simply does not have or a desire for. But to further your career, here are some helpful tips to sell such projects internally.
When your supervisors tell you that a project you are interested in “doesn’t fit in the budget,” it may mean that they don’t understand the true value of the project. There are two options: lower the cost and/or raise the value of the project in their eyes. You can lower your potential project’s cost, but then you increase the risk that the project will have a lower impact or value to the company and/or will fail.
The better solution is to re-position and re-communicate the proposed project to demonstrate value to those specific decision makers for what they consider important. This lends itself well to energy, which has many potential, diverse benefits.
Here is an example that I recently experienced. I made a presentation to a municipality focusing on street lights, and upgrading them to LEDs, for improved lighting using less electricity. I presented to the mayor, the Treasurer, and the head of the DPW. This is a fairly conservative town that does not like to take what they perceive as a “risk,” nor care about environmental or global concerns; a bottom line management style. In the entire presentation, I did not even once mention words like carbon footprint, greenhouse gases, or climate change. I stuck to financial benefits only. I presented a rough calculation that when all the street lights are switched, they would save at least $250,000 per year in avoided electricity costs (and more as rates increase in the future), money that could be spent elsewhere. I asked whether this was a significant savings and could be useful to their budget as their citizens demand more services. I honestly did not know if this was significant to them or not. The Treasurer chimed in quickly, yes, they sure can use the money not spent on energy for shortfalls in other areas. (They can’t raise taxes anymore.) She became a fan of the proposed project. I then mentioned that most LED vendors warranty their street lights for 7 years, meaning there would be much less maintenance needed to replace non-operational street lights. Would that be helpful, I asked? Yes, very much so, said the head of DPW. He said he currently had 2 fellows nearly full-time replacing broken lights and there were plenty of other tasks his department was behind on that he could use those two people. He now became a fan of the proposed project. Finally, I prepared a rough conservative financial analysis of the project, demonstrating that the project will likely have a return on investment of 14% per year. I joked and asked what bank offers such a return! In reality, they should have little problem getting a bond at a lower interest rate given this potential return. I also presented a calculation of what are the consequences of not doing the project, keeping the status quo. Over 7 years, the town would spend more money than if they did replace the street lights, not get the quarter million per year savings, and not free up the staff people. Now the Mayor himself saw the contrast and he got on board. Now, the entire group, skeptical about any new project, supported it because it brought value in the areas of greatest importance to each of them.
The key here is to understand the decision maker(s). What is important to each of them? What does each perceive as “value” to themselves personally or to the company or municipality? Remember that these values vary between people, based on their specific needs. Therefore, before bringing a proposed project to the attention of the decision makers, it is critical to assess each decision maker’s role and what is important to each one. You therefore need to think through what each believes is of value.
Therefore, the key is to focus on the decision makers’ needs or value system. It’s hard, but try to minimize inclusion of what you think is of value. Doing so may overload the information and “values” being transmitted to the decision makers. Too much information may be a turnoff and/or dilute the impact of the items of value to each.
This is how you will increase the value of your proposed product or service in the client’s eyes. Good luck. I hope you succeed in getting your proposed projects approved!
Marc Karell is the owner of Climate Change & Environmental Services, and has published a short flyer entitled The 9 Purely Business Reasons To Go Green. CCES can help you or your group prepare proposals and presentations concerning energy, sustainability, and environmental for internal review and approval, highlighting the many and specific values that it can give your entity. CCES can also manage and implement the projects to achieve those savings and values. We are here to help you succeed and meet your goals! Contact us today at karell@CCESworld.com or at 914-584-6720.
Why bring buildings online? What information can operations teams glean from real-time data that they can’t just get from the monthly data provided by utility companies? Click to learn more.
- Existing Building Technologies Combine for Increased Savings
- BuildingIQ's Meter Processing Flow
- 2014 Environmental Leader Product and Project Awards
- Increase the Value of Demand Response Through Automation
- Improve Your Company's Environment and Energy Performance
- Smart Companies Utilize Integrated Energy Solutions
- 2013-20114 Winter Polar Vortex
- How "Fixed" is the Fixed Price Product?
- Combined Heat and Power
- Let's Do The Math for DR
- Cut Costs and Improve Facility Operations with Energy Data
- Energy Procurement Strategies for Winter 2014 and 2015
- Energy Efficiency Requires Engineering Efficiency
- Integrated Building Optimization: A Crucial Convergence of Demand-side and Supply-Side Energy Management Strategies
- Driving Productivity and Profit with Industrial Energy Management