Green Marketing: Make Your Building Stand Out

Building Operating Management

Commercial real estate owners who make green building investments naturally want to benefit from them ΓÇö by attracting better tenants, securing longer leases, experiencing fewer vacancies, gaining a more positive public image and enjoying a competitive advantage in what is generally a commodity market.
To cash in on these benefits, however, building owners need to learn how to market their buildings to separate them from the pack. No single competitive strategy is right for every property. A companyΓÇÖs marketing needs to reflect its strategic vision, project management capability, available capital and corporate values.

The marketing also should reflect the reasons the building owner decided to build green in the first place. According to a McGraw-Hill Construction survey, about 70 percent of building owners build green to reduce energy costs, 60 percent want to make a positive environmental impact, and 53 percent hope to secure a competitive advantage. The task is to translate these triggers into a consistent set of marketing approaches that respond to tenant motivations.

In todayΓÇÖs environment, a companyΓÇÖs marketing must provide something remarkable just to get attention. Here are four strategies to consider:

1. Differentiate
   Building owners can use green design to differentiate their buildings from ones constructed with traditional principles. The main differentiators for green building owners are successful projects, satisfied clients and tenants, LEED certification, lower operating costs, delivering green building projects on conventional budgets and competitive rents. A developer usually needs to have attained at least a few of these key variables to develop major new projects in highly competitive situations.
   
   The degree to which a company is able to differentiate itself typically increases over the course of several green building projects. As one example, the Dockside Green project in Victoria, B.C., has committed to constructing all LEED Platinum residential and commercial buildings. This commitment has garnered favorable publicity across the U.S. and Canada.
   
2. Become the Low-cost Owner
   Given the tight budgets of many building projects and competitive rent structures in most urban areas, the ability of developers that use green technologies to compete on price is a valuable strategy. It may seem counterintuitive that a green building can be the low cost option, but by combining experience gained from previous projects, accurate product knowledge, good research, and local or state incentives, green building developers can use green to become known as an area's low cost developer.
   
   Low-cost advantages can have more of an impact than even branding as a way to compete in the marketplace, but most companies do not have the discipline or skill to operate in the low-cost fashion. A good example of the competitive advantage of lower cost of operations is the almost unblemished success record of Southwest Airlines, profitable every year since 1972. For Southwest, the low prices made possible by lower operating costs have become the primary brand.
   
   In terms of buildings, an example of a focus on low-cost is a company called Workstage, which targets the corporate ΓÇ£build-to-suitΓÇ¥ market. Based in Grand Rapids, Mich., Workstage aims to wring out extra costs of green buildings by standardizing every element of the design and construction process. They use interchangeable modules and like-minded architect-engineer teams for each project. Workstage's corporate and institutional clients want green buildings, but they do not want to spend an extra penny to get this benefit.
   
3. Target Particular Markets
   Often, a developer or property manager will try to target too many clients while not focusing on the clients it really wants. Points of focus can include:
   
   
   • Regional versus national markets. Developers may compete nationally by narrowing their focus to one target market, such as mixed-use urban infill, brownfield redevelopment, suburban green offices or ΓÇ£specΓÇ¥ biotech laboratories.
     
   • Client types. A developer may take aim at smaller clients, businesses with risk-taking profiles or companies distinguished by strong cultures and values of sustainability. Identifying a company with a CEO committed to sustainability is often a huge competitive advantage.
     
   • Building or project types, or vertical markets. Consider focusing on categories such as office buildings, public service facilities, secondary education, higher education, health care, labs, cultural centers, retail, hospitality or industrial. Building types likely to be affected in the future by higher peak-period electricity rates might be good candidates for energy-efficiency investments, particularly in states or utility service areas with significant incentives. In Oregon, for example, the stateΓÇÖs Business Energy Tax Credit, worth 25 percent of the initial cost of photovoltaic or energy-efficiency investments, can be passed through from a non-profit institution or government entity to a for-profit tax-paying company, on a dollar for dollar basis, making it available for all projects in the state.
     
   • Signature green measures. These could include items such as photovoltaics or green roofs that a developer, owner or manager commits to bring into play on each building. While it can be risky for developers and designers to always bring certain technologies to their projects, it is more dangerous not to be known for anything in particular. Branding a company with specific green technology solutions for particular building types and sizes can be an effective marketing measure, allowing such companies to at least make the short list for interviews.
     
4. Build a Brand Image
   In todayΓÇÖs commercial world, companies must create a brand that incorporates the key differences in their product or service offerings. A developer might want to be thought of as the leading-edge property owner in terms of energy-efficiency or as the most environmentally responsible landlord. This narrows the market but sharply defines the company to buyers who value that attribute. What defines a brand in the green building marketplace?

A brand is a story told between marketer and clients, between developer and tenant. The storytelling should focus on the features of the project, including the experience of working in the space.


A brand sells an experience or a series of benefits to the consumer. People must be led from hearing about the value of the features to understanding how they will benefit from them.


A brand delivers on its promises. For example, in a LEED Gold-certified apartment building, the presence of a trash room with recycling bins on each floor would demonstrate daily that the building is green. A green roof on the second story, the bamboo flooring in the kitchen, and dual-flush toilets would reinforce the notion that the building delivers on its promise to be green.


A brand walks the talk. Consumers expect sellers to live by the values of what they are selling. A green developer should have offices in a green building. A green developer should be promoting sustainability in all its activities, not just in a particular project.


A brand communicates its differences effectively. The average adult is bombarded with up to 2,000 commercial messages daily. Getting through the clutter with effective communications is an art. Most savvy developers, owners and managers use public relations firms and sponsor a continuing dialog with the marketplace as an integral part of their marketing effort.

Almost without exception, there are no real brands in the green building marketplace today. While a developer can sell GE or Whirlpool appliances to residential buyers, the lack of name recognition for most green technologies forces the developer, owner or manager to become the brand. Most firms are ill-equipped to take on this role.

Marketing as an Evolving Strategy
To compete effectively, property owners, managers and developers should understand how their marketing should evolve:

• Choose a strategy that incorporates high levels of differentiation or lower overall costs, with explicit focus on particular market segments that might include geographic, project type, owner type, psychographic profile, project size, specific technological approach or signature green measures.
  
• Reinforce this strategy internally and externally so that it becomes recognizable as a brand identity. Internal reinforcement includes training and certification of employees as LEED Accredited Professionals, for example; external reinforcement includes public relations activities (including green development and management awards) to increase the visibility of the firm and its key players.
  
• Consider developing proprietary tools for measuring sustainability (beyond a LEED building rating), as part of a property branding approach. Along with these tools, firms should develop methods to successfully execute LEED projects without incurring additional costs.
  
• Form close working alliances with contractors and design professionals to ensure that green building projects will actually get built within prevailing budget, time, technology options and resource constraints.

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