Selling sustainability in the home builder market

Published: 8 June 2021

Objective

Sustainability Victoria developed the Zero Net Carbon Homes (ZNC) pilot program to support the home builder market and has been working with some of Australia’s leading residential builders and a developer to support this group and the wider industry to develop and sell energy-efficient homes.

The goal of the ZNC Homes program was to design, construct and as-built verify (ensure that homes achieved their design briefs) 15 homes.

Outcomes

  • Research into consumer awareness and aspirations around including sustainability features in new homes contributed to the success of the ZNC Homes program in achieving more sales of sustainable homes by our program partners.
  • To date, 178 ZNC homes have been sold.
  • Program builders are actively offering and marketing ZNC homes as part of their product portfolios.
  • SJD Homes now up-spec's 30% of their homes to more sustainable homes.
  • Metricon focuses on comfort and energy efficiency and ran a successful competition, with the three winners upgrading to ZNC for no additional cost.
  • Stockland is taking a long-term, strategic approach to selling sustainability by considering making all new homes more sustainable and introducing an ‘opt-out’ clause, meaning that customers will have to actively drop standard sustainability inclusions.
  • Consumer awareness and demand for ZNC homes has grown and there is greater insight into selling sustainable features.
Exterior of the Metricon Delta 29MR home.

Introduction

For most of us, buying a house is the biggest purchase we will make in our lives. Navigating the sales process can be daunting for buyers looking to build their own home and they can soon find themselves inundated with many choices to make.

Research shows that buyers generally focus on getting a home design, layout and size to suit their lifestyle. Quality and comfort are rated higher than sustainability features. This could be because buyers do not understand the ongoing benefits sustainability features can provide. When we link sustainability to what consumers value, we can encourage them to invest in energy efficient features.

Selling sustainability is difficult and often complex, with builders and developers convinced that home buyers do not want sustainable homes.

“Our initial research showed that builders were unsure how to market and sell sustainable homes, because they were perceived as costly,” explained Claire Ferres Miles, Sustainability Victoria’s CEO.

“Builders were unsure if they could design and build this kind of home at an effective price point. This program shows ZNC homes are an achievable and affordable product and with the right sales approach and marketing, can be presented as an attractive value proposition to buyers.”

“Our new sales training module and training guide (currently under development) will help builders and developers understand the right approach to sell and market ZNC homes.”

Initial research

There was minimal supply of ZNC homes and a trend by volume home builders away from offering sustainability inclusions. The reasons included:

  • home affordability
  • inaccurate information
  • sales staff found it difficult to explain energy efficiency
  • lack of information on the benefits and costs of energy efficiency and renewable energy improvements.

Research showed that the program needed to focus on how Victorian home builders and consumers think about and act on building and buying ZNC homes.

Several barriers to sustainable housing were identified including:

  • increased capital costs
  • lack of customer/public interest
  • lack of customer willingness-to-pay
  • increased risk
  • insufficient understanding, technical information, skills or tools
  • other cognitive barriers
  • lack of integration of sustainable elements during the planning, design and construction phases.

Source: Martin, F. (2013), “Towards sustainable volume housing: A tale of three builders” (phD thesis) pp88-89.

Further research identified key strategies to increase initial uptake of sustainable practices including:

  • the ability to “Support and assist the builders through mechanisms such as more effective and accessible information sources and tools, training programs and tangible examples.”
  • promoting and stimulating greater customer demand through mechanisms including:
    • increased customer awareness
    • developing robust, credible and accessible methods of verifying sustainability claims
    • challenging the status quo regarding consumer aspirations and expectations for housing features, and
    • implementing strategies designed to reduce the strongly perceived cost barriers associated with sustainable housing, such as provision of financial incentives.

Source: Martin, F. (2013), “Towards sustainable volume housing: A tale of three builders” (phD thesis).

Understanding the customer journey

To best support and guide Victorian home builders to sell and market ZNC homes, Sustainability Victoria commissioned research through Colmar Brunton (now Kantar), to understand the complete customer journey. This was based on two purchase pathways, house and land and land and house, from contemplating a new home purchase to pre-purchase, purchase, build, and post-build phases.

The research objectives were to:

  • understand customer motivations and desired experiences at each phase, including how these may change for different people
  • identify target audience segments and further design communications narrative and creative, engagement activities (e.g. display villages, home buyer shows) and digital strategy.

One of the key learnings from this research was that consumers responded favourably to messages that focused on ‘cost savings’, ‘comfort’ and ‘quality’ rather than ‘sustainability’.

Key findings

Colmar Brunton research key findings:

  • Marketing messaging needs to shift away from notions of social or environmental responsibility to cost savings, quality, comfort and lifestyle benefits.
  • Twenty-six per cent of potential purchasers intended to live in the house one to 5 years; 33% intended to live there 15+ years.
  • Investors, first home buyers and second and third home buyers are all potential buyers; however, second and third buyers will be easier to convert.
  • Those staying in the home longer, with a bigger budget and existing knowledge of the benefits of energy-efficient features, are the most likely to purchase sustainability features.
  • There is a lack of understanding from builders and buyers on the ways in which homes can be more sustainable, although buyers do have some basic understanding of energy efficiency.
  • Consumers do not consider energy efficiency when buying a new home.
  • Consumers needed further education on the items and the benefits they would provide. For example, the costs/payback and benefits of solar, consumers had a skewed perceptions and their understanding was either non-existent or wildly inaccurate.
  • Some key motivators and values include:
    • creating a personalised ‘castle’ for family
    • control – controlling what goes in the house, being able to choose fixtures, finishes etc as opposed to buying an existing/older house
    • family and friends, socialising.
  • Research pathways undertaken by potential buyers tend to last between 12 months and 3 years. Searching and researching tends to ramp up for an intense 6-month period prior to purchase.
  • Research included:
    • visiting display homes
    • internet searches
    • advice from friends and family
    • advice from trades people or real estate professionals in the buyer’s network.
  • The main focus of advertising should be online and at display homes:
    • Getting website content right and tagging content where possible within the site.
    • Land developers providing additional information.
    • Collateral at display homes.
    • Google AdWords could drive traffic to the site.
    • SV to produce educational content on website and social posts driving traffic there.
  • Consumers want comfort and quality but don’t see the link between this and energy efficiency. We need to build consumers’ understanding of the concept of quality, such as the benefits of third party verified air tightness and insulation integrity testing to ensure that consumers are getting what they paid for in terms of design and build.
  • The benefits of long-term savings was the most effective sustainability incentive, as it appealed to participant’s financial needs.

Supporting our program builders

Customer journey mapping

Sustainability Victoria also engaged Today Strategic Design to undertake customer journey mapping to support SJD Homes.

The customer journey map provided strategic insights into how and when to engage consumers in discussions around introducing sustainability outcomes, including building a ZNC home.

Customer insight mapping

On behalf of Stockland and their builder partners, Creation Homes and Vcon Homes, Sustainability Victoria also engaged Today Strategic Design to undertake customer insight mapping. The objective was to build a greater understanding of how to effectively engage customers in a sustainability conversation and to build an understanding of the value and benefits of including sustainability features in the design and construction of their new homes.

Key outcomes of the work included:

  • the potential to include an ‘opt out’ clause, which would mean that the home buyer would need to actively reject the ‘standard’ sustainability features attached to the home design, rather than the usual ‘opt in’ approach
  • create a sales guide which can be used as a foundation for sales training.
Emphasise customer benefits in display homes.

Emphasise customer benefits

Sales approach

The display home or village is the most utilised source of information for home buyers. Buyers may visit as many as 30 to 40 display homes before making a final decision.

Inside the display home, builders can influence buyers through conversations with sales representatives and hard copy information available for collection.

When Metricon launched its first ZNC home on Sustainable House Day in September 2019, they reinforced customer benefits – and not environmental benefits – by installing signage throughout the display home which focused on the benefits of the sustainability features. These included increased home comfort and lower energy bills. The signage was also important in drawing attention to features that are often ‘invisible’, such as greater levels of insulation that are hidden behind plasterboard.

Sales teams have direct contact with buyers. To sell sustainable homes, salespeople need to understand how and why they are built, and how to link benefits to buyer aspirations.

A perceived lack of interest in sustainable homes can stop salespeople from even broaching these conversations. But consumers need to know that investing in sustainability can pay them back handsomely in comfort, quality and lower running costs.

Marketing to buyers

Building energy-efficient homes is only one part of the process and buyers need to be convinced of the benefits too. It’s crucial for builders and developers to support customers to understand the value of investing in a sustainable home and to make the link between energy efficiency, cost savings, comfort and quality. For example, improving energy efficiency creates a more comfortable home and with lower running costs – this can be a major selling point for buyers, especially if they plan to live in the home for a long time.

“Our research shows that when marketing a sustainable product, customers can be confused and unclear on the benefits. Emphasizing and selling benefits, not features, is key,” said Ferres Miles, Sustainability Victoria's CEO.

Builders need to use simple and emotive messaging that speaks of immediate and tangible benefits to the customer, such as having ‘more money in your pocket’ and an increasing the level of comfort for ‘all year-round enjoyment - warmer in winter, cooler in summer’. Messages conveying sustainable benefits are less well received.

Build the link between quality and sustainability

The quality of the build was often ranked high, if not first, by most research participants. But this opportunity to link sustainability features with customer aspirations of ‘comfort’ was often lost.

It’s easy to see how sustainability features like double glazing, better insulation and air-tightness will improve the quality of the home, as well as livability. Together, they improve thermal comfort, reduce draughts, and reduce external noises – all of which tap into the idea of building a much desired ‘peaceful haven’.

Giving buyers easy-to-read literature to compare the cost impact of sustainability features can help consumers understand why it is good value to invest. It also provides clear data to dispel the myth that these features are relatively expensive with minimal return.

“The main motivator shaping the choice of a new home was to build a personalised ‘castle’ or ‘paradise’ where the buyer and their family can live.”
Research carried out by Colmar Brunton for Sustainability Victoria.