But It’s Vacant…
Have you ever tried to sell an efficiency product or service to a prospect that owns or manages a building with high vacancy? If you have, you probably know that it’s not an easy task. Vacant space doesn’t pay rent, and without that money, it can be hard to convince a prospect to front capital for efficiency improvements to those square feet. I’d like to share a success story from a graduate of the Efficiency Sales Professional Certificate program (who we’ll call Tom) about his experience prevailing in such a situation.
Tom approached a developer in Silicon Valley who owned a building that was 35% vacant with the goal of selling him a high-end lighting control solution. The offering was a state-of-the-art system that allowed the user to control the brightness of each and every luminaire (“lighting fixture” to mere mortals) using a desktop widget that connected the user’s computer to a server, which in turn was networked to the lighting ballasts via a unique IP address for each one. It was a truly high-tech system, and its price reflected it…It would cost about $4 per square foot to install.
Tom approached the developer with the following “elevator pitch”: “You know, the kinds of tenants that you’re hoping to attract are most likely high-tech prima donnas – venture-capital-backed game designers and the like. They would really appreciate this technology.” The developer asked him, “What are you getting at?” Tom replied confidently, “Well, you’re 35% vacant now. I suggest that you buy our whiz-bang high-tech lighting control system for the 35% of your building that is vacant so that you can use it as a differentiating amenity as your brokers are trying to find tenants to fill that space.”
The developer thought about it for a moment, then said, “If you’re willing to sign a memorandum of understanding saying that you’re not going to sell this system to any other building within 25 miles of mine (so that my brokers can actually use this lighting control system as a differentiating amenity), then I’ll buy the lighting system from you. Of course, you also have to agree to educate our brokers as to how special it actually is (and why it’s important to our potential tenants) so they can effectively leverage this competitive advantage.”
Tom didn’t consider the 25-mile radius limitation to be onerous, so he agreed, and they signed the deal.
What happened in the wake of the retrofit? Six months later, the building’s vacancy percentage had dropped to 5%! Who do you think made more money: Tom, who sold a $4 per square foot system, or the landlord, who just filled up 30% of his building? The landlord, of course! Think about the annual rent per square foot…and the concomitant increase in appraised value that the landlord enjoyed now that his building was 95% occupied.
There’s a funny epilogue to this story as well: After the tenants moved in, they called Tom and said, “Listen, we like the system, but we don’t like the way it’s programmed. Could we pay you to reprogram it for us?” Tom agreed, of course, and made another three bucks per square foot reconfiguring the system. Within a six-month period, Tom closed two sales: one for $4 per square foot and the second one for $3!
Most salespeople would probably have approached this situation saying, “There’s no way a landlord is going to spend money outfitting vacant space, especially not with a top-of-the-line lighting control system. Why would they buy from me?” Tom, a true sales professional, used the powers of positive thinking and reframing. He understood exactly what was most important to the landlord and reframed his offering based on that insight.
So what’s the moral of the story? The more you can reframe energy efficiency as an amenity that gets people more of what they already know they want (in this case, more occupied square feet!), the more successful you’ll be in selling it.