Are You Even Focusing on the Right Savings?

Savings

If you want to capture the attention of a busy executive with the prospect of improving his building’s energy-related systems, should you focus your “elevator pitch” and “one-page proposal” on projected savings in kilowatt-hours, therms, or utility expenses? Or should you focus on something else that’s nearer and dearer to your executive’s heart and probably likely to “move the needle” in a more significant way? Consider the following assumptions in the context of a typical open-office workspace: 

  • $40,000 average salary and benefits per person.
  • 200 square feet per person.
  • $200 per square foot in payroll vs. $2 per square foot in utilities.

What if your efficiency campaign boosted productivity by just 1 percent? Assume that your average office employee makes $40,000 per year and sits on a floor that’s been designed to accommodate five people per thousand square feet. That’s $40,000 divided by 200 square feet, or $200 per square foot in payroll. What’s your utility bill? If yours is an average office building in the continental United States, it’s probably around $2 per square foot. 

That means that your payroll is one hundred times as large as your utility bill on a per-square-foot basis. If you’re a manager, what should you be focusing on: your utility bill or your payroll expense? Let’s say you’re selling an energy-efficiency upgrade that is expected to have a positive impact on occupant comfort or convenience. Think about it—on most tenant satisfaction surveys, “too hot/too cold” appears at or near the top of the list of tenant concerns. Could a new direct digital control system make people more thermally comfortable?

What about lighting quality? Would your energy-efficient lighting system reduce glare? Or improve the quality of lighting so that the occupants working under it are better able to do their jobs? Perhaps less eye strain? Fewer headaches? Fewer mistakes?

What if you sell window films that reduce the heat and glare of the afternoon sun on the south and west-facing sides of a commercial office building? Might the workers in perimeter offices be at least one percent more effective if they didn’t need to squint with the sun in their eyes for an hour or more in the afternoon?

Do any of these upgrades have the potential to improve the productivity of building occupants by at least 1 percent? Before you answer that question, let’s think about what a 1 percent improvement would entail. If you do the math, you’ll realize that if an office worker present for ten hours a day is able to work an additional six minutes a day as a result of an improvement you make to his/her workspace, you will have accomplished a 1 percent productivity uptick. 

Six minutes a day. The last time I looked, six minutes was equivalent to two turns of one of those Williams-Sonoma sand-filled hourglass timers that signal a perfectly cooked soft-boiled egg! Two turns of a tiny hourglass egg timer. That’s all it takes.

Do you think a person that has to leave his or her desk and go to the break room to get a cup of tea or coffee to warm up because the workplace is overly air-conditioned wastes more or less than six minutes a day doing so? 

And what if they stop by someone else’s desk to kvetch about the temperature? Maybe their colleague joins them for the coffee break. Maybe the coffee is so lousy, they leave the building together and go to Starbucks to warm up. How many minutes of productivity would that waste?

By the way, in case you think this is too fanciful a value proposition to sway a jaded executive’s decision-making process, you’ll be interested to hear a story that one of our ninjas recently shared with me. He was interested in selling an HVAC replacement project valued at $1.6 million to a highly occupied building that was having both maintenance and comfort problems. His prospect preferred a quick fix that would only solve the most critical comfort problems and cost almost a million dollars less.

When our well-trained sales professional was invited by senior management to present the alternatives so that they could determine which of these two paths the company would be approving, he came prepared with some very interesting non-utility-cost financial savings data in his back pocket. He first described to senior management the costs and implications of each of the two solutions. He paused, and then casually added that if the more expensive system produced as little as 1.2 minutes of additional productivity per day for each of the workers occupying that facility, the value of the productivity savings would equal the value of the $1.6 million project’s annual energy savings! 

After a half-minute or so of silence, the most senior executive in the room said, “That can’t be right.” Rather than protesting, the sales professional simply replied, “How do you mean?” The executive continued, “It has to be at least a five-minute daily comfort advantage.” After a few more minutes of discussion, the exec directed his staff to prepare the paperwork needed for him to approve the larger project. 

The moral of the story? There are three categories of benefits: utility-cost financial, non-utility-cost financial, and non-financial. An efficiency sales professional carefully considers each and every one of these benefit categories in order to present a proposed project in its most favorable light.

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By info@SellingEnergy.com (Mark Jewell, CEO of Selling Energy | www.SellingEnergy.com) | | financials |
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