May, 2009

Thinking Green?

Builders know that “green” is key to selling their homes. What they don’t know is how to navigate an increasingly complex maze of regulations, guidelines, and conflicting information about green building.

By John Cashmore

Builders know that “green” is key to selling their homes. What they don’t know is how to navigate an increasingly complex maze of regulations, guidelines, and conflicting information about green building and green building products. Even more, builders’ may feel that they can’t count on their LBM dealer—their traditional source for product info—for real-world, practical information that they need to leverage the green building advantage. In their frustration lies opportunity, once you understand what builders really think about green building.

Eight custom-home builders participated in a focus group, which I moderated, and which took place at the same time as the International Builders Show in Las Vegas last January. Before the reader thinks that focus groups are useless, and these are the opinions of only eight people, think again. Focus groups can effectively create and test a hypothesis which is often the first step to a larger projectable study. Since this study had very similar results to others conducted over the past three years by my company, there is every reason to believe the results of this study. The one key difference: these guys and one gal were more confused about all the regulations, guidelines and other media than I’ve ever observed in one sitting.

Maybe it’s because they were recruited from all over the U.S. Maybe it’s because the group started at 8 a.m. in Las Vegas, but for what ever reason, they all embraced the term “green wash” when referring to the exploding information base of information about green building—including competing standards and conflicting information. Bottom line: all eight participants were trying to use green as a competitive advantage when selling their homes. Notably: all eight were working harder to understand the information, yet understanding less.

Believe it or not, participants saw little help from their dealers and learned more from their customers and through manufacturers’ websites. Something seems wrong here…until one realizes dealers have cut back staff and in-house training of the very people responsible for getting the story out. The Certified Green Dealer™ Program (which is marketed through this magazine and most of the regional building material associations), provides muchneeded training to LBM dealers. Based on my research with builders, dealers would be wise to take a serious look at this program— and from the messages delivered by LBM Journal’s Green Building Editor, John D. Wagner.

Traditionally, dealers have been the most direct conduit of information according to group participants, but the session illustrated this clearly is no longer the main avenue of information relative to new products in general, let alone green products. According to one sponsor Bill Stoker, president and CEO of newly formed PMC Building Materials, Atlanta, Ga.: “We’ve come a long way, but clearly we have a long way to go.”

OBJECTIVES OF THE STUDY

As a researcher of building materials and their distribution channels, I’m not here to offer marketing advice. Instead, I provide marketers with the insights needed to make more effective business decisions. With that in mind, we had three objectives for this group:

• Understand green products and how green products are used and specified by semi and custom home builders from across the U.S.

• Determine the perception of green products today both at the builder and their consumer levels and how this affects purchase decisions.

• Understand how much knowledge builders have about “Green” in general, and how they use it as a marketing strategy (if at all).

ENERGY EFFICIENCY AND THE BOTTOM LINE

By a wide margin, energy efficiency is the most common term used by participating builders and their homeowner customers when talking about green. While Energy Star has been around longer than any standard, participants view it as applying primarily to fenestration and appliances; still, it was the least understood by both builders and their buyers. They could relate to the yellow line and triangle for the efficiency rating currently in use on appliances, but most participants agreed Energy Star was a minimum standard which they did not take seriously. “Besides, a consumer doesn’t know one U value from the next, and the stickers are removed before they move in,” stated one respondent.

As the discussion evolved, it became clear the exterior envelope of the home was the area where the greatest energy efficiency could be realized. They also used the “R” Value of the envelope (they believe consumers have better understanding of “R” value from one material to another) than any other unit or standard. The NAHB color-coded system, while understood by about half the group (all were NAHB members) was seen as confusing. Some participants thought it pitted one builder against another—not good from an organization established to strengthen all builder business.

The conversation evolved to the meaning of “sustainability.” This too seemed to have different meanings to each participant. This term seems to have taken the same path as “green wash” with these participants; however the question has been asked during both forest products and fenestration studies in the past by MRA with similar results.

Participants were asked what made a product green. One responded, “that’s a good question. The same product has a different label saying it is now green. How can that be?”

Among the builders who participated in our focus group, green building = energy efficiency. In their view, green has little to do with the manufacturer’s raw material acquisition, manufacture or lifecycle of the products used. Despite heavy investment by forest products manufacturers over the past decade touting advances in sustainable forestry—including land management, water shed and air preservation, habitat sensitivity, and more—the message just doesn’t seem to be getting through to builders or home buyers. In fact, participants considered the importance of sustainable forestry to be often over-blown by distributors and dealers. Participants were asked to name the attributes that fit their definition of green building. They were then asked to rank these 12 attributes from most important to least important.

Clearly, energy efficiency is by far the most important attribute of a product. Out of 12 attributes, a score of less than six indicates little to marginal importance. Surprisingly, durability of the products was in the “less than important” category, and may signify these builders are not concerned with much beyond the warranty for product performance in the homes they build. This is in direct contrast to what was said verbally during the group. “I build a high quality home.” It can’t be both ways.

Using this same thought process, it would indicate exterior products that boost energy efficiency are the greenest, while interior products including carpeting, countertops, appliances, trim, and others are not thought about in connection with green.

When asked what is greener of the following products, the following was noted.

I JOIST 1.00
2X10 2.38
STEEL BEAM 2.63
VINYL 2.13
FIBERGLASS 2.25
ALUMINUM 2.75
ALUMINUM CLAD 2.88

This would indicate the structural elements of the home building process including composite products are considered most green. When asked why: “I-Joists use chips of smaller timber from tree farms.”

Regarding fenestration products, respondents were asked which products are most green. Again, lower is better.

The fenestration definition of Green was surprising to this researcher, as aluminum clad was in tandem with wood, but participants consider wood as being less green and the vinyl as greenest because it is recyclable.

Do builders verify that the products they use actually meet Green standards? All indicated they did not have time for this, but relied on manufacturers they trust most to tell the truth. Troubling here again, is there was no mention of the dealer in the product knowledge process. This reinforces the need for dealers to step up their staff training.

CONCLUSION: BUILDERS NEED GUIDANCE

From this focus group, as well as others we’ve conducted over the past three years regarding green, one thing is clear: builders need guidance to navigate green building. The entire notion of “green” and “sustainability” are confusing, and the manufacturers, dealers and distributors in the manufacturing and distribution channel could do a much better job helping their customers sort through the explosion of green building information. From this researcher’s view, there is a tremendous opportunity for dealers who are willing to do what it takes to help their builder customers understand and embrace the fastgrowing green building market.

JOHN CASHMORE is president of Market Resource Associates, a Minneapolis-based research and consulting firm focused on the building products industry. MRA (www.mraonline.com) offers a wide-range of services, including qualitative and/or quantitative research, secondary research, industry reports and consulting solutions. Cashmore can be reached at john.cashmore@mraonline.com.