🚀 go-pugleaf

On closing that energy upgrade/retrofit deal....

Some of you may already know what I'm about to point out.  Forgive
me.  Others, I hope, may find this information useful.   In any case, I would
like to hear feedback from all of you on the front lines.  My e-mail is
JSHOOK@gibson.cioe.com.

The Problem
============
From my discussions with consultants in energy management, one, if
not the biggest problem faced, is the ever-reluctant home-owner or plant
manager. Even though all the numbers are in front of him or her and 
*guaranteed* savings are obvious,  the person absolutely will not sign on the
dotted line. How is this possible?   How is it possible that a person given 
the opportunity to save money on energy will opt to continue throwing it away 
instead?  This happens even when a proposed upgrade is paid for by a
"percentage of savings" plan and there are no out-of-pocket costs!!  

A partial answer to this perpetual thorn-in-the-side of energy savings
might be found simply in how a deal is presented. Or, in behavioral science-
speak, how it is ~framed~.  Below, I will briefly contrast two presentation
tactics that one might use. The first, a presentation that offers the client 
an opportunity to *save* energy and expense.  The second offers remediation 
to wasteful loss, and adds some motivational appeals. Despite our intuitions
regarding seizing an opportunity, carpe diem, etc., the second tactic may be
the way to go....

Decision dynamics--opportunity
===============================
Decision-making research has shown that people, to a considerable
extent, are **risk-averse** when it comes to opportunities.   This is
particularly so when a perceived cost is change from a known routine or
environment to one that is uncertain or unfamiliar. The familiar cliche "A 
bird in the hand is worth two in the bush"  illustrates this notion well.  

Presently, many consultants may use a simple close that goes roughly
thus:  "Ms. Plant Manager,  here are the results of our audit.  By 
implementing our suggestions, we can SAVE you $100,000 annually in lighting 
and heating costs."   This is a straightforward no-nonsense approach that we 
probably wish all sales people would use with ~us~.  And  yes, it presents an 
apparently wonderful opportunity.  But it also carries an implicit and 
nebulous risk--change from the familiar.  The gut-reaction flags are flying 
high--uncertainty!
   
Further, this uncertainty doesn't concern grabbing bigger market share, R&D, 
increasing output, or anything that is traditionally taught, learned, or 
associated with risk-taking in business.   This is, after all, a "fixed cost" 
area were talking about here, right?  

The perceived bottom line with a savings-emphasized presentation:  
Compared to my present state, I don't  ~loose~ anything by declining, and I
avoid the risk of uncertainty.   "Thank you very much, we'll talk it over and
call you...."

Decision dynamics--avoiding loss
=================================
In contrast to the above, people generally take greater risks and make
greater investment when it comes to *avoiding loss*.   As an example, 
consider which of the following would motivate you to spend an extra $2000
on an automobile:

1) Would you spend an additional $2k to get better mileage that would pay
for itself in say, three years?  Perhaps. This first case represents a near 
certain return on investment, or savings.

2)  Would you shell out an additional $2000 to get air bags and ABS on your
car, and pat yourself on the back for spending the extra cash?  Who wouldn't
invest $2k if it meant possibly saving a life?  This second case anticipates 
an uncertain, albeit extreme, loss event. 

You may be thinking this comparison is mixing apples and oranges. To
a point, it is.  The question, however, was which scenario would most likely
motivate you to spend an additional $2000....

As you can see, loss avoidance is a powerful motivator. 

A Revised Strategy
===================
Let's rewrite the close using a combined loss-avoidance/comparison
motivation strategy:

"Mr. Plant Manager,  we have the results of our audit.  X kWH and Y
BTUs are being wasted.  At current rates, you are throwing away $100,000 a
year in unnecessary energy usage.....Here is a (lengthy) cost breakdown by
service, the associated losses from inefficiency compared to the available 
off-the-shelf technologies, and our remedial suggestions.  In the appendix is 
a list of companies who have already implemented actions that we've 
recommended for you.   I'll let you read over the proposal, check it out, and 
you can call us if you'd like to discuss any upgrades we've proposed in more 
depth."    

In this framing, the client finds themselves in a loss position.  As
you've pointed out, this loss is *certain* and is happening as you speak. 
*Ruminating* about all that money going out the mains,  he will be much
more open to the fact that "fixed" costs aren't, and maybe a few new light
bulbs will stave off other cuts so that the company makes that 6% dividend
next quarter.   But that's not all.  

By throwing in a substantial list of reference companies,  ~you've~
defined the comparison field--the client's company versus other companies and
managers who have already made upgrades ~rather than~ his business
acquaintances and immediate competitors. This gives you two, perhaps
three, advantages.  

First and most simply,  your references should really work for you.  
People tend to bolster the wisdom of a decision after they make it 
(e.g.,  people work hard to feel good about buying the car or investing in 
the mutual fund that they did; when questioned, they'll often brag about what 
a great decision it was to others). Thus, you are likely to get very good
comments about energy upgrades by those who have already made them. 

Second,  very few people want to go first.   They wait to see what results
others have with a new way of doing things before they jump in.   Although
many companies have already incorporated energy savings tech,  your client
probably doesn't keep track of such things.  By providing a list of companies
that have upgraded,  your proposals don't seem so risky and untested...other
people are already using it.  

Finally, if your client does their homework and sees that others are reaping 
the benefit of savings, the perceived loss from his inaction is now even 
greater--falling behind in the technological game.

So now the client sees himself loosing cash AND falling behind in the
game!  But, just doing your job, you've given him a way out of this awful
mess.....He (and this is his decision rather than your sell) may ultimately
decide to do something smart for the company and, of course, his career, 
i.e., reduce LOSS.  

Conclusion
==========
My purpose has been to point out that a change in presentation
framing--from an opportunity to save, to a combination loss avoidance/social
comparison strategy--might help close more deals (provided, of course, that
you generally don't come off as a doomsayer). This proposal is based on
some fairly solid research indicating that 1) people are more highly 
motivated to avoid loss than they are to achieve gains, and 2) comparisons 
with others can motivate us to excel and keep up, but this depends on who is 
being compared with whom. 

I would be happy to give any references you may want, and appreciate any 
feed-back you have on these strategies.

The standard caveats and disclaimers are in order.  I make no promises
or guarantees, won't be liable for a blown deal, etc.;  i.e., you still have 
to use your head.



=================================================================
JARON L. SHOOK, II				(317) 497-9409
=================================================================
50 Country Squire Ct.		 e-mail:  jaron@psych.purdue.edu 
W. Lafayette IN  47906  USA	    or  jshook@gibson.cioe.com
=================================================================
OBJECTIVE:    An entry position in the alternative energy & energy 
conservation industry or associated organizations that would allow me 
to apply my skills researching and expanding consumer awareness, 
increasing revenues and, ultimately, market base.   
==================================================================

EDUCATION
==========
**M. S. in Psychological Sciences,  12/95, Purdue University
   West Lafayette, Indiana. 
Program:  social/cognitive emphasis,  inc. decision-making,  social 
influence, attitudes and attitude change,  group dynamics,  causal 
attribution and inference, behavioral and cognitive automaticity, & consumer 
psychology; experimental & quasi-experimental methods,  statistics (inc. 
mult. regression, multivariate, and multidimensional scaling techniques).   

**B. S.  in Psychology, 12/91, The Ohio State University, Columbus, Ohio.
**Associate of Applied Science in Electronic Engineering Technology, 6/89  
   Community   College of the Air Force, Maxwell A.F.B.,  Alabama

EXPERIENCE
===========
*Graduate  Assistant  - Purdue University, W. Lafayette, Indiana  8/92-12/95.
 
~Planned and executed social psychological studies in coordination with area
faculty.
~Performed statistical analyses; summarized, interpreted, and formatted 
results for effective written or oral presentation.   Please contact me for a 
list of presentations and papers.
~Planned and instructed recitations (inc. honors section) for undergraduate
social psychology course, placing special emphasis on developing students'
critical thinking and communicative skills. 
~Exemplary performance ratings obtained from both faculty and students.
____________________

*Head Resident Assistant - Sharon Valley Apartments, Newark, Ohio  9/89 -
6/90

~Ensured smooth operations of 160 resident, privately-owned student housing
complex.
~Planned and implemented numerous social activities and edited the complex
newsletter.
~Coordinated company's representation in a 15-minute Ohio State promotional
video that aired locally.  
~Employment was concurrent with full-time study at The Ohio State
University-Newark.
____________________

*Precision Measuring Equipment Specialist/Sergeant - U.S. Air Force 7/85 -
7/89

~Repaired, calibrated, and certified precision  measurement and diagnostic
equipment,  ranging from electronic and physical-dimensional standards,  to
microwave spectrum analyzers and  Nd:YAG lasers. 
~Completed several mission-essential emergency repairs under time-critical
conditions. 
~Achieved an impeccable Quality Assurance record. 
~Efforts contributed to two Outstanding Unit Citations.
~ Received numerous awards including Non-Commissioned Officer of the
Quarter.
~Based on skills testing and performance, was selected for promotion to Staff
Sergeant *two-and-a-half years* below the Air Force average. 
_____________________

*10/91-8/92  Misc. employment ("marking time 'til grad school")
  Columbus, Ohio  
_____________________ 

COMPUTING 
===========
Statistical:  SAS  software in mainframe ( v. 6.08 - 6.8)  and PC (SAS-
windows; v. 6.10) environments. 

PROFESSIONAL AFFILIATIONS
=========================
American Psychological Society (APS) - Graduate affiliate
American Psychological Association (APAGS) - Graduate affiliate
Midwestern Psychological Association (MPA) 

COMMUNITY SERVICE
===================
American Heart Association volunteer
___________________________________________________________________
KEYWORDS:    ALTERNATIVE ENERGY, CONSERVATION, BEHAVIORAL-SCIENCE,  
SOCIAL-PSYCHOLOGY, GREEN MARKETING, CONSUMER-BEHAVIOR, TQM,
PRODUCT-EVALUATION,  MARKET-DEVELOPMENT,  STATISTICS, ELECTRONICS,   
MEASUREMENT, INSTRUCTION, EDUCATION  
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