Selling climate conscious homes with Sustainability Victoria
- Sustainability Victoria
Residential energy consumption is the largest source of carbon emissions in Victoria. An estimated two million new homes will be built over the next 30 years. If this stock is carbon intensive it will significantly expand our carbon footprint.
Sustainability Victoria has partnered with volume home builders to neutralise the emissions of their homes. The technical challenges have been solved, but businesses struggle to sell them.
Today applied human centred design and behavioural economics to create a new sales process. Our simulation resulted in 75% of real customers choosing a home with the potential for Zero Net Carbon accreditation.
This project used previous research and industry expertise to zero in on the possibility of latent customer demand. We created a hypothesis explaining why customers want these homes but don’t buy them.
We tested a two-part process with diverse homebuyers who had different budgets and motivations. It began with open questions, followed by a simulated sales process. We empathised without assumptions before testing our theory: that the homes’ benefits needed to be normalised and personalised.
We delivered a new sales process incorporating customer insights and mindsets. It provides tools for the sector to understand and build on our success.
Builders can help their customers correctly orient and draught-proof their home; choose insulation, LED lights, energy efficient appliances, double glazed windows and solar panels. Volume home builders can do this at scale. Even if the home falls short of zero net emissions, each feature represents a significant reduction in carbon intensity.
Using our process 3 out of 4 customers chose the standard or premium home with low carbon features included. They wanted these homes even when they were 13–26% more expensive than a house without them. The success of this first test is very promising.
By 2050, Victoria alone is expected to build 2 million new homes. These houses can be built with a minimal carbon footprint, but only if the market changes.
Stockland is a leading developer and builder with $7.8 billion worth of interests in Australia. They were a key partner and are using our work to inform a national marketing strategy. Our insights will be used to make sustainability ‘opt out’ rather than ‘opt in’.
This establishes joint environmental responsibility between seller and buyer — rather than each assuming the other is unwilling. It’s a significant step forward for the market.
Builders need customers on board with minimising the carbon emissions of their home. Volume home builders have resorted to discounting carbon neutral homes, but this is not a long term solution.
The shortage of motivated buyers is a major problem, but we recognised it as an issue of choice architecture rather than lack of demand.
We used behavioural economics to develop a new choice architecture for a sales conversation. We positioned a carbon neutral home at the midpoint between an ‘economy’ and ‘premium’ build. We communicated sustainability features as ‘standard’ and helped customers understand the value for them personally.
Thanks to promotion by Sustainability Victoria with their network of developers and builders, the tools and insights from our project are available to the entire building industry.
The information is being for an online training course Sustainability Victoria is producing. It will also be incorporated into the development of a sales guide which will be available to the public on the SV website.