A Sense of Urgency

What do you say when a prospect insists they’re not interested in entertaining an efficiency upgrade until their existing equipment fails?  Unfortunately, this objection is ubiquitous, as too many execs don’t invest time or money addressing things that aren’t “urgent.”  In fact, most of them have so many “urgent” things already on their plate, they can’t be distracted with other initiatives.  So, how can you help them see otherwise?

Your value proposition should be, “You’ll be much better off if you fix this before it breaks,” followed by some solid reasoning.  Here are some things to consider when making your case:

1. Your value proposition should focus on the non-utility-cost and non-financial benefits of doing something sooner instead of waiting for the equipment to fail.  In the context of HVAC, for example, you’d want to highlight factors like improved thermal comfort, indoor air quality, convenience/control, etc. that could have a quantifiable impact on worker productivity, absenteeism, and employee retention.
2. There are other things that might interest decision-makers depending on their ideology or need for positive PR, like a lower carbon footprint or an ENERGY STAR^® label. For example, there are no less than a half-dozen dozen studies that have statistically proven a positive correlation between an ENERGY STAR^® label and benefits that income-property owners care a lot about: higher rents, higher occupancy, and higher asset value.
3. Speaking of commercial real estate owners and managers, there are very real reasons to pursue a strategy of replacement before failure.  For one, doing so opens the door to using OPM – Other People’s Money – to do a retrofit by exercising a Cap Ex Cost Recovery provision in the lease so that some or all of the energy savings that the tenants receive could be recaptured to recoup the expense-reducing improvement’s first cost.  
4. Speaking of OPM, if the equipment fails before the landlord has a chance to replace it with a more efficient model, the opportunity to justify Cap Ex Cost Recovery evaporates, as does the opportunity to access another brand of OPM: utility rebates.  Most utilities won’t pay a rebate to retrofit equipment that has already failed.
5. You might also suggest replacing the equipment now rather than later since it’s likely it will fail precisely when it is most needed. If you’re replacing a chiller, for example, a breakdown at the height of the summer cooling season that forces a chiller replacement would be disastrous.  Labor rates would be at their peak.  Equipment availability would be limited.  The cost of renting a temporary chiller would make the scenario even more expensive.  And, of course, there would be angry tenants forced to accept limited or no A/C until the replacement equipment is specified, ordered, built, shipped, and installed.
6. FUD—Fear, Uncertainty and Doubt—is a great way to get a distracted decision-maker’s attention, and the more evidence you can produce to justify that fear, the better (e.g., if the building’s engineer recently commented that the equipment is on its last leg).  The more FUD you can introduce, the more likely this initiative will be labeled “urgent” in the decision-maker’s mind, opening the door to a more immediate upgrade.