The Power of Marketing a Green Business, Part I

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Do Customers Care?

Before a company jumps head first into developing strategies for its green marketing initiative and the re-engineering that precedes it, perhaps we should first look at whether the efforts will show a return. Just how important is being “green” to your customers? Unfortunately, recent surveys show varying degrees of the importance, effectiveness and return on investment (ROI) for a company’s green marketing efforts, leaving us without a solid conclusion or definitive yes or no answer.

Of course, ROI is a bit of a capitalist’s view on saving the planet. Making your operation green has a lot of returns that won’t show up on the bottom line but may improve branding and customer perception of a particular business or industry. Just how important is green marketing as part of a company’s overall marketing mix, and how important is it in persuading customers to do business with you? Depending on which survey you read, you can build a strong or not-so-strong case as to the effectiveness of green marketing.

Gallup data indicates consumers’ attitudes toward green issues have shifted in the midst of economic hardships. A Gallup survey in January 2000 showed 70 percent of Americans believed the environment should take priority over the economy, but in March 2008 the number of respondents who believed the environment should receive a higher priority fell to 49 percent.

Cone’s Green Gap Survey places the positive impact of a company’s green marketing at 39 percent, reporting that nearly four in 10 Americans preferentially buy products they believe to be “environmentally friendly.”

An Ipsos Reid study conducted last spring came to the opposite conclusion. In that study, four in 10 (44 percent) Americans either “completely agree” (10 percent) or “somewhat agree” (34 percent) that they are not willing to pay more upfront for green-building products, even though they know they’ll be better for the environment and could potentially save them money in the long run.

The same study also revealed that a significant percentage of consumers view the green labeling of a product as little more than a marketing tactic. Ipsos Reid reported that seven in 10 Americans either “strongly agree” (12 percent) or “somewhat agree” (58 percent) that companies that call a product “green” (meaning better for the environment) are doing so just as a marketing tactic.

Men appear more skeptical of green marketing than women. Some 75 percent of men in the Ipsos Reid study believed that labeling a product green is just a marketing tactic, compared to 65 percent of women.

Does this mean a green marketing campaign can have a negative impact on your customers? Not necessarily. Part of the negative turn in the second Gallup survey, for example, may be due to the perception that purchasing environmentally friendly products is more expensive than the alternative. In a bad economy, that could certainly be a factor. The primary danger in presenting a green marketing program, however, is to overstate benefits or be deceptive in messaging, which can truly damage credibility.

Green Marketing Mistakes

A big part of the green marketing challenge is the consistency between a company’s message and the examples it sets in practice (a common problem in all forms of marketing and branding). To claim that you recycle water while a faucet drips in the men’s room is inconsistent with your messaging, for example.

The value of making green claims in chemistry or renewable resources won’t mean much if you are missing much more obvious areas where you could be greener. Are you touting your use of recycled building materials but not offering recycling bins in addition to your trash cans? A consumer with a strong environmental conscience (referred to in marketing circles as a LOHAS, meaning Lifestyles of Health and Sustainability) might take offense at having to throw a glass bottle into your trash can if no recycling bins are offered, then scoff at any green claims you make in your marketing.

“The overwhelming majority of environmental marketing claims in North America are inaccurate, inappropriate or unsubstantiated,” according to a comprehensive survey released by TerraChoice Environmental Marketing. Such pervasive greenwashing, according to TerraChoice, means that “well-intentioned consumers may be misled into purchases that do not deliver on their environmental promise.”

TerraChoice has identified six types of labeling problems that it calls marketing sins. They include claims that have no proof to back up assertions; claims that are so vague their meaning is likely to be misunderstood by consumers; claims that are irrelevant to their respective products; claims that are technically true but distract consumers from a product’s real problems; and claims that misuse or misrepresent certification by an independent authority.

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