McKinsey’s Five Steps to Green Marketing

McKinsey just released a must read for green marketers. ‘Helping Green Products Grow‘ outlines five steps businesses need to take to sell green products successfully. Most of it is common sense. Still there were a few surprises, most notably in the area of consumers’ awareness of most concrete actions to reduce global warming:

These findings present enormous educational opportunities, not just for green marketers, but also for environmental educators, hoping to make a difference in greenhouse gas emissions. Bloggers, journalists, teachers, environmentalists need to turn up the volume on eating less beef, improving home insulation, and driving more fuel-efficient car, less often. These are all concrete actions that citizens can understand, and that also can help them save money, particularly during these hard economic times.  

Here are the five steps, with selected some highlights:

1. Educate consumers:

Because consumers are largely unaware of green products, a business that sells them must see itself first as an educator, not a sales machine. Our study shows that more than one-third of the consumers who want to help mitigate climate change don’t really know how . . .

2. Build better products:  

Consumers will not think better of green products until companies make them equal to, or better than, their conventional alternatives. It’s no surprise: most people value performance, reliability, and durability much more than ecological soundness. . . .

3. Be honest:

To rebuild public trust, companies must come clean about the true environmental impact of their products and their attempts to reduce it, and many will need to address historical concerns about specific products or operations . . .

4. Offer more:

Companies must ensure that consumers understand the financial and environmental returns on their investment in green products, for they are more willing to try new ones-especially those that cost more-when they find it easy to track the savings . . .

5. Bring products to the people:

Having decided to buy green products, many consumers encounter a last hurdle-finding them-either because manufacturers don’t keep up with demand or advertise where they can be bought, or because wholesalers and retailers don’t stock them or display them prominently. Biofuel enthusiasts, for example, must often drive out of their way to fill up . . .

I will end with my usual rant. Buying green stuff is good as long as it translates in net carbon reduction. Otherwise, we are all better off following the old conservation adage of, ‘reduce, re-use, recycle‘. 

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Consumers Unwilling to Spend Extra For Green

The new Yankelovich report on green living is out, and is confirming what we have been seeing in the marketplace. Sure, citizens are concerned about the environment, but they are not willing to pay extra for green products.

Environmentalism is developing among U.S. consumers — especially among Echo Boomers (ages16-29) and GenXers (ages 30-43), who both said they are more concerned about the environment compared to a year ago. But while interest in green issues continues to grow, consumers’ willingness to pay more for green alternatives has decreased. “There is a looming challenge for marketers of green products and services,” said Dr. David Bersoff, the EVP in charge of global knowledge and intelligence at Yankelovich and author of Going Green 2. “Consumers will be pushing for stricter governmental and institutional green policies, and they’ll be choosing brands to a greater extent based on green considerations. But at the same time, they are becoming less willing to help marketers pay for the greening of their business and products.” While concern about the environment is increasing among the population as a whole, it is still — for the most part — a minority position. Although 49% of consumers feel that our environmental problems are severe and 51% feel that these problems demand immediate corrective action, only 41% of Americans express high levels of personal concern, a meager four-point increase over last year. “It is important to note that, contrary to what might have been expected in the midst of rising unemployment unemployment, interest rates and fuel prices, increased levels of economic concern did not reduce levels of environmental concern,” said Dr. Bersoff. “In fact, somewhat surprisingly, consumers who have no financial anxiety appear to be the least attractive targets for new green products and services.”

The pressure is on marketers and policy makers to green their stuff, at no extra cost to consumers. Of course, this does not relieve citizens from their responsibility to consume less.

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Aligning Green Behaviors With Individual Needs and Wants

When I wrote about the opportunity to align desired green behaviors with individual needs and wants, this is what I had in mind:

Different people will rank these needs and wants differently. Using myself as an example, the primary motivators for me to bike more, are fun and convenience. If I was in a lower-socio-economic group, where making ends meet was the primary issue, I would probably pick money. If I was a mother of young children, the bonding potential would work best. Etc. 

Seems like a no brainer to me! The question is how come so few green marketers and environmental communicators think along those lines? The last time I read something that made really sense to me, was in Steve Bishop’s article, “Don’t Bother With the Green Consumer“. He uses a bike example as well! 🙂 (I also refer to Steve’s article in a recent post I wrote for the Huffington Post)

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Another Way to Look at Green and Not So Green Consumers

The HCHLV Green Consumer Segmentation was just recognized by its parent company, WPP marketing communication giant, as one of the best pieces of work in the area of ‘Market Research and Insights’. Although developed for the British market, this segmentation provides yet another valuable way to look at consumers/citizens. 

At the disengaged end of the spectrum, over a quarter of UK adults are ‘Onlookers’ – those who are the least engaged and have a limited level of concern about ethical and environmental issues.

Moving along the spectrum, the ‘Conveniently Conscious’ make up over a third of UK adults. This group is aware of and fairly concerned about ethical and environmental issues. They will take easier steps such as reducing their water use, but are not interested in more involved ethical consumption or local issues.

The ‘Positive Choosers’ are highly aware of ethical and environmental issues and feel guilty about their lifestyle. They regularly buy from ethically sound companies and will boycott those they feel are not acting responsibly. However, they will rarely complain actively, choosing instead to walk away from companies they disapprove of.

There is a small segment of the population, the ‘Vocal Activists’, who hold similar attitudes to the ‘Positive Choosers’, with the exception that they are much more likely to articulate their discontent.

The most engaged segment is the ‘Principled Pioneers’. These consumers are more prepared to make significant investments of time, energy and money, alongside lifestyle changes, to turn their beliefs into actions. This includes highly engaged activities such as installing alternative energy sources and calculating their carbon footprints.

This way of segmenting consumers/citizens is remarkably consistent with the most recent Pew Survey of Americans. Basically, slightly less than half of the population is positively inclined regarding environmental issues that really matter. A glass nearly half full, that’s a start. Communication efforts should focus on nudging some of the ‘Conveniently Conscious‘ more towards the left. 

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When In Doubt, Just Reduce, Re-Use, Recycle

Reading ‘That buzz in your ear may be green noise‘, yesterday’s article in the New York Times, I had a feeling of deja vu. The issue of green cacophony and the resulting confusion in people’s minds, is one that has been covered many times before in this blog. Rather than repeating myself, I thought I would just retrieve all my previous posts on the topic:

‘The fatigue factor and what it means for the climate fight’

‘Is it green of not?‘

‘Green fatigue‘

‘Green overload‘

‘It‘s getting to me‘

‘Overwhelmed‘

‘The failure of the green media to communicate simply‘

‘Top three green actions to reduce your ecological footprint‘

‘Seven green marketing strategies to persuade Americans to go green‘

Since December, the date of my last post, things have only gotten worse. People are more aware. They are also more confused, and suspicious about all green matters. What should be simple, has now reached levels of unparalleled complexity.

I think it’s time we go back to the old and proven adage: Reduce-Reuse-Recycle. Not sexy, with maybe too much of a treehugger flavor, but in the end, still the best planet saving tip.

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My Secret Green Sauce

There is no disputing the importance of the social factor, in moving citizens along the greener path. One additional element to take into account, is the issue of personal relevance. How does one turn global warming solutions into personal benefits? Research shows that most direct way to interest people is through their pocketbook. Last, I would add the availability of technology to enable desired behavior changes.

Short and sweet for the bottom line, here is my secret green sauce recipe:

P (personal benefit) + S (social network) + T (enabling technology) 

Best examples of green ventures that understand the power of the PST formula, are in the area of home energy efficiency. Agilewaves, Greenbox, and Lucid Design Group show great promise.

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Greening Strategies Most Likely to Succeed in Groups

Some very exciting research in the field of social networks psychology, could revolutionize the way green ventures approach citizens. The latest study, by Dr. Nicholas Christakis of Harvard Medical School, and James Fowler of the University of California, San Diego, reports on the social factors in quitting smoking. It was published this morning in the New England Journal of Medicine, and is already creating ripples throughout the media, starting with the New York Times. From the study’s abstract:

The study examined the extent to which groups of widely connected people quit smoking together.

The results showed that:

• Whole groups of people were quitting in concert 
  
• Smokers were also progressively found in the periphery of the social network
  
• Smoking cessation by a spouse decreased a person’s chances of smoking by 67% Smoking cessation by a sibling decreased the chances by 25% 
  
• Smoking cessation by a friend decreased the chances by 36% 
  
• Among persons working in small firms, smoking cessation by a coworker decreased the chances by 34% 
  
• Friends with more education influenced one another more than those with less education. 
  
• These effects were not seen among neighbors in the immediate geographic area.

Conclusions are :

• Network phenomena appear to be relevant to smoking cessation. 
  
• Groups of interconnected people stop smoking in concert, and smokers are increasingly marginalized socially.

These results are similar to results of a prior study from same authors on obesity. The network effect is at work not just in the halting of negative behaviors, such as smoking or unhealthy weight gain, but also in the spreading of positive life changes such as happiness. The latter will be documented in a forthcoming study by the authors on,’The Dynamic Spread of Happiness in a Large Social Network’.

The implications for climate strategies are obvious. Behavioral change conservation efforts, will work best if focused on groups, not just individuals. This is a confirmation of the research done by the ‘Nudge‘ team at University of Chicago. The smoking study also shows which clusters to focus on. Friends, as in Facebook or Twitter, coworkers as in Carbon Rally, spouses as in family systems. 

Thanks, Meryn, for all the links. 

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Let’s Declare Earth Day a No Shopping Day

Earth Day is approaching, and with it, waves of unease in the blogosphere. Echoing one of my earlier posts, ‘Green Festival or Celebration of Green Consumption?‘, an article in Ad Age this morning, raises the question of ‘Is Earth Day the New Christmas?‘.

Consumerism pervades our entire culture, we know that. And Earth Day is not exception. In the absence, still, of strict FTC guidelines, marketers are going to go wild with greenwashing on April 22nd. Newsweek, Target, Banana Republic, Macy’s, Toys’R’Us, Sweet Leaf Tea, Fairmont Hotels, Barbie dolls, Wal-Mart, Clorox, are amongst some of the companies that will ‘celebrate’ green, according to the Ad Age article.

I say, we go back to the original spirit of Earth Day, and we use the day as another ‘no shopping day‘ instead. Will you join me?

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Danone Communities, a Model of Corporate Social Responsibility and Sustainability

Last night, I had the privilege to sit down at a dinner with the leaders of Danone Water. Rarely have I met business people with such a passion for their work. The reason is very simple. As Danone employees, they are not just in the business of selling yogurt or mineral water. More importantly, they are in a social enterprise, involved in the global mission of sharing life-sustaining knowledge and resources with people in less fortunate countries. Specifically, I want to highlight the Danone Communities initiative, how it works, and why it is such a great sustainability model for other companies. Here, is a description, from the company’s website:

Combining the expertise of Danone in health foods and the experience of Grameen in micro-credits for deprived populations, in November 2006, Grameen Danone Foods launched a yoghurt called Shoktidoi, designed to provide a response to the nutritional needs of Bangladeshi children at an affordable price.

Produced in the first Grameen Danone Foods plant in Bogra, Shoktidoi is sold at a price of 5 BDT for each portion of 80g (ie 6 euro cents) and can be bought regularly by even the poorest families. At the same time, its composition has been specially designed to make up for the nutritional deficiencies that many Bangladeshi children suffer from. Reduced from cow’s milk produced locally and date molasses, Shoktidoi contains the natural calcium proteins needed for growth and bone solidity. Also enriched in micronutrients, an 80 gram pot is enough to cover 30% of daily needs for a child in vitamin A , iron, zinc and iodine.

In the Bogra plant, use of machinery is kept to a minimum in order to promote the use of labour which should mean that the plant will be able to employ 50 full-time workers within four years. Grameen Danone foods also relies on developing micro-farms which supply the raw materials (milk, sugar, date molasses) used to produce Shoktidoi. Local farmers also benefit from micro-credits offered by the Grameen Bank to start up or expand their businesses, while DANONE provides its expertise to help farmers improve the quality of their production. Lastly, Grameen Danone Foods has created an original distribution system based on the so-called “Grameen Ladies” who, supplied by small wholesalers, make sales door-to-door. This activity should provide income to more than 1,600 persons within a radius of 30 km around the plant.

Protection of the environment for local communities and use of renewable energy are part of the community business model developed by Grameen Danone Foods. The Bogra plant for example has a solar water heater which supplies hot water used in cleaning the installation and preheating water for the main boilers.

To reduce the risk of depleting groundwater levels, the site has also been equipped with a rainwater recovery system. Both of these measures help mitigate the environmental impact of the project but also the energy bill for the company! In terms of recycling and packaging, Grameen Danone has also made firm commitments: Shoktidoi pots are produced with PLA (Poly Lactic Acid), a material made of cornstarch and entirely biodegradable.

I was also told by the Danone people that all Danone employees get a chance to participate in the company’s funding of the Grameen initiative. No wonder the Danone people feel so good about working there. Can you think of examples of other companies whose stories you find inspiring?

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Nielsen Report Says Green Marketers Better Be Authentic and Transparent

All green marketers would do well to take note of Nielsen Online‘s new report just mentioned in Ad Age this morning. According to Jessica Hogue, research director at Nielsen Online, and author of the report, “Corporations can’t do everything in one feel swoop, but need to be authentic and transparent about the steps they are taking,” She also suggests brands, study Footprint Chronicles, Patagonia‘s recent interactive online campaign, that discloses the company’s both environmental good works and sins.

It’s time brands understand that they are in a relationship with their citizen customers.

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