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The new green marketing paradigm
Conventional marketing is out. Green marketing and what is increasingly being called “sustainable branding” is in. According to the new rules of green marketing, effectively addressing the needs of consumers with a heightened environmental and social consciousness cannot be achieved with the same assumptions and formulae that guided consumer marketing since the postwar era. Times have changed. A new paradigm has emerged requiring new strategies with a holistic point of view and eco-innovative product and service offering.
Historically, marketers developed products that met consumers’ needs at affordable prices and then communicated the benefits of their brands in a memorable way. Paid media campaigns characterized by ads with catchy slogans were de rigueur. Green or “sustainable” marketing and branding is more complex. It addresses consumers’ new heightened expectations for businesses to operate and requires two strategies:
1. Develop products that balance consumers’ needs for quality, performance, affordability, and convenience with the lowest impact possible on the environment, and with due concern for social considerations, e.g., labor, community.
2. Create demand for the resulting brands through credible, values-laden communications that offer practical benefits while empowering and engaging consumers in meaningful ways about important environmental and social issues. These communications represent value to consumers for what they provide functionally and what they represent, and often positively reinforce the manufacturer’s track record for sustainability as well.
The new rules being laid down by today’s eco-conscious consumers cannot be addressed with conventional marketing strategies and tactics. Brand builders in the 21st century are accountable to tough new standards. Sustainability represents deep psychological and sociological shifts – not to mention seismically important issues – as did one of its predecessors, feminism, which forced marketers to develop more convenient products in step with two-income lifestyles and to portray women with a new respect. Meeting the challenges of today’s level of green consumerism presents its own mandates for corporate processes, branding practices, product quality, price, and promotion.
To realize that the rules of the game have changed in a big way, one need only recall the unsavory backlash that is now occurring over what is perceived by environmentalists, regulators, and the press as inconsistent and often misleading eco-labels and messages. The resulting deluge of skepticism, confusion, and regulatory nightmares that spurious green claims – dubbed “greenwash” – are spawning in the marketplace proves that environmental marketing involves more than tweaking one or two product attributes and dressing up packages with meaningless and often misleading claims. Too many marketers are learning the hard way that leveraging environment-related opportunities and addressing sustainability-related challenges requires a total commitment to greening one’s products and communications. Green marketing done according to the new rules also affects how a corporation manages its business and brands and interacts with all of its stakeholders who may be affected by its environmental and social practices (see Chapter 7 for more on this).
The new green marketing paradigm
A new paradigm is being forged by sustainability leaders that are creatively, authentically, and distinctively addressing the new rules of green marketing. Basic assumptions about how to best cater to consumer needs are being shattered. To successfully market to environmentally and socially aware consumers credibly and with impact requires first that one no longer view people as mere “consumers” with insatiable appetites for material goods, but as human beings looking to lead full, healthy lives. To follow the new rules means to project one’s values, and to be sensitive to how one’s customers, employees, and other stakeholders interact with nature; to be cognizant of how the production and consumption of material goods impacts lives positively as well as negatively, short-term as well as long-term (see Fig. 3.1).
In the age of sustainability, products are ideally designed to travel in endless loops; when their useful lives end, materials are not heedlessly disposed of in a landfill, but thoughtfully recaptured for recycling, reuse, or remanufacturing. Consciousness is growing for the benefits of sourcing one’s materials locally, and about products that do a better job of fitting regional environmental considerations or the specific environmental needs of different segments of consumers. Under the new rules of green marketing, yesterday’s resource-intensive products are being replaced by eco-innovative ones with radical new designs and technologies. Some products are even being shunted aside by services representing exciting new business models that allow forward-looking businesses to be profitable and ecologically responsible while increasing value and convenience for consumers.
Today’s more sustainable product and service brands are marketed with communications that derive added value from the empowering educational messages that they impart, the values they project, and the communities – increasingly online as well as offline – of users they build. Many ecologically sound brands are so appreciated by consumers in the vanguard of environmental and social consciousness, they do not have to be advertised at all; rather, they make their way to the top of influential consumers’ shopping lists based solely on the power of word of mouth. Goodwill propels many sustainable brands; today’s consumers feel empowered when they reward companies they see as positively impacting people and the planet; and environmentally and socially aware consumers who spot gross infractions of this new paradigm will be quick to boycott as well.
The new rules of green marketing call for businesses to excel by being proactive. Aiming to surpass minimal compliance standards, they set the standards by which they and their competitors will be judged; they are not afraid of disclosing their ingredients and swinging open the doors of their factories in order to build a lasting relationship with green consumers ready to reward them with their loyalty.
Ecologically and socially responsible corporations are akin to nature’s processes – interdependent. They ally with the panoply of corporate environmental stakeholders in cooperative, positive alliances and work hand in hand with suppliers, retailers, and local governments to manage environmental and social issues throughout their products’ value chain. Cross-functional corporate teams convene with a web of external stakeholders to find the best possible holistic solution to sustainability challenges. These stakeholders are willing partners in the quest to innovate, communicate, and challenge the company to achieve ever-higher levels of sustainability. Long-term rather than short-term in orientation, these companies manage with an eye on a triple bottom line – one each for profits, the company’s contribution to society, and the planet.
Figure 3.1 The new green marketing paradigm
Source: J. Ottman Consulting, Inc.
The seven strategies for green marketing success
Under the new rules, the currency of sustainable branding is innovation, flexibility, and heart. I have formulated seven strategies which I believe can help businesses address these deep-seated and lasting changes in consumer sensibility. Reflecting our learning from working with sustainability leaders over the past 20-plus years, they can be summarized as follows:
Ottman’s seven winning strategies for green marketing
1. Understand the deeply held environmental and social beliefs and values of your consumers and other stakeholders and develop a long-term plan to align with them.
2. Create new products and services that balance consumers’ desires for quality, convenience, and affordability with minimal adverse environmental and social impacts over the life of the product.
3. Develop brands that offer practical benefits while empowering and engaging consumers in meaningful ways about the important issues that affect their lives.
4. Establish credibility for your efforts by communicating your corporate commitment and striving for complete transparency.
5. Be proactive. Go beyond what is expected from stakeholders. Proac-tively commit to doing your share to solve emerging environmental and social problems – and discover competitive advantage in the process.
6. Think holistically. Underscore community with users and with the broad array of corporate environmental and societal stakeholders.
7. Don’t quit. Promote responsible product use and disposal practices. Continuously strive for “zero” impact.
Source: J. Ottman Consulting, Inc.
Many enlightened companies, too numerous to mention, have already awoken to this new green marketing paradigm. They are putting these seven winning strategies into practice in their own ways, thus forging their own brands to fit the new consumer sensibility. Many of their stories illustrate the strategies described later in this book. One such story focuses on eco-entrepreneurs Eric Ryan and Adam Lowry, founders and co-CEOs of Method, who have created a much-talked-about sustainable brand and set a greener pace that others must follow.
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Method makes a difference by being different
The Method difference
In 1999, in what they considered the dirtiest apartment in San Francisco, long-time friends Adam Lowry and Eric Ryan, both under 30, decided to clean up their act – and everyone else’s. Sensing the opportunity to transform household cleaning from a chore to something fun, Lowry and Ryan combined their expertise – Lowry in chemical engineering and Ryan in marketing – and founded Method. Their goal: create “a line of environmentally friendly cleaning and personal-care products that are safe for every home and every body.” Today, with a loyal and growing following among engaged young adults, and an enlightened approach to sustainability, they are proving themselves as deliberate change agents in a sleepy category with such entrenched entries as Tide, Wisk, and Palmolive.
With a fast-growing line of household and personal-care products that spans body lotions and hand sanitizers to air fresheners and mops, and distribution in over 25,000 retail locations such as Lowe’s, Target, and Whole Foods Market, they have achieved over $100 million in revenues despite prices that can be up to 30% more than their well-known competitors. In 2008, their market share increased in all product categories, most notably a near 18% growth in sales over the previous year for the all-purpose cleaner, one of their most popular products, representing $5 million in sales alone.
In stark contrast to the big “soapers,” P&G, Unilever, and Colgate-Palmolive, who follow the old rules and just sell products – and even the drudgery associated with cleaning one’s home and dishes – Method serves up an entire cleaning experience, characterized by fun and social awareness. Eyecatching, museum-quality design – previously unheard of in their industry – draws in their youthful customers; an appreciation of Method’s demonstrated commitment to sustainability, and their other brand hallmarks of efficacy, safety, environment, and fragrance, keep them coming back for more.
Customers who want more than clean
Lowry and Ryan know their customers won’t settle for positive reinforcement for a job well done (you won’t catch them admiring their reflections in plates made shiny by Joy liquid). Unlike the customers of “Madge the manicurist,” the historical television spokesperson for Palmolive dishwashing liquid, Method users are hip, young, aware, and desirous of solving problems in the world. In contrast to clunky bottles of conventional dishwashing liquids that are typically hidden under the kitchen sink, Method’s sleekly designed bottles stay perched on the countertops, adding to the kitchen decor and helping to project their consumers’ values to others.
According to Method, its users are young, professional females whom they dub “progressive domestics.” Whereas the venerable Seventh Generation brand attracts a loyal following of “deep green” (LOHAS) consumers, Method draws from the larger band of light green, the “Drifters” who view eco-awareness as popular and hip; to them, Method represents something easy to do about issues they care about. The Method brand makes them feel good about their purchases and themselves. In Method they find everything they want in a personal-care or household-cleaning aid – efficacy, fragrance, and chic design in addition to a lighter environmental footprint and low toxicity. Even the name “Method” doesn’t sound deep green like “Seventh Generation” (reflecting an Iroquois slogan about preserving the Earth for the next seven generations), but is non-specific yet provocative, even scientific, ensuring mainstream appeal.
A company with a conscience
The company’s deep-seated environmental and social values have translated into state-of-the-art green operating and manufacturing processes with the accolades to prove it. For starters, they have green offices (including one that’s certified to the U.S. Green Building Council’s LEED standards) and a factory that doesn’t emit a drop of waste-water. They achieve a lofty goal of carbon neutrality in all manufacturing, office operations, and employee travel through a combination of energy efficiency, biodiesel fuel in transport trucks, and use of renewable energy such as wind and solar; their remaining carbon is offset by buying Renewable Energy Certificates (RECs)1 (from NatifeEnergy, a nonprofit that supports projects to capture methane and energy from three Pennsylvania dairy farms).
Method’s environmental consciousness is partnered with a social one, marked by support for numerous service projects that help to foster good community relations. Employees get three paid days per year to volunteer, enabling them to pitch in on projects like Park(ing) Day, an annual event where volunteers transform parking spaces in cities around the world into parks for the day; Save the Bay, removing litter, testing the water’s phosphate levels, and planting native seedlings in the San Francisco Bay Area; and cleaning, repainting, and installing new furniture at the local family shelter run by San Francisco nonprofit Compass Community Services.
To help monitor their progress, in June 2007 Method underwent certification as a B Corporation by the B Lab, a Philadelphia-based nonprofit organization that provides third-party audit ratings of a company’s commitment to social and environmental issues.
Figure 3.2 Method’s B Impact Report
Source: BCorporation.net. Reprinted with permission from Method
Companies that score highly in the ratings are eligible for B Corporation certification (which also includes a legal expansion of corporate responsibilities to include consideration of stakeholder interests). B Impact Reports for all Certified B Corporations are publicly available on B Lab’s website. One thousand other progressive companies in 54 industries, including Seventh Generation, Numi Tea, and Dansko footwear are also rated.2 Publishing these results shows customers that Method values transparency and is willing to receive constructive criticism on the functioning of its company. Method’s B Corp rating (Fig. 3.2) reflected a composite score of 128.5 placing it in the top 10% of all B Corporations (the bar for eligibility is 80 points, and B Corporations have an average score of about 100 points). Method’s high scores reflect the company’s wide-ranging social and environmental commitments; the relatively lower scores for “Community” and “Leadership” do not indicate that the company is not doing good things, but rather that Method has not chosen those topics as a focus of its business.
Figure 3.3 Method “teardrop” bottle
Reprinted with permission from Method
Five product hallmarks
In tune with their desire to make cleaning fun, Method products step out from the cobwebbed cleaning products category and claim a strong aesthetic sensibility. To meet their youthful customers’ demands, they strike a balance for efficacy, environment, safety, design, and fragrance – and fun. As one example, the Method baby + kid line features hypoallergenic, pediatrician-tested, and “never tested on rubber duckies” bath-time formula in penguin-shaped bottles.
Packaging is sleek and trendy – and easy to spot on the retail shelf. In keeping with a Method moral that each product has a past, present, and future, packaging is minimal and uses recycled or recyclable materials. For example, as of 2008 all packaging for surface cleaners, floor cleaners, specialty sprays, and other cleaning products is made from 100% recycled and recyclable PET (polyethylene terephthalate) plastic – with the goal of extending this recycled and recyclable plastic packaging to all Method products.
Naturally appealing fragrances and colors such as pink grapefruit and lime-green cucumber distinguish the Method experience by reinforcing the natural aura of the products and making them fun to use. The line is spiced up during the holiday season with special scents such as winterberry and frosted fir.
When choosing ingredients, Method follows a paraphrased “precautionary principle”: “if there’s a chance it’s bad, don’t use it.” Product formulations start with the non-toxic and biodegradable ingredients on Method’s “clean list”; their “dirty list” includes items they will never use such as phosphates and chlorine.
Method’s bottles are sculpted by noted designers to make the brand stand apart from competitors and help to reach a wider group of consumers than simply the deep greens. One, a now-famous “teardrop” bottle, is shown in Figure 3.3.
At Method, good design is very much a deliberate “added plus” to a focus on sustainability – that element that helps to distinguish their brands from competitors. (As discussed in Chapter 6, this strategy is known as “bundling” additional benefits to add value to sustainable products. As co-founder Adam Lowry explains:
One of the big goals with Method, and why design and sustainability are inextricably linked in our brand, is that if you don’t have the design element, you’re only going to appeal to people who are already green, so you’re not actually going to create any real environmental change . . . To us, “sustainability” and “green” are just aspects of the quality of our product – they are not a marketing positioning . . . I mean everything should be that way. Just build it into the quality of the product and let the experience of the product be the real hero.3
Credible, impactful green marketing
In stark contrast to the old rules for marketing household products, Method’s marketing platform is built on three essential hallmarks: limited or no paid advertising, transparency, and community. All three work synergistically to create loyal followers.
Unlike the primary focus on paid advertising invested by their competitors each year, Lowry and Ryan have historically targeted their users through direct consumer education and engagement that reinforces the fun experience of using the brand and underscores Method’s credibility. To demonstrate the inherent safety of their products and underscore fun, sales brochures feature models cleaning a house in the buff. Bold package design gets noticed on the shelves and reinforces the brand within the home. Indeed, the quality of the experience of using, owning – even discovering – the product, generates word of mouth among excited users who immediately link the brand to fun and authenticity.
Method’s first paid media campaign, launched in 2010 to support their revolutionary 8X concentrated laundry liquid, takes direct aim at mainstream laundry aids that, in their words, feed a household’s heinous “jug habit.”4 Cheeky-tone ads executed in print and online attempt to provoke change and begin a new conversation by imploring presumably “addicted” consumers to “Say no to jugs” or to support a “jug-free America,” position the brand as a David to Tide’s Goliath, and encourage consumers to rethink ingrained habits.
Pluck a bottle of any major brand of dishwashing liquid off the shelf and you might find a statement indicating that the product is phosphate-free or possibly packaged in recycled plastic. But Method, in line with its commitment to transparency, discloses its ingredients on its website. As the nude campaigners photographed in their sales brochures prove, it is clear that Method has nothing to hide!
In addition, Lowry and Ryan have opened their doors to outside auditors. Their products are certified by the EPA’s Design for the Environment (DfE) label and the Cradle to Cradle (C2C) certification. DfE has assessed over 50 Method product formulas to date to ensure that the company uses only environmentally responsible ingredients. Method has already earned C2C certification on 20 of its products and, as of this writing, is in the process of certifying 20 more.
Have you ever seen anyone wearing a T-shirt that has the brand name of a popular brand of household cleaning products on it? Of course not! But some fiercely loyal Method consumers gladly sport T-shirts that they buy on the company website with the Method brand name emblazoned on the front, accompanied by silly slogans such as “Cleans like a mother.”
An important aspect of Method’s approach to green marketing is engaging their users, which the company does offline and, increasingly, online. Facebook page fans make suggestions about products and practices, and participate in contests to win free Method products. At last count, over 6,000 users were following “methodtweet” on Twitter, while Flickr visitors keep up to date on goings-on inside the company – on moving day, employees were pictured walking down the street with office supplies in hand, followed by a mariachi band.
One of Method’s most popular outreach activities is their People Against Dirty campaign, with over 5,300 advocates united in a common passion for Method and its cleaning mission. A blog informs readers of topics related to design, sustainability, and environmental awareness. After signing up on the Method website, and uploading their photo, members receive updates, previews of new Method products, and even an “Advocacy Kit,” including three individual pass-along kits they can give to friends and family. Method is now working on ways that users can interact with one another through the site.
To equip consumers with the information they seek to make responsible product choices Lowry and Ryan wrote Squeaky Green: The Method Guide to Detoxing Your Home, giving home-cleaning tips and exposing the “dirty little secrets” of traditional cleaning products. Method also runs Cleaning Tours in Chicago, Boston, New York, and other cities, setting up pop-up shops on street corners where customers can swap an old toxic cleaning product for a free Method one. While on tour, staffers throw “detox parties” in consumer homes. Guests receive a “plastic bag rehab” tote filled with Method products.
Cleaning up at the checkout
Method’s rule-breaking approach to cleaning not only builds fierce brand loyalty and free word-of-mouth advertising, it also helps it clean up at the cash register – while sprucing up their competitors.
Besides fast-growing sales and extensive retail distribution, Method’s proverbial trophy shelf is crammed with such accolades as being named in November 2008 a “Champion” of the Safer Detergents Stewardship Initiative of the DfE program, commending Method for its voluntary commitment to use safer surfactants (ingredients that help remove dirt from surfaces and do no harm to aquatic life). In 2006, Method was ranked seventh on Inc. magazine’s annual list of the 500 fastest-growing private companies in the U.S.; that year, too, annual revenues grew 80% in an industry that is normally lucky if it sees 4% growth, and PETA named Lowry and Ryan as “Persons of the Year” for creating a revolutionary line of home-cleaning supplies that are free of animal-derived ingredients and are not tested on animals.
Perhaps Lowry and Ryan’s biggest gold star relates to achieving the goal they set for themselves at their company’s founding: to revolutionize and provoke change in the cleaning-products industry. No longer content to follow age-old rules, key competitors now offer their own greener cleaning products: Palmolive’s pure + clear range contains “no unnecessary chemicals and no heavy fragrances,” while P&G’s Pure Essentials Dawn dishwashing liquid has no added dyes or superfluous ingredients and is packaged in a bottle made with 25% post-consumer recycled plastic. Madge has finally cleaned up her act. What a nice reflection on Method.5
The rules have changed. A new green marketing paradigm has arrived, characterized by my seven strategies that will be integral to consumer products marketing for decades to come. Successfully adapting to the new rules and executing the strategies outlined as part of this new green marketing paradigm starts with taking a life-cycle approach to one’s product offering – the subject of the next chapter.
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The New Rules Checklist |
Use the following checklist to assess how well your organization understands and addresses the new green marketing paradigm.
Do we strive to offer a product that balances consumers’ traditional needs with minimal impact on the environment and addresses social considerations?
Do our communications offer practical benefits while empowering and engaging consumers in meaningful ways about important issues that affect their lives?
Do we have a short- and long-term plan of environmental and social-related improvements for our products?
Do we view our consumers with respect as human beings concerned about their health and the state of the world around them?
In what ways can we express our sensitivity to how our customers, employees, and other stakeholders interact with nature?
Do we know how the production and consumption of our products impacts human lives negatively as well as positively? Long-term as well as short-term?
Are we taking pains to ensure that our products are designed for an afterlife versus a landfill? Materials are sourced locally? Our products address regional considerations?
Are we taking advantage of opportunities to use eco-innovative designs and technologies? Are we looking at new business models?
How do our consumers feel about our brand? Do they reward us with their loyalty (pro-cott)? To what extent are they willing to boycott?
Are we sufficiently aware of and linked with our various environmental and social stakeholders?
Are we taking advantage of opportunities to engage employees to help manage and magnify the sustainability aspects of our brand?
Do we have our eyes sufficiently on the longer-term sustainability aspects of our brand?