Incorporating sustainability into B2B marketing Monica Levy Senior Consultant, B2P (Brands to People)
what is  sustainability ?
…  HP has lost 14 percent of what is known as "brand strength," a measure of consumer sentiment for a brand name...
Steven Chu
? Source: AMA/Fleishman-Hillard 2009 Source: AMA/Fleishman-Hillard 2009 Source: AMA/Fleishman-Hillard 2009
Ways to Think About Sustainability Marketing <ul><li>what we offer </li></ul><ul><li>how we make what we offer </li></ul><...
what we offer
Cow Power
Board Room Green Machine
World’s Best Mum
how we make what we offer
Knauf sustainability story video
Tandus “This is a journey” video
what we believe & how we behave
Knauf “feel good” video
Leadership & Momentum Advocacy & Recommendation Personality Image Social Media Key Messages
<ul><ul><li>Is an admired company  </li></ul></ul><ul><ul><li>Has strong and effective senior management  </li></ul></ul><...
Your Company Comp 1 Comp 2 Comp 3 Comp 4 A B C D E % % % % % Has innovative products 76 69 64 73 72 Has high quality produ...
What not to do
lessons learned <ul><li>Decide (strategically) if and how sustainability marketing delivers an advantage to your business;...
q? Twitter:  @mjlevy Blog: Email:  [email_address] Link:
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  • Will make these slides available; no need to write anything down. Presentation is a collection of images that are useful for discussion; interested in dialogue. Timely topic. 4 months ago, House Subcommittee on Commerce, Trade and Consumer Protection held a hearing called “it’s too easy being green – defining fair green marketing practices.” Converging forces – climate change, regulatory environment response, “greenwashing” swell = new rules for green marketing coming soon.
  • Ref “10 myths about sustainability – scientific american article march 9, myth #1 “nobody knows what sustainability really means.” MOS Video Different perspectives on the topic, in this room and in the world.
  • In 1995, 100K In 2005, 20x that. In 2009, 10x greater still. Point – even tho we may not understand it, we’re pretty interested in it. Ashton kutcher – 1.8 M. Sustainability significantly more popular.
  • UN def from 1987. Green &amp; sustainability not interchangeable. Green is a subset of a larger construct. Companies seen to be sustainability leaders mount efforts in all 3 dimensions.
  • Economic dimension of sustainability Concerns production, distribution and consumption of good &amp; services – popular today to talk about “sustainable cost structures.” See crossover of economic and environmental sustainability in current discussion of cap-and-trade or cap-and-tax policy. Another perspective is on how companies conduct their business affairs and impact of poor behavior/governance on the company from a financial perspective. Patricia dunn, hp story. Claimed spying was legit. David Duncan, former Arthur Andersen. Bad acts can put large companies entirely out of business. Sarbanes-oxley, developed to make companies’ executives responsible and accountable. Doesn’t necessarily ensure sustainability per se, but does make them go to jail if they lie about being a going concern when they’re not.
  • US vs. ROW Waxman-markey ACES (american clean energy and security act) – subject of much contention. Obama administration driving action by year end.w A clean energy title that promotes renewable sources of energy, carbon capture and sequestration technologies, clean electric vehicles, and the smart grid and electricity transmission. An energy efficiency title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry. A global warming title that places limits on emissions of heat-trapping pollutants. The legislation would cut global warming pollution by 17% compared to 2005 levels in 2020, by 42% in 2030, and by 83% in 2050 . A title that protects U.S. consumers and industry and promotes green jobs during the transition to a clean energy economy. Bill everyone hates… business and environmentalists. Environmentalists claim business got all their interests covered in the bill and compromised away what they wanted. Business claims energy/gas costs will skyrocket, jobs will be lost, very small (1 degree) dif in earth’s temp. Want to play you a clip of dr. steven chu, secretary of energy, who explains why we should care about 1 degree.
  • Other side of this landscape -- voters, taxpayers, consumers and workers. Port of longbeach, ca. Prius detail: 2004 – backlog of 22K orders, july 2008 – 6 mo waiting list, April 2009 – prius sales down more than 60% vs. april 2008. people aren’t buying cars, and if they are buying cars they aren’t priuses bec gas prices sub $3. Studies: Yankelovich 07/08 study revealed little movement. Less than a quarter care abt green per se Deloitte – 2% committed, 18% proactive – sust is an “equally important” primary purchasing value. Yale/McKinsey – need to get customers to think more abstractly, more emotionally. Study showed people more willing to buy a hybrid when presented with emotional vs. rational arguments. Don’t understand why products more expensive when they have less, travel less. Explain green benefits clearly. Why don’t some people demonstrate behaviors they know are sustainable? Greenprint classifies 30 behaviors in terms of effort to impact ratio.
  • So what are we supposed to do, exactly? Companies are reluctant to get too far behind and betting consumer will start to “get it.” AMA and Fleishman-Hillard -- fair number of companies are at least thinking about doing something in sustainability marketing. seeing planned action, thinking that the current environment will inspire it believing that downturn will not affect. Pretty interesting bit about “low profile” here suggests companies concerned abt greenwashing or not being able to make case for promotion.
  • Examples here are from both B2B and B2C companies, range of sizes. Point – you don’t have to have GE/IBM budgets to do this well.
  • Success of GE’s eco-imagination has been well-chronicled; ahead of the pack (launched 2005) and aggressively promoted, incl s’bowl spots. sales likely to jump 21% in 2008. Total revenues are expected to cross $17 billion by year&apos;s end. 70 Ecomagination-certified projects which include wind turbines, organic light-emitting diodes , desalination projects, energy- and water-efficient home appliances , even a fleet fuel-efficiency consulting service . Ecoimagination isn’t a separate org w/in Ge – it’s a horizontal. In ALL their businesses. Just announced a hc innovation – digital xray, enables digital image review, thereby eliminating the film and chemicals. Cuts 50,000 analog films, saves 1,900 gallons of chemicals per year. digital x-ray room is designed to replace two GE analog x-ray rooms, saving energy and space = potential to reduce energy consumption by 78%, and save approximately $100,000 USD per year in productivity and material costs based on US national averages. Note for marketers -- # are important Just announced $100M development project for hybrid battery development in its transportation sector, innovations in rail transport. So GE’s marketing has a very strong “design for sustainability” component. Think about what you make – could it be re-designed to save energy, water, materials? What’s your version of the digital x-ray???
  • Opposite of #s. Web environment highly loaded with high-production value materials, seemed almost aimed at employees &amp; decided to share with the external public. Which makes them very engaging, feeling of bringing you in more than if they were talking at you as the target.
  • IBM – similar spaces, but different from GE. Also about “design” but more from an in-use perspective. Also not a separate business… strategy is “integrating environmental responsibility throughout the fabric of IBM’s business.” Not about running a campaign – about setting an “agenda.” Solving traffic problems in Berlin, Shanghai, bringing together hundreds of leaders to figure it out. Not about selling ibm stuff, but it’s still about selling ibm stuff.
  • Their communications have more tone/attitude vs. GE’s, which are a little more sweet and less edgy humor. Ibm’s marketing follows along in the tradition of its reinvention that started back in the early 90s (after Fortune cover depicted it as a dinosaur). Tone is irreverent, but direct. Like, GE, heavy use of #s. site with detail on how much the energy for stuff from electric blankets to hot tubs costs you (computer/TV - $20/year. Hot tub - $200/yr)
  • Energy efficiency for buildings, renewable materials for auto interiors and hybrid vehicle batteries/advanced power solutions are johnson controls’ core offering. Product approach to sustainability is double-fold – both what they offer, and how they make it. More testimonial approach than either GE/IBM. Addressed specific data that indicated jci could improve its customer focus relative to competitors. sustainability can serve as strategic lever to grow business. Not about “smart” – JCI not credible in the invention space the way GE and IBM are. About “ingenuity,” more macguyver than einstein. Important to know how to talk about your sustainability achievements, what voice you can use is based on character of your brand in the minds of your customers. Just because you’re “sustainable” now doesn’t give you cart blanche to change 180 degrees esp if you own some things you want to keep.
  • A smaller company, soda stream is still a fairly large company, in 30 countries around the world. Value for Money : Great savings compared to pre-packed carbonated water and beverages. Environmentally-Friendly : Soda-Club is an &amp;quot;Active Green&amp;quot; solution that minimizes the huge eco-footprint caused by the manufacture, transport and waste of plastic bottles. Convenience : No need to carry heavy bottles from the store. The Soda-Club system is simple to use and requires no batteries or electricity.
  • Mktg – attempting to put the human face on the issue, avoiding the numbers and focusing only on the emotion.
  • How we make it/how we move it/– for businesses that have offerings not directly tied to environment/energy reduction, opportunities exist in discussing how you make what you make and the arrangements you use to get products to market. This is where sustainable supply chain fits in, along with company efforts to meet GHG and other reduction goals, etc. Recycling is one topical area here. What is most highly recycled product in US?
  • Car batteries are 97% recycled. Jci is world’s largest consumer of lead and world’s largest recycler of batteries. cradle to cradle approach.
  • Typical (think “pink”) insulation product is full of chemicals – phenol, formaldehyde, acrylics, artificial color – environmentally-friendly in terms of outcome, but not development. Knauf figured out a better way, producing the product with natural components. Playing on the brown color is unique, esp given wide recognition of pink. Hugely important in construction of commercial buildings seeking LEED certification, where material choice can be as important as design and construction methods. “ Feel good factor” is huge for consumers, particularly those driven to build new or remodel existing homes for improved energy-efficiency.
  • Another cradle to cradle initiative from tandus. Carpeting is actually very bad for the environment – from the making of the fibers to the dying to the installation. But tandus figured out how to end-run that…
  • Another version of digital x-ray example. If you can’t reinvent the product itself, can you reinvent something that surrounds your product? Kelloggs testing shorter, fatter boxes that use 8% less material. Sunchips (frito-lay) compostable packaging, repurposing with terracycle. Sow Tomorrow packages its line of organic soaps in plantable packaging.
  • For distributors/retailers, sustainability is all about the supply chain. Where and how you get it, how your store it, how you ship it out. Walmart’s aspirational goals -- 100% renewable energy, 0 waste, Sustainable products – look at footprint: buildings (energy and water efficiency), truck fleet (reduce emissions by 50%), supply chain, commitment as part of clinton initiative to reduce plastic bags by 30% globally Backstory is important -- jewelry – traceability; can enter prod # on website, see where gold/silver/gemstones come from.Chain of custody of timber to eliminate illegal logging (p’ships with ngos); e.g. pictureframes EVERYONE can do this – apart from I’net businesses, likely to have some element of ship in/ship out. AT&amp;T invest $560M in alt fuel vehicles, and talked about it in a pretty compelling way. Remember, they’re a PHONE COMPANY.
  • Not a tv spot – web only. Really effective marketing channel to socially-conscious audiences. Don’t print sustainability reports!
  • Google contributes significant resources, including 1% of Google&apos;s equity and profits in some form, as well as employee time, to address some of the world&apos;s most urgent problems. Nothing to do with e- , internet, search or core business. The Small Things Challenge , Intel and Kiva and Save the Children. This is a cause-marketing exercise where Intel will donate 25¢ per click for you to help. Tons of earned media. jCI Blue Sky Involve - 7,500 employees at 300 locations around the world volunteered more than 70,000 hours on Blue Sky projects in their communities. 6000 cisco employees (15%), logged 160,000 hours in volunteering activities. Online tool that match their skills and interests with needs of community orgs. Most companies efforts fall into: Socioeconomic Development Programs Grants and Partnerships , philanthropy Employee Volunteerism Crisis Relief Inclusion/diversity New era of “values-oriented marketing.” this kind of activity is going to be increasingly important. REAL articipation of senior executives is key, not just photo op. Used to be, a company didn’t have to apologize for making money, being successful. But attn to executive salaries, bailouts, etc. is calling attn to corp citizenship in a more heightened way, subject to greater scrutiny. Blogosphere is ready to pounce; ignore them @ your peril.
  • Jci - implications of sustainability as an important way to attract and retain talent was critically important in that brand development initiative. Deloitte study found that sustainability most important to younger people. Increasing # of green student communities on facebook, other social media Sustainability as internal way of connecting employees to corp’s values can have massive impact on company – e.g., Alcoa’s efforts led to 8% reduction in use of water. Sun’s “every job is an eco job” improved employee understanding and agreement on sun’s environmental and sustainability measures. 150M google results for “green jobs”. Career eco example of an aggregator bringing together employers and employees who are seeking environmentally/ socially responsible work(ers). Facilitating values alignment – again, if your org has sustainability as a value, you can easily stick your toe in the water on one or more of these things. Knauf video – employees will really get into it if you let them know it’s ok.
  • Measurement of ROI of sustainability marketing can be measured in the same ways that we measure, or attempt to measure, the ROI of any other marketing initiative..
  • Think we want to get at 2 things … how IMPORTANT is sustainability to your target, what are the dimensions that MATTER, and HOW DO YOU DO ON WHAT MATTERS MOST relative to your competitors Can do this with qual or quant – usually, quant will be more convincing, esp if you have large enough sample to be stat sig
  • This is the money chart. If your data shows that sust is the 3 rd most important driver of choice, and you’re doing less well than competitors, you have excellent chance of making your case for investment, tho would caution you against “predictive modeling” as choice drivers can combine in unpredicable ways.
  • A few words about greenwashing. It’s not about a logo. A kazillion of these out there. Fujitsu siemens - Lg – refrigerator issue Apple – trouble w/competitors over definitions/lack of transparency Poking the bear. (US House subcommittee)
  • Lexus – don’t overstate. UK ad stds auth ruled text which clarified claim wasn’t prominent, zero implies car causes little or no harm to environment. Don’t let rhetoric outpace actual improvements. Say, “uses 30% recycled content” and stop, not “greenest product ever made.” Shell – twice slapped by britain’s ad police for exaggerating its commitment to green issues. “power to create a cleaner, safer world” drew fire. Greenpeace on the case, saying shell going backwards on renewables, spending billions to get dirty oil from tar sands while pulling funding from wind and solar projects. BP also fell prey to this with “best way out of energy fix is energy mix,” and activists publicized that alt energy accounted for just 7% of company’s spending. Ad companies claim unfairness, saying ad standards auth doesn’t understand green energy, but falling on deaf ears. Greenwashing gets a lot more attention. Nestle – same thing, claims “most environmentally responsible consumer product in the world.” water claims not limited to packaging – also big backlash on whether the water itself is better. Tap water is more frequently tested for safety, and EPA which oversees tap, is more stringent than FDA, which oversees bottled. “Think Outside the Bottle” staging blind taste tests that most people fail. Pepsi now printing “public water source” on aquafina bottles. THERE ARE PEOPLE SITTING AROUND WITH LITTLE ELSE TO DO EXCEPT TRIP YOU UP AND MAKE YOUR LIFE MISERABLE.
  • GE Nuclear business, Dumping PCBs in the Hudson and delaying cleanup EnviroMedia’s Greenwashing Index – Greenwashing Index Scoring Criteria When you rate an ad with the Greenwashing Index, it will generate a score based on your response to the following statements. Your score will be included in the ad’s overall score and your comments will be added to the tally. Scoring is similar to golf: high scores are undesirable (for the advertiser). THE AD MISLEADS WITH WORDS Do you believe the ad misleads the viewer/reader about the company’s/product’s environmental impact through the things it says? Does it seem the words are trying to make you believe there is a green claim when there isn’t? Focus on the words only — what do you think the ad is saying? THE AD MISLEADS WITH VISUALS AND/OR GRAPHICS Do you think the advertiser has used green or natural images in a way designed to make you think the product/company is more environmentally friendly than it really is? THE AD MAKES A GREEN CLAIM THAT IS VAGUE OR SEEMINGLY UNPROVABLE Does the ad claim environmental benefits without sufficiently identifying for you what they are? Has the advertiser provided a source for claims or for more information? Are the claims related to the company/product? THE AD OVERSTATES OR EXAGGERATES HOW GREEN THE PRODUCT/COMPANY/SERVICE ACTUALLY IS Do you believe the advertiser is overstating how green the product/company actually is? Are the green claims made by the ad believable? Do you think it&apos;s possible for the product/company to do the things depicted/stated? THE AD LEAVES OUT OR MASKS IMPORTANT INFORMATION, MAKING THE GREEN CLAIM SOUND BETTER THAN IT IS Do you think the ad exists to divert attention from something else the company does? Do you believe the relevant collateral consequences of the product/service are considered in the ad? Does it seem to you something is missing from the ad?
  • “ greensushing” -- This is the guy from webex saying essentially “don’t use our product to substantiate your green claims on holding mtgs via telcon and not travelling.” (Too much the opposite direction?)
  • Great resource FTC also publishes “ green guide.” (keep your eyes open for updates, subject of House hearing this week).
  • Other great resources LinkedIN Facebook Twitter Greenbloggers AMA (mgmt, not mktg!) ASQ has launched initiative called SRO (socially responsible organization) to help world understand business case for social responsibility. Publishing monograph series @ JCI, Aurora Helath, Intel, Manpower, MillerCoors. Formation of think tank
  • 1. Do Your Homework Find out the green expectations of environmentalists and your consumers. Ensure that the green claims of your business, product or service are true and consistent with their expectations. It’s also important to look at your entire business chain and check whether any aspect of your operations contradict your green claims. 2. Be Honest and Humble If your company or product is not 100% green, admit it. Nothing is perfect and everyone will appreciate your honesty. Acknowledge the areas of your product or business that are not yet green and commit to work on it, don’t wait for others to point out the discrepancies. State your green claims as it is and don’t exaggerate and make it sound as if you’re saving the planet. Let the consumers, media, NGOs and environmentalists tell your green story and blow your trumpet. 3. Keep it Transparent Make it easy for your customers to understand and check the green claims you are making. Are your green claims certified based on established ecolabels, methods or experts? The information on your green claims and relevant details should be made accessible to the public. 4. Work with Stakeholders Engage your stakeholders, both internal and external, in a dialogue on your green marketing. Are your green claims acceptable to your staff, suppliers, customers, NGOs and the community? Gather feedback from them on whether you’re on the right track or seen to be greenwashing. 5. Focus on the Journey Emphasize in your green marketing that going green in your business or product is a journey and not the end. Acknowledge areas that are environmentally unacceptable, commit to improve those areas, and seek feedback and help from your customers and the public on your green journey.
  • Nj Bma Sustainability Marketing

    1. 1. Incorporating sustainability into B2B marketing Monica Levy Senior Consultant, B2P (Brands to People)
    2. 2. what is sustainability ?
    3. 5. … HP has lost 14 percent of what is known as &quot;brand strength,&quot; a measure of consumer sentiment for a brand name, since the scandal began and has dropped from third place in its sector to seventh. … pushed down its reputation for openness, honesty and trustworthiness.
    4. 7. Steven Chu
    5. 9. ? Source: AMA/Fleishman-Hillard 2009 Source: AMA/Fleishman-Hillard 2009 Source: AMA/Fleishman-Hillard 2009
    6. 10. Ways to Think About Sustainability Marketing <ul><li>what we offer </li></ul><ul><li>how we make what we offer </li></ul><ul><li>what we believe and how we behave </li></ul>
    7. 11. what we offer
    8. 14. Cow Power
    9. 16. Board Room Green Machine
    10. 19. World’s Best Mum
    11. 20. how we make what we offer
    12. 23. Knauf sustainability story video
    13. 25. Tandus “This is a journey” video
    14. 28. Challenge
    15. 29. what we believe & how we behave
    16. 32. Knauf “feel good” video
    17. 33. Leadership & Momentum Advocacy & Recommendation Personality Image Social Media Key Messages
    18. 34. <ul><ul><li>Is an admired company </li></ul></ul><ul><ul><li>Has strong and effective senior management </li></ul></ul><ul><ul><li>Is customer focused </li></ul></ul><ul><ul><li>Is a market leader </li></ul></ul><ul><ul><li>Provides high quality products and services </li></ul></ul><ul><ul><li>Is an attractive employer </li></ul></ul><ul><ul><li>Is committed to sustainability </li></ul></ul><ul><li>Relative importance of attributes </li></ul><ul><ul><li>Overall brand favorability </li></ul></ul><ul><ul><li>Likelihood to purchase </li></ul></ul>Attributes <ul><li>Relative performance </li></ul><ul><ul><li>Versus peers </li></ul></ul><ul><ul><li>Across businesses </li></ul></ul><ul><ul><li>Region </li></ul></ul>
    19. 35. Your Company Comp 1 Comp 2 Comp 3 Comp 4 A B C D E % % % % % Has innovative products 76 69 64 73 72 Has high quality products and services 75 69 67 81 69 Is committed to sustainability XX% XX + 2% XX + 14% XX +%9 XX%+6% Has recognized and respected brands and branded products in the marketplace 73 69 65 81 63 Promotes value in products and practices 70 67 64 77 E 56 Offers advanced technology 70 67 67 73 75 Effectively combines technologies and products to create integrated solutions 69 67 68 67 78 Is a market leader 68 69 71 71 66 XX% XX + 2% XX + 14% XX -%1 XX%+6% Provides useful knowledge and insight into evolving market and end user needs 64 59 61 62 59 Is easy to do business with 64 61 61 62 56 Is an attractive employer 63 57 59 60 63 Is different from other [CATEGORY] companies 60 61 60 56 41 Their products and services provide excellent value for money 58 65 63 62 63 Offers thought leadership 56 57 53 65 53
    20. 36. What not to do
    21. 40. resources
    22. 43. lessons learned <ul><li>Decide (strategically) if and how sustainability marketing delivers an advantage to your business; convince execs with competitive research </li></ul><ul><li>Have a scorecard with clear and achievable goals; talk about real progress against them, ensure they’re meaningful to customers </li></ul><ul><li>Examine the supply chain and ensure as much transparency as possible </li></ul><ul><li>Involve and work with stakeholders, especially those who disagree </li></ul><ul><li>Educate employees in understanding the importance of sustainability to the company and its reputation, make them ambassadors </li></ul><ul><li>Be honest and humble; know and follow the guidelines; resist hype and overstatement </li></ul><ul><li>Use available resources (gov’t & industry guidelines, professional networks & industry associations) to stay informed in a fast-moving arena </li></ul><ul><li>Be an available resource to your internal or external clients </li></ul><ul><li>Learn by doing – help others learn by sharing </li></ul>
    23. 44. q? Twitter: @mjlevy Blog: Email: [email_address] Link:
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