Ad Age: Green-Marketing Revolution Defies Economic Downturn

Source: Datamonitor's Product Launch Analytics

Source: Datamonitor's Product Launch Analytics

This week’s Advertising Age features a very interesting and timely (Earth Day is this week) article, titled “Green-Marketing Revolution Defies Economic Downturn.” The writer, Jack Neff, starts off the article with the following statement: “Green marketing is turning out to be surprisingly recession-proof.”

Neff points to product launch and sales data that indicate that even during the recession, consumer-packaged goods manufacturers are seeing significant revenue growth for their green offerings.  In fact, according to Seventh Generation CEO Jeffrey Hollender, his company’s sales were up 50% last year and 20% in March 2009 versus March 2008.

The article continues that as opposed to previous recessions, during which sales of green products “had the air taken out of them,” sales of green products have remained stable (and are still growing) in the current downturn.

Neff includes some interesting tips for green marketers at the end of the article, and I would certainly recommend giving it a quick read.

Here’s a link to the full article.

Advertisement’s 12 eco-trends to watch

Hey all – I wanted to share this interesting briefing on about eco trends that present exciting opportunities for marketers and entrepreneurs.

Trendwatching refers to these opportunities as an eco-bounty, and they provide the following definition: “ECO-BOUNTY refers to the numerous opportunities, both short and long term, for brands that participate in the epic quest for a sustainable society. Some of these opportunities exist despite the current recession, others are fueled by it, not in the least because of new rules and regulations. Downturn-obsessed brands who lose their eco-focus will find themselves left out in the cold when the global economy starts recovering.”

Have a great weekend!

Green Hotels: The Business Case for Sustainability

green-coverA chat with the authors of High Performance Hospitality: Sustainable Hotel Case Studies

I had the chance to catch up last month with Amisha Parekh and Michele Diener, two of the three authors of High Performance Hospitality: Sustainable Hotel Case Studies, a lodging industry textbook.  At a time when the Westin is launching its Element line and other hotel chains are playing up their “green” credentials, this book is the first in-depth analysis of the business case for sustainability within hotels.

Amisha and Michele, who also wrote the book with their friend and classmate Jaclyn Pitera, met while they were dual-degree students at the University of Michigan’s Ross School of Business and the University’s School of Natural Resources and Environment.  This book was the outgrowth of a joint master’s project.  Michele currently serves as the Director of Sustainability Strategies at MGM Mirage, Amisha is a strategy consultant for Deloitte, where she is part of the firm’s sustainability team, and Jaclyn is in her third year of the joint program.

The book focuses on eight hotel properties and features detailed analyses of their respective sustainability efforts.  What differentiates this text from other coverage of “green” business is its focus on the details.  As Michele said, “There was no comprehensive book taking a property from design, to construction to operation…from soup to nuts, how a hotel can be more sustainable.  Our intent was to get this information out there to the industry in a very simple way, with a lot of checklists, lessons learned, etc.”

She continued, “There is a matrix at the front of the book summarizing all of the green initiatives [the featured hotels] are doing.  We also categorized the programs based on complexity (how difficult to implement), guest transparency (would it make a positive or negative impact on guests), etc.”

Of course, the economy is top-of-mind for everyone these days, and during our conversation this was a main piece of the discussion.  Amisha and Michele explained that the book is “the business case for sustainability” in the lodging industry, with a focus on the financial benefits to the company to implementing certain steps.  As Michele explained, “At a time when [hotels are making cuts], management sees sustainability as a benefit, helping the organization to consume less water, less energy, and therefore, save money.”

Key takeaways
According to the authors, below are some of the key takeaways from the study.  Although they were derived from their hotel analysis, they are very relevant to all organizations interested in driving change around sustainability:

  • Employee education is key – Green is not something for just the green team to implement, but rather must be part of the company culture.  If it’s part of the culture, it is much easier to implement (and less likely to be cut)
  • Experimentation is important – Some of the products and programs and technologies that the authors studied are new to the industry.  What they found, Michele said, is that “if it’s new to your property, you need to experiment with it, in a few rooms, a floor, at your home –for example a manager installed a low-flow shower head at his home to see how it worked.  Through experimentation, an organization can identify the projects that work, and then execute them more effectively.”
  • One size does not fit all – Amisha said, “We looked at the Ritz Carlton in San Francisco and the Comfort Inn and Suites in Revere, MA.  They both were very strong in educating people about sustainability.  However, the Ritz was behind the scenes, whereas the Comfort Inn was more ‘in your face about it’ to guests.”
  • Financial drivers to going green are there – either from less start-up costs or lower ongoing costs

The authors studied very different hotels, balancing their selection across a number of variables, including size (90-900 rooms), price (mid-rate, convention, luxury), location (urban/rural), diamond rating, guest type (transient, government, business, conventioneer).  In addition, they also considered whether the hotels, all of which are in North America, were existing vs. new buildings, as well as branded versus independent.  However, all were considered green in some respect.

The book did not address the consumer.  However, when asked how customers have responded to hotel sustainability, Michele said, “Anecdotally, the consumer is not willing to pay more for [the green] rooms.  But it has become more of the expectation.  When companies are contracting with hotels for meeting and conventions, those questionnaires now include questions on lighting, recycling, green attributes.  If you want that business, you need to make those efforts.  Corporate clients are increasingly green options.”

The authors also were very grateful for the support they received from the following organizations:

If you’re interested in reading a portion of the book, here’s a link to downloadable chapter, which includes the book’s foreword, executive summary, as well as a case study on the Comfort Inn & Suites in Boston, MA.

Key findings from Direct Marketing Going Green panel

875191As I wrote before, I was on a panel titled “DM Going Green – Separating Fact and Fiction” on January 13.  The session, which was organized by the New England Direct Marketing Association, was interesting and the conversation was lively.

Floyd Kemske, who serves as Editor of NEDMA News and Creative Director at Amergent, wrote up a nice summary from the event.  As it is not online yet, I’m pleased to include select portions of the piece below:

****From NEDMA News****
The session, moderated by Mariah Hunt, Senior Production Manager at Digitas, featured four practitioners from the front lines of the campaign for industry sustainability.

Each panelist provided a unique perspective on sustainability, its achievability, and its benefits. Ben Grossman, Director, Green Marketing & Sustainability Practice, Grossman Marketing Group , for example, has been instrumental in developing a model program for his company, which offsets 100% of its energy use through an organization called Renewable Choice Energy. This allows Grossman Marketing’s customers to credibly claim they make their printed collateral with certified wind power. In addition, Grossman has replaced petroleum-based window material in its window envelopes with corn-based material, which is both compostable and recyclable. Although the corn-based windows cost more, Grossman said, the company absorbs the premium so its customers pay the same as if they’d bought the petroleum-based ones.

According to Grossman, the company’s sustainability practices confer benefits in terms of increased sales, reduced costs, and more productive recruitment. But he advised the audience that sustainability isn’t something you can just say you do. “Customers are smart,” he said, “and they are conversant with the issues. They can discern a real commitment.” Transparency is important, he said. “Give people a way to dig down and investigate.” If you work at it and you are sincere, he said, you can use sustainability as a competitive advantage.

Mary McCormick, Senior Account Manager, Neenah Paper Inc., said her company was committed to manufacturing products with high post-consumer waste content, FSC-certification, and reduced carbon footprint. Before delving into some of the technical aspects of sustainable paper manufacture, she may have confirmed Grossman’s assertion about competitive advantage when she noted that the invitation for President Obama’s inauguration was printed on Neenah paper, chosen because of the company’s sustainability practices.

FSC certification, which is the premier paper certification standard, guarantees a chain of custody for pulp products from the harvest site to the finished product. It doesn’t simply guarantee sustainability. It also addresses social issues (e.g., rights of indigenous peoples) and forest recovery as well. Neenah’s website offers a calculator you can use to find the environmental savings you will achieve by using FSC papers. Neenah has also developed no-new-tree papers, including one manufactured from sugar cane bagasse.

The panel presentations were followed by a lively discussion in which some members of the audience sought proof that sustainability practices could increase sales. None of the panelists could cite such proof, but Ben Grossman stepped up and said that if anyone in the room wanted to conduct a test to determine whether a legitimate green logo would boost response to a mailing, his company was willing to subsidize it. There’s a man who backs up his belief in sustainability!

Financial Times: Why sustainability is still going strong

financialtimes_logoA friend of mine sent along the following link to a piece written by Duke professors Daniel Vermeer and Robert Clemen, about the importance of a refined sustainability strategy during this economic crisis.  Vermeer is the executive director of the Corporate Sustainability Initiative at the Duke Fuqua School of Business, and Clemen is professor and faculty director of the Corporate Sustainability Initiative.

The piece, published last Thursday in the Financial Times, is titled “Managing in a downturn: Why sustainability is still going strong” and is a must-read.  Vermeer and Clemen’s main point is that given the current difficult business climate, organizations will understandably make changes to their sustainability and corporate governance efforts.  However, they warn against doing the bare minimum, as those organizations that fail to show a “commitment will find themselves at risk when the economic conditions improve.”

They make some interesting points, introduce some interesting people like Marcus Roberts, especially in the conclusion, and I wanted to make sure all of you saw it.  Here’s the link to the full story.

News roundup – it’s about the wind

As I have written in the past, renewable energy is critical to our nation’s future – not only from a carbon emissions perspective but also for national security reasons.

My firm’s adoption of and support for renewable energy (we offset 100% of our energy with Green-e certified wind power through Renewable Choice, the firm that both Whole Foods and Burt’s Bees work with to offset their energy usage) has enabled us to offer products and services to our clients that have helped them support the environment, without adding any extra cost to their respective bottom lines.  Because my firm made the commitment more than two years ago to absorb the additional cost of these wind power credits, we have been able to grow our business in turbulent times and attract new and progressive clients.

I am pleased to share two exciting news pieces:

  1. A PDF of an article published last month by the American Marketing Association’s Marketing News magazine (a live link is not yet available).  The staff collected a range of good and bad marketing campaigns from 2008 and asked various marketing professionals to chime in.  They asked me to comment on the marketing of T. Boone Pickens’ wind power initiative (which is now on hold due to economic concerns) – the news brief is on page 1 of the attachment.
  2. An article in The Somerville News (a newspaper in my company’s home market) about recent successes my family firm has had as a result of our green initiatives (one correction I need to make is that the reporter spoke with my brother, David, but refers to him as Steve, who is my father and president of the company).

In this increasingly difficult business climate, I can certainly attest to the importance of corporate sustainability and social responsibility programs as a means of differentiation from one’s competition (not to mention the right thing to do!).  Although organizations are looking harder for lower prices than they have ever done before, they are also very much interested in working with a partner who they respect and can learn from.  If your company does not have sustainability initiatives in place now, I implore you to start thinking about them.  Not only can they help you generate interest from prospective clients, but they can also help you save money (on energy, water, etc) – which is now more important than ever.

Tips from Deloitte: Top 10 list to green your client site

picture21A friend at Deloitte has made me aware of his firm’s “Greening the Dot” program, aimed at helping create awareness among Deloitte’s large employee base that being environmentally-friendly is an important thing to do.  The leaders of this effort frequently send out newsletters with tips to go green and initiatives that the firm is designing to be a more sustainable enterprise.

Not only is this effort a smart play from an employee retention perspective (given the economy, this will be important longer term rather than immediately) but also because it helps Deloitte send a values-laden message to its clients.  As a former consultant myself, I know that this industry is often seen from the outside as tough and unfriendly, and focused purely on numbers and deliverables.  However, I believe that Deloitte’s “Greening the Dot” program helps send a positive message to the outside world.  In the hypercompetitive world of strategy consulting, this can only help.

Below is a “Top 10 list to green your client site” that Deloitte released this week.  Clearly from its title, this is a series of ways that Deloitte employees can help the environment, and do so in very visible ways to the outside world:

  1. Unplug. Unplug “orphan” chargers and power cords which still consume energy when they are plugged in. Nearly 75% of all electricity used to power electronics is consumed by products that are switched off.
  2. Print less. Just because you’re at the client doesn’t mean you can’t reduce the amount you print! Consider having “paperless” meetings. With overhead projectors, we can eliminate the need for paper during meetings.
  3. Print duplex. To reduce your paper consumption, “duplexing“ can be done on copiers and printers.
  4. Use a reusable cup. Use a reusable cup or mug & save those paper or styrofoam cups from going in the trash.
  5. Recycle. Recycle paper, plastic, aluminum, glass, cardboard, and electronics in your local office.
  6. Turn off the lights. Be sure to turn overhead and task lights off as you leave offices and conference rooms. Also, avoid the need for unnecessary lighting by taking advantage of natural light whenever possible.
  7. Power down. Update your power management settings on your laptop to “stand by” or “sleep” after periods of inactivity when plugged in. If you only keep your computer on while you are actually using it, and put it on “stand by” for the rest of the time, you can cut energy use by 55%.
  8. Dress appropriately. Heating and air conditioning are typically the largest sources of energy use in the office. Dressing in layers can help your body adjust to temperature changes in the office. Keep a spare sweater in the office rather than turning up the thermostat or using a space heater.
  9. Travel less. Consider videoconferencing and other technology options to reduce your travel.
  10. Travel green. When traveling, be as environmentally friendly as possible. Bring a reusable mug, carpool and rent the most fuel efficient vehicles, reuse towels and linens, turn off the heating or air conditioning, and turn off all the lights before you leave your hotel room

The newsletter concluded with the following statement: “These small changes will make a big impact. Thank you for taking part in the efforts to make our office a little greener!”

This actionable series of tips, although just a start, provides a simple roadmap to Deloitte consultants of ways to easily go green when on the road at a client site.  None of these tips are difficult to implement, but all are sensible and can have an impact.

Newsweek: Green really means business

I had the chance to read an excellent essay in the 9/22/08 issue of Newsweek, by Zachary Karabell of RiverTwice Research, which I strongly recommend.  The main message of the article is that in an era of high energy costs, a company that has sustainable business practices will likely be able to save money and reap positive financial returns as a result.

Karabell writes that “sharply higher prices for oil and raw materials” have made “reductions in energy use economically viable and strategically important in a way that no amount of green activism ever could.”  He continues by discussing Wal-Mart’s efforts to “green” its supply chain: “To maintain its razor-thin margins at a time of record oil prices, which are raising the cost of importing goods from China, Wal-Mart has radically altered how its products are made and how they’re transported. One example: making detergent more concentrated, which leads Wal-Mart suppliers to use smaller plastic containers, which in turn use less petroleum to manufacture those containers, which can then be shipped with more containers in each carton, which leads to less cardboard, which makes it possible to transport more units on each ship or truck, which then reduces the amount of gas used to get those units from the factory to Wal-Mart outlets. The result: Wal-Mart maintains margins and reduces its resource consumption as well as that of its suppliers.”

Karabell also goes on to mention other profit-driven reasons for companies’ sustainability efforts: international regulatory rules as well as studies showing that companies that receive high environmental marks have shown above-average return on investment and stock price performance.

I have frequently written about the importance of green business practices, not only because they are the right thing to do but also because they help the bottom line.
Whatever the reason, the fact that companies like Wal-Mart, Du Pont and Google, to name a few, are all investing heavily in making their businesses less resource intensive, and therefore more profitable, is a great step.  Our national government has not done enough to create incentives for companies and individuals to invest now to save resources and money in the long run, so it is incumbent on the business community to take the initiative.

Relative to my business, Grossman Marketing Group, we strongly urge our clients to not only operate their core businesses responsibly, but also to make the effort to bring that message of sustainability to their constituents through their marketing and communications campaigns.  Whether it’s a piece of direct mail or a giveaway at a tradeshow, by leveraging environmentally-friendly materials, and clearly communicating what they have done to make their pieces less resource-intensive and the savings derived by doing so, they will send a values-laden message to their core customers and donors that will help reinforce their brand and build relationships for the long term.

Here’s a link to the full Newsweek article.

Boston Globe article on Green Movement in Somerville, MA (where Grossman Marketing Group is headquartered)

Over the weekend, the Boston Globe wrote an article on a Somerville, MA green movement that is catching on. The program, called GoGreen Davis Square,focuses on Davis Square, which is near Tufts University, and it involves local businesses. The goal is to make Davis Square carbon neutral – which for a large group of service-based businesses, would be a huge accomplishment.

I wanted to point to a specific comment from local business owner, Jennifer Park, on the potential business benefits of going green, namely increased customer loyalty, something that I wrote about when I discussed the green efforts of the Lenox Hotel: Click here for that blog post.

Park, who owns two establishments, Diesel Cafe and Bloc11Cafe said of the effort: ‘‘I think it’s built — even increased — loyalty of our customers for the kind of people who care about this area,’’ she said. ‘‘It gets people thinking about this stuff.’’

Grossman Marketing Group is also involved in the program, although we are not located near Davis Square. As one of the largest employers in the city, and an organization that has benefited from “going green,” we believe it is important to demonstrate to other local businesses that going green is not simply an additional cost – rather it is good for the world in which we live, and has major benefits as well.

To read the entire Globe story, please click here: Article