As we’ve continued to evolve the model, I’ve developed another dimension for evaluating sustainability infrastructure: the outside-in perspective. This refers to the level of competitive differentiation and advantage that’s desired by the leadership team. On the scale of laggard to leader, how is your business perceived in the minds of customers, and is it where you want to be? This market-facing aspirational consideration can drive both the internal infrastructure required for a market leadership position, as well as external initiatives to improve marketing, customer experience and ultimately competitive differentiation.

The goal of the market-facing aspiration is to drive top-line revenue through increased purchase and loyalty among sustainability-minded buyers. You can accomplish that goal by strategically managing the following five external considerations:

• Understand your Total Addressable Sustainability Market (TASM). Most businesses have a solid understanding of their total addressable market (TAM.) Yet to drive top-line revenue through sustainability, you need to measure your total addressable sustainability market (TASM): the percentage of buyers in your category that make purchase decisions based on sustainability and CSR factors. You should be asking: how large is this group, how fast is it growing, what revenue does the group represent, and what share of this market do you currently enjoy?

• Understand your brand credibility. You’ll want to know how much permission the market gives your brand related to sustainability before making claims that could be perceived as greenwashing. Among values-driven buyers, how does your brand credibility compare against your competitors on the issues that are directly linked to driving their purchase and loyalty?

• Determine the most effective integration of sustainability and brand strategy. A brand strategy is, in essence, a focused strategic platform that guides every aspect of the business. It should incorporate the 4Ds: Desirable by customers, Deliverable by the company, Distinctive from the competition, and Durable over time. It’s a blueprint for how you do business, as well as for the entire customer experience. How should sustainability be integrated into your brand(s): as a supporting pillar, a new sub-brand or product brand, an ingredient brand or a redefined master brand? You can read more here on this subject.

• Redefine your customer experience. Essential for avoiding greenwashing claims, the customer experience incorporates all of the proof points necessary to build credibility for your sustainable brand. What good is it to put out a press release on your energy savings when you’re not demonstrating sustainability in your day-to-day interactions with customers? If you’re a product manufacturer, you should also consider how to work with retail or channel partners on critical areas like awareness and education. These partners impact your customer experience, and can enhance or detract from the credibility of your efforts.

• Lastly, marketing. If you skip the previous four steps, you put your brand at risk and neglect to build a strong foundation for your sustainably minded customer segment. Assuming you’ve tackled the foundational work, you’ll have the right data to create communications that are highly relevant and desirable to customers. Your insights will guide you in speaking their language and framing sustainability in a simple way that they understand and embrace. Your positioning should be unique from all the green- and eco- messaging that’s currently overwhelming the airwaves, and stand out in a way that supports and drives your brand. Bottom line, your marketing should make it easy for prospective buyers to find, learn about and purchase products and services that support your sustainability goals. And when it’s truly effective, customers should be motivated to integrate sustainability more deeply into their lives.

Many executives are hesitant to actively create a market-facing image related to sustainability for fear of greenwashing claims or uncertainty due to the newness of the field. But assuming you’re taking care of the operational issues that could either support or sabotage your efforts, this five-step process can safely build your outside-in approach to driving competitive advantage and top-line revenue through sustainability.

Sustainability is bigger than using harm-free materials or using less energy. It requires a fundamental shift in thinking, a long-term view and an exploration of new business models. It means redefining what success looks like, such as measuring the number of PCs leased and recycled instead of millions of units shipped per quarter. It’s the difference between GM and ZipCar. In the not-too-distant future we’ll be building products to last, reversing the trend of consumerism and disposable thinking.

This vision of the world is quite threatening to the status quo. We’re facing a tidal wave of change in the coming years, and companies can choose to disrupt their own businesses or be disrupted by an innovative niche player with less to lose and a willingness to skate to where the puck will be rather than where it is right now.

And that puck is speeding towards the future fairly quickly. A recent study by A.T. Kearney showed firms with true commitment to sustainability outperformed industry peers by 15% in the financial markets in the economic downturn. Another study by Aberdeen Group found that top sustainability performers realized 16% higher customer retention rate and an 8% decrease in sustainability-related costs.

It’s time to start asking what the sustainable version of your category could look like in five to ten years, and if you’re positioned today to be a leader or laggard in that world. Perhaps capitalism will never be truly sustainable but, as in horseshoes, getting close counts. Let’s all take a good hard look at the elephant under the table — what we sell and how we do business — and ask ourselves if there’s a better and more efficient way to solve customers’ needs.

“42 percent still find it difficult to demonstrate quantified business value and return on investment (ROI) in order to make a business case for sustainability.” Coincidentally, that’s the subject of a new article series I’ll kick off next week.

“Top performers experienced a 16 percent increase in customer retention rates while driving sustainability-related costs down by an average of almost 8 percent across the board.” A key component of driving top-line revenue is creating products, services and experiences for sustainably minded buyers to boost purchase and loyalty; more on that topic in the coming series as well.

“Increasingly, consumers are demanding that the goods they buy be made in ways that do not harm the environment or the workers who make them. They are often willing to pay more for “green” products or “fair trade” goods. And in the current economic downturn, luxury brands are searching for new reasons to persuade consumers to pay for their high-priced products.”

It makes sense for luxury brands to take a strong stand in this area. “Slow fashion,” like the slow food movement, emphasizes the amount of labor it takes to create a product and support for those small suppliers who provide quality inputs. In the case of Ermenegildo Zegna Group, that translates into improving the water supply for farmers in Mongolia, which not only raised the living conditions of farmers but has also created a more reliable, higher quality cashmere wool.

Let’s hope this trend-setting category continues to build the momentum in sustainable business practices.