Corporate sustainability can be much more than reducing carbon or water footprint. More than LEED and ISO-14001 certification. More than philanthropy and cause marketing… or reduced packaging… or a greener and more accountable supply chain.

These are items found in the sustainability section of just about any company website, usually generated out of a desire to cut costs, reduce risk, or demonstrate a level of corporate citizenship. A solid sustainability strategy may sit at the corporate level, and the company may be lauded in the press for its sustainability efforts. Yet if sustainability isn’t activated at the brand level in an authentic, differentiated way, you are likely to lose competitive advantage over time.

As a brand owner, why should I care?

For large, mass-market brands, the common objection is that consumer demand isn’t sufficient to justify the time and resources to give sustainability much thought. And in many cases, that’s exactly right. According to our US research, only 19% are actively seeking green in their purchase decisions, while 25% are actively turned off by any mention of sustainability. Most of the population falls somewhere in between. (I’ll write about the global opportunity in a future post.)

Yet there are plenty of incentives for any brand owner to be keenly interested in sustainability that have nothing to do with current market demand. Demand will be generated from competitive, NGO, distribution and government pressures, not vice versa. If you’re not actively figuring out how your brand is going to play in this space, you’ll show up late to the party and be ill-prepared to tell a relevant, credible story. Why?

• If you’re a manufacturer, then you know that Walmart and other leading retailers are asking for sustainability metrics at the SKU level; eventually retailers will serve as consumer guides in the world of sustainability, editing products to meet their standards and publicizing their own supplier scorecards.
• As a marketer, you know that social media is magnifying the voices of active consumers wanting to see greater sustainability commitments from corporations.
• Third-party rating systems like GoodGuide.com are emerging whether you want to participate or not, reaching your consumers with a “peek behind the curtain” on your products and your company.
• Consumer interest in topics like fair trade or deforestation is increasing with news coverage and NGO campaigns.
• Increased government regulation is anticipated across a spectrum of industries.

Bottom line: the sustainability trend is gaining momentum, and building credibility in sustainability takes time… years of time. If you want to be ready to dial up sustainability in your brand, products, services and experiences in the next 3, 5, 10 years when the market is expecting it, now is the time to start defining what sustainability means in context of your brand.

“Skate to where the puck is going to be, not where it has been.” – Wayne Gretzky

Decoupling brand from marketing

To activate sustainability at the brand level, you must first decouple “brand” from “marketing.” More than a logo, tagline or campaign, brand is the sum total of the company’s or product’s user experience (how you show up in the market) plus the perceptions that your stakeholders have of your brand. You might say that “brand” is the connective tissue between your company and the market.

So if you are a CMO, VP Marketing, Brand Manager, etc., you should be just as responsible for your brand’s actions (current and planned) as well as its voice. If you sell in China, you should be familiar with facilities management as Chinese consumers prioritize product safety.  If you work for a retailer or manufacturer, you should be thinking about how supply chain, viewed through the lens of sustainability, could become a competitive differentiator. And while we’re on the subject of competitive differentiation, are you thinking about how your corporate sustainability initiatives could be transformed into an initiative brand (like GE’s Ecomagination or Marks & Spencer’s Plan A)? We’re just scratching the tip of the iceberg here. Alas, the silo structure, division of labor and your own time constraints often makes this a challenging proposition, but you should still be a strong influencer internally on key areas that will ultimately impact your brand’s reputation and revenue for the long term.

Four questions every brand owner should ask

Many brand owners take an ad-hoc approach to sustainability, torn between a desire to capitalize on the green trend and legitimate fears of greenwashing claims or of going “off-brand.” The ad-hoc approach might take the form of a consumer-friendly green microsite, a retail promotion, a green packaging initiative, or a Facebook campaign. Maybe you launch a greener product to counter a competitor’s move.

But let’s back up for a second. These are tactics… what is the strategy? Regardless of current market conditions or “green” opportunity, every brand owner should be asking four questions:

• What does sustainability mean within the context of my brand…  today and 5 – 10 years from now?
• What role should it play given my target audience and market dynamics? Should we be a leader or follower given our culture?
• Do we have the credibility and relevant proof points required to avoid greenwashing claims? Will we in the future based on our current strategy?
• How should it manifest in the brand portfolio, positioning and customer experience based on the above analysis, and what initiatives should be prioritized?

Let’s look at each of these questions in more detail.

• Definition: Sustainability encompasses both social and environmental components. You may want to dial up just one, or both, depending on your brand and business. How are you going to define sustainability in a way that is relevant, authentic and helps deliver on your overall brand promise?

• Role – Market Facing:  Based on your target audience, sustainability can take one of the following roles:
  • Green behind the scenes — not overtly visible to consumers but you have a strong story for those who want it. Walmart is a good example of this.
  • Green in a supporting role – Sustainability appears as a proof point for your brand in products, services and experiences, yet is not the dominant promise. For example, P&G’s Future Friendly initiative brand is a selling point, but Tide and other P&G product brands are not repositioning themselves to focus on green.
  • Green in a starring role – Sustainability is the core promise for the brand and appears throughout all touchpoints. This is the realm of traditionally green brands like Tom’s of Maine, Seventh Generation, etc.
• Role – Internal: Do you want to be a leader or follower in your industry? This is largely determined by your internal culture and the mindset of your executives. It depends on the level to which innovative thinking is encouraged, and whether your company is willing to invest in long-term transformation of categories and markets. Someone’s going to lead your category (if they’re not already) and the leaders will define the baseline expectations and the playing field for the followers. If you’re going to follow, you should know the tablestakes areas of sustainability that you must be improving to ensure your brand isn’t put at risk.
  • Interface Flor is a great example of a company taking a leadership role in sustainability, exploring new business models and pushing to change how carpet is made, sold and reclaimed.
  • In the consumer arena, Burt’s Bees worked with other natural competitors to develop their own certification called The Natural Standard, which benefits themselves while casting mass-market competitors in a negative light.
• Credibility: This is absolutely critical for you as a brand owner to understand the level of credibility your brand brings to the table. In our Sustainable Brand model, sustainability must never show up more visibly than you have the credibility to support it. So even if your market isn’t demanding it today, you should be pushing internally to build a competitive level of credibility for tomorrow.

• Manifestation: Think of this in terms of a roadmap. Given the above answers, what are the things MUST you start doing in order for sustainability to show up in a relevant, unique way over the next 5 years? What must you STOP doing? Initiatives should be prioritized in terms of 1) removing risk, 2) capturing competitive opportunity, and lastly, 3) innovation and transformation.

So instead of passively waiting for operations to come up with something “green” you can try to talk about, why not actively drive a pipeline of on-brand strategic sustainability initiatives to support your retention and acquisition goals?

If you’re interested in learning more about our audit and 6-step process for Building the Credible Sustainable Brand, please contact Jennifer Rice at jennifer at fruitfulstrategy.com. We’ll help you benchmark your brand against competitors, determine your brand’s definition/roles/vision for sustainability, and help you close the credibility gaps.

• San Francisco, hosted by Williams Sonoma – Week of October 4
• Twin Cities, hosted by 3M – Week of November 29
• New Jersey/NYC, hosted by Johnson & Johnson – Week of December 6
• Austin, hosted by AMD – Week of January 24

In addition to my course on Brand Strategy, the seminars include training on Communications, Product Design, Supply Chain and Data & Metrics taught by experts in those fields who share industry case studies and provide you with state-of-the-art best practices you can apply in the work that you do. Classes are limited to 30 students, so there’s a good opportunity to get some direct instruction on issues critical to you and your job specifically.

This is the same one-day seminar that I lead on a custom basis for corporations at 5x the cost, so it’s quite a bargain. And as an instructor, I’m able to offer you 20% off the tuition fee for however many days you’d like to attend.  You can register here using the code spksbs. You can also call my friends at Sustainable Life Media at 415.626.2212 for more information.

I’ve been working on our own proprietary research studies over the past several months, and the findings will be made available for sale next month in our new Insight Reports. These are not traditional research reports; instead, data is presented within the context of business and marketing opportunities for using sustainability as a platform for growth. They’ll also include decision tools like our 5 Sustainable Brand Stages and brand portfolio mapping to help make the data actionable for your business.

Keep an eye on the blog, though, and sign up for our newsletter if you haven’t already. I haven’t given up on offering “bite-size chunks” so that you can get a glimpse of what’s cooking behind the scenes. More soon…

I’ll be running a half-day workshop on Monday, April 6 on Building the Credible Sustainable Brand (4th one on this list). It builds on the webinar I conducted a few months ago on the same topic, and we’ll be doing hands-on exercises to

• identify the right brand strategy and roadmap for your business
• map & enhance your customer experience to bake in sustainability (because what your customers don’t experience, they won’t believe) and
• identify the implications for internal culture and marketing

I’m still in the process of designing this workshop so if there’s anything specific you’d like to see included under the topic of building credibility, please post a comment here. Thanks and I look forward to seeing you in Monterey!

1. Be proactive

2. Be transparent

3. Know your limits

4. Be relevant

5. Borrow credibility

6. Leverage brand strengths

7. Create a brand strategy

8. Be consistent

9. Educate

10. Engage

This list gives some good fodder for future blog posts, so stay tuned.

It makes intuitive sense that what people say is important isn’t always what motivates them at the moment of choice. And yet we read poll after poll that trumpet astonishingly high percentages of consumers who say “green is important” or that they’d spend more money on green products. This is like saying that 77% of all women want to marry a rich guy. I’m sure we all recognize that this statistic is neither realistic nor helpful.

What’s more reasonable is looking at actual purchase trends of green products.  Unfortunately what’s lacking here is the answer to why consumers made the decision for one brand over another. In a recent post I wrote about sizing your total available sustainability market (TASM); in other words, how many women are in the market for a nice guy. As I’m sure you’ve guessed by now, this market sizing isn’t based on what consumers say but what they actually do. We look at how many women are actually dating nice guys now.

After we identify and size the market, we then seek to understand what is driving their decisions in the moment of choice. Again, this isn’t based on what they say is important, but through research techniques that unveil the top attributes that actually motivate their choice. In the dating world, the top 3 attributes that motivate choice of a nice guy could include listening, thoughtfulness and “makes me feel special.” In the sustainability space it might be education, toxin-free and “makes me feel like I’m making a difference.”

So now you’ve figured out your market and what matters most to these buyers, whether specific attributes or emotional benefits. Now the question is, how does your business rate versus other alternatives in the market? You might find that you rate quite low on the #2 purchase driver, but you get high marks for the #4 purchase driver. This tells you what to promote in marketing today while addressing the sources of dissatisfaction that may be hindering sales.

This isn’t an easy process. But what you’ll get out of it are quantifiable steps to boost revenue, reputation and competitive advantage from sustainability.

Without a CEO mandate, business units usually have little incentive to deviate from what’s been working in the past. Sustainability and CSR initiatives have safely been tucked away behind the scenes, dealing with internal and supply chain issues that reduce risk and cost to the business. Objections to customer-facing sustainability initiatives range from “Why put our neck out and risk greenwashing charges?” to “It’s still a niche market” and “Why would we promote our values for commercial ends? We’re doing this because it’s right, not to make money from it.”

Perhaps they do see that sustainability is beginning to go mainstream, but it hasn’t become a burning platform for action. And this is the big opportunity for sustainability pros. It’s time for you to change the conversation.

As pointed out in a recent EthicalCorp article, “Corporate responsibility teams could do more to articulate a clear business strategy for their company that will grow sales…. Social and environmental issues are increasingly seen as new business opportunities, rather than risks to be managed. But translating this knowledge into practical business plans is easier said than done.”

You’ll need to craft a compelling story and business case for taking sustainability to the next level within the organization. And that story must to be told using the language of numbers, making a clear connection between sustainability and top line revenue.

How you do that is the subject of a new series of articles that will cover:

• identifying your total addressable sustainability market and your share of that pie
• learning what you can do to protect your current base and attract new customers
• enabling customers to experience your company as a sustainable brand through key touchpoints
• engaging customers to boost loyalty and grow the sustainability market
• communicating in a simple, relevant and credible way with customers

Let’s tackle the first one now. TAM, or total addressable market, is the sum of all of the potential sales that your company could make if it didn’t have any competition. In the sustainability world, we need to identify your TASM, or total addressable sustainability market, to begin building the business case.

TASM is based on an understanding of how many buyers are motivated by sustainability-related attributes when they purchase or recommend a product. It’s crucial to your strategy, and yet secondary data on this information is slim. LOHAS is a wellknown segmentation model originally designed for health & wellness, but it may or may not apply to your category. I would question whether the same segmentation model holds true across all categories including food, electronics, personal care and energy.

Without knowing exactly how many buyers in your market care enough to adjust their purchase and loyalty behavior, it will be hard to justify any customer facing initiatives. Even if the market is small for your category, it may be growing at a rapid enough pace to make a dedicated effort worthwhile. Side note: don’t believe what consumers tell you; TASM should be based on behavioral data, not a poll.

Step two is knowing what share of this market you currently own versus your competitors. Are you leading or lagging? If you increased share by one percentage point, what is the resulting revenue that you could use to fund additional projects? If you cede competitive advantage among this group to a competitor, what percent of your customer base is put at risk?

The next post will address the customer insights needed to move the needle and increase your share of this rapidly growing market.

Sure, I could have just checked out Greenpeace’s Electronics Report, but I wanted to go through the typical buyer process and see what I could learn. To my surprise, Best Buy had no information on the subject… not on signage, and not when I asked an associate. While I later found a program on their website called “Greener Together” buried in their Corporate Responsibility section, I didn’t see any evidence of it in store. At the other end of the spectrum, it wasn’t hard at the Apple store to learn more about “the world’s greenest lineup of notebooks.”

I often hear from executives, “we don’t think the market is ready for sustainability. It’s not coming up in our research as an important purchase attribute.” I’d suggest that consumers can’t care about something they know nothing about. It’s the role of retail to help consumers make educated choices. Leading manufacturers should not only be demanding sustainability from their supply chains, they should also be pushing retailers — as their main customer point of contact — to help educate the market on the choices available.

A few retailers are paving the way. Marks & Spencer in the UK is probably one of the best-known examples, although US retailers are beginning to gain traction. Home Depot is my favorite US example with Eco Options, which includes a product certification program covering over 3,000 products, product labeling, in-store signage, and even a magazine. They’ve done an excellent job evaluating the entire customer experience and enabling customers to make informed purchase choices.

Other good examples are Whole Foods, the earliest pioneer in careful product selection, Staples EcoEasy program, and REI’s Ecosensitive labeling (although it’s hard to find from the home page). As much as Wal-Mart is doing in sustainability, I’m not seeing much action in customer-facing labeling or education… that said, I don’t live near one, so if you happen to have information on what Wal-Mart is doing in the customer experience I’d love to hear it.

Bottom line: embedding sustainability into the customer experience is crucial for moving the ball forward on these issues with customers. No one cares about a press release; they care that you’re making an effort to help them make smarter choices. This is how you not only attract existing values-driven buyers, but expand the entire market.

Oh, in case you’re interested, I ended up with a 15″ MacBook Pro. I’d like to say it was for all the information they provided on environmental considerations, but it’s just an unbelievably cool computer. Bye bye PCs!

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.