Green Fallout. The era when green marketing meant sunny logos and big environmental claims is over. Just ask BP.

Entrepren In this Entrepreneur.com article, author Jason Daley uses BP green's marketing tactics as a case study for the overall savvying of consumers in America. No longer does green advertising equal sales. Today, the second wave of green marketing has taken hold, and companies are succeeding in winning consumers with transparency, and continued green innovation that's better for people, the bottom line and the planet. 



Posted July 26, 2010

By Jason Daily, Entreprenuer Magazine

When sweet, red crude began sticking to the marsh grass in
coastal Louisiana in May, it was the end of an era for many people,
including shrimpers, fishermen and a huge swath of the Gulf Coast
tourism industry. But it was also, at least symbolically, the end of an
era for the marketing world.

For more than a decade, BP had
flooded the media with advertisements showing solar panels, windmills
and waving fields of grass without a drop of oil in sight. It changed
its name, KFC-style, from British Petroleum to BP to de-emphasize its
claim to fame: hydrocarbons. The company adopted a stylized green sun as
its logo and rolled out the slogan "Beyond Petroleum."

But when
the company's Deepwater Horizon offshore well began blowing tens of
thousands of barrels of crude into the Gulf of Mexico each day, no
outlay of advertising dollars could change the cold, hard facts: The
company that had cultivated the greenest image in the oil industry still
derived more than 99 percent of its revenues from gas and petroleum.
For consumers who had been fed the image of the company out tending
windmills, the revelation was almost as shocking as the images of
oil-soaked pelicans.

The BP blowout was the swan song of an old style of green marketing,
one in which companies could make green claims and hope that no one
would look over their shoulders. In the last five years, a new type of
green marketing has taken hold, and it has high standards.

It's no
longer enough to say you're green in your advertising. It's not even
enough to have one or two flagship green products in your line or to
screw in a few compact fluorescents and send out a press release

. In a time when consumers and
watchdogs measure the environmental impact of raw materials and
industrial processes, packaging and transportation, a company marketing
itself as green needs to have sustainability built into its DNA, or at
least painstakingly retrofitted into its culture. But even more
important, green products have to be good products.Research has shown that consumers don't respond simply because
something is environmentally friendly. "Being green in and of itself
isn't a differentiator except with a small group of consumers," says
Joel Makower, executive editor of GreenBiz.com and author of Strategies
for the Green Economy. "Green succeeds only to the extent that it means
better–it's cheaper to buy, it operates better, it lasts longer, it's
cooler for my image. People do want to do the right thing, but they
don't want to go out of their way to do that. They love 'change' when
it's a noun; they hate it when it's a verb."

Back in 2006, Matt Kolb, a real estate agent in Boulder, Colo., had his
"change" moment when a client decided to ride around town on a rented
bike to look at houses. Kolb lost the client when he went with a private
seller he'd met on his bike ride, but the encounter led Kolb to form
Pedal to Properties, a real estate firm that offers agent-led bike tours
to houses for sale. Last year, after the company became a major player
in the Boulder area, Australian entrepreneur Tim Majors approached Kolb
and bought half of the company to help franchise the
concept around the country. Their green twist of using bicycles is what
helps Pedal to Properties stand out in the homogenous, blazer-clad real
estate sector, but Majors says it's more the company's overall quality.

"When I bought into the company, I realized we had to be more mainstream
to be successful," he says. Majors helped recruit some of the
highest-earning agents in the Boulder area and persuaded Terabitz, a
market leader in real estate software, to help Pedal to Properties
develop a next-generation real estate platform that uses social media.
That has helped Pedal to Properties become not only a greener
alternative, but also a company with strong fundamentals. It has
launched locations in Northampton, Mass., and Sonoma, Calif., with more
on the way.

And the bike tours, which are optional, aren't just a green gimmick.
Majors says they offer buyers a real advantage. "Biking slows down the
buying process and gives clients a feeling for the community. They get
to see what it's like to bike to local schools or churches. It's a great
differentiation from other real estate firms."

But the company is cautious about calling itself "green," even though
it's made strides in becoming paperless by handling massive real estate
documents electronically and have pushed the idea to others in the
industry.

"I would never say we're absolutely 100 percent green," Majors says.
"But we understand the responsibility of a green company, and we're very
environmentally conscious."

That's another distinction between old-school green marketing and
today's generation of green salespeople–a willingness to reveal exactly
what the practices are and a willingness to admit strengths and
weaknesses to customers. That's the basis of "radical transparency," a
practice in which a company allows consumers to examine its
manufacturing processes, warts and all. The outdoor gear and clothing
company Patagonia, for example, created a mini site called The Footprint
Chronicles in which consumers can track individual products and their
carbon footprints from their raw materials to their delivery to store
shelves.

"Making a change like that is like turning a gigantic ship–it doesn't
happen fast," Makower says. "No company is or likely will be perfect.
There's no such thing as a sustainable company yet in the truest sense
of the word. We have to accept our green status as imperfect or be
paralyzed by imperfection."

In many respects, green transparency is being forced on the corporate
world. Sustainability stats are likely to become as common as food
nutrition labels when Wal-Mart implements its sustainability index
during the next few years. The index will assess the environmental
effect of all of the 100,000 products Wal-Mart sells, from Coca-Cola to
Black & Decker. That's the type of large, mainstream change that can
drive other companies to improve their green bona fides.

Government is getting involved, too. After almost 15 years without a
revision, the Federal Trade Commission is
updating its guidelines for green claims, creating verifiable
definitions for buzzwords such as "sustainable" and "biodegradeable."
It's begun calling out greenwashers, too. Last year, the FTC fined four
companies for selling bamboo-derived rayon clothing as 100 percent pure
bamboo and hit Kmart for improperly marketing paper plates as
biodegradable. More states are implementing strict laws to cut down on
greenwashing, meaning that green marketing

needs to focus on honesty and
transparency.

Easy access to information, understandable definitions and a crackdown 
on greenwashing are essential if green marketing is to overcome its weak
link: consumers.

In an Eco Pulse survey conducted this spring by The Shelton Group, a
Tennessee-based marketing firm that tries to mainstream green products,
64 percent of participants said they were interested in buying green,
especially low-cost, low-risk items such as cleaning products and
recycled paper products. But, in practice, green products haven't caught
fire; according to the survey, only
about 20 percent of respondents said they are "consistently green in
their behaviors or purchases." Part of that is because consumers are
confused about which companies are truly green. In a 2009 BBMG Conscious
Consumer Report, survey participants rated Wal-Mart both the greenest
and least green company. All of those green "seals of approval," green
bottles and eco-sounding product names make it difficult for consumers
to determine which products are the real deal. So, they often simply cut
green out of their decision making.

"Twenty-five percent of our respondents said they had no idea how to
decide if a product is green," says Lee Ann Head, Shelton's vice
president of research. "The vast majority of people still make their
decision based on reading labels–but at the same time they don't trust
the labels. There's still a sense of buyer beware with green products."

And because consumers don't understand exactly what green means, they
often conclude that the green product won't perform as well.

In the service industry, selling yourself as green can be an expensive
endeavor, especially if there is no guaranteed payoff. That's why Joey
Terrell went it alone when he decided to refresh his Joliet, Ill.,
Denny's by building a LEED-certified restaurant in 2009. (LEED stands
for Leadership in Energy and Environmental Design, an
independent certification program run by the U.S. Green Building
Council.)

Denny's gave him permission to build the green restaurant as long as it
cost about the same as a regular store, he says. The project turned into
a marketing boon itself as Terrell's Denny's raced a nearby McDonald's
to become the first green-certified restaurant in the country.

When it was all said and done, Terrell says, he came in $40,000 under
budget and is saving about $20,000 a year in energy and water
conservation. Plus, he's benefiting from a marketing boost. "We're
seeing double-digit sales increases over last year. It's a surprise for
us, we weren't anticipating that. People generally come into the
restaurant and tell us it's because it's green," says Terrell, who is
planning to turn his Mokena, Ill., Denny's green, too.

"People tell us they love eating in the restaurant but can't pinpoint
why," he says. "Maybe it's because the air is fresh with reduced
contaminants, and the skylights make it feel like you're eating in a
meadow."

In many ways, green marketing has transcended marketing. To market
itself as green, a company has to do the often difficult work of
actually being green, not simply flashing pictures of windmills.

But unlike the first generation of green marketing, which imploded when
the expensive products failed to live up to customer expectations, today
the momentum is so strong, and the benefits often so compelling, that
companies aren't likely to abandon their green efforts. In fact, much of
the most successful environmental advances have happened under the
radar as companies have squeezed waste and inefficiency from their
manufacturing processes and reduced packaging. For instance, the
aluminum can is a third lighter than it was 20 years ago, a remarkable
green achievement that doesn't show up in Budweiser advertisements.

Green marketing eventually will fade away, and if innovation continues
at the current pace, that will be sooner rather than later. Not because
green marketing is ineffective but because green is becoming the status
quo. When all cleaning products are nontoxic, when every appliance is an
energy sipper, when all toaster ovens are 100 percent recyclable, green
will cease to be a factor. Until then, marketers need to plug their
green achievements without making that their only notable selling point.

"Green is no longer a trend, it's inextricably linked to how companies
do business,
design, use and dispose of products," Makower says. "In 10 years, you
won't be able to sell a car without electric assist. Green will be part
of the fabric. It's those other differentiators, like cost and
performance, that will still be important."

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