What Green Businesses Can Learn from Obama’s Campaign

Although President Barack Obama ran a successful campaign and won a decisive electoral-college victory, the margin in key battleground states was slight. Indeed, a shift of 407,000 votes across four of them — Colorado, Florida, Ohio, Virginia — would have given Mitt Romney the 69 electoral votes he needed for victory.

Big data has been touted as key to Obama’s victory — and securing winning margins in swing states — by enabling the campaign to focus scarce resources on voters who could be persuaded to vote for Obama and, once persuaded, were likely to actually vote.

Critical to this effort was the Obama campaign’s recognition that voters may be demographically similar while at the same time strikingly different when it came to the issues that they cared about. As Dan Wagner, the campaign‘s chief analytics officer, told The Los Angeles Times, “White suburban women? They’re not all the same. The Latino community is very diverse with very different interests. What the data permits you to do is figure out that diversity.”

For the Obama campaign, a key to victory was to precisely understand which issue would be most persuasive to a voter’s choice and then microtarget like-minded voters with messaging that relayed the President’s stance on the issue and his action plan to address the issue going forward.

Underpinning this effort by the campaign was market research to determine the precise issue that most effectively influenced voter decisions — and which voters cared about which issues. The campaign also targeted known supporters, asking them to reach out to Facebook friends in swing states in hopes of influencing their voting decisions.

Such microtargeting is not limited to campaigns. Companies can also use this approach to identify and shape green brand preferences, and ultimately, purchase decisions. Here is how:

Focus on consumer persuadability. Politicians are known for boasting to voters about what they have done while in office and expecting voter support in return. This is similar to how many brands tout their green accomplishments today: more recyclable, safer chemicals, reduced material content. But, as in politics, such accomplishments may not be relevant to consumers, green or otherwise. Nor are they necessarily factors that influence brand preference and choice.

In contrast, the Obama campaign had a laserlike focus on the issues most associated with influencing voter decisions. Brands can learn from such an approach. By determining not only what consumers care about but also prioritizing messaging to focus on those needs most associated with consumer preference and choice, brands can have greater impact for a given investment. In each case, market research is required to reveal what cares or needs have the most influence on preference and choice and for which audiences.

Method’s recent Clean Happy video campaign illustrates such an approach. The campaign targets household decision-makers and focuses on a broad range of consumer cares and needs and how Method’s products deliver on each.

For example, one video titled “Clean Like a Mom” promotes Method household cleaning products that contain safer chemicals than traditional cleaners. But, instead of focusing exclusively on product attributes, the video highlights how Method products address specific consumer cares, namely, kids’ safety and the desire by moms to be perceived by their peers as doing the right thing. Presumably, Method did market testing and found out that with moms, these issues motivated greater brand preference and choice than alternatives.

Interestingly, green marketers can effectively influence consumer behavior even if consumers do not consider themselves to be green. One dramatic example comes from a Yale University/George Mason survey that segmented Americans based on their attitudes toward climate change.

The survey revealed that two consumer segments — the one most alarmed by and the one most dismissive of climate change — were the most future-oriented in terms of their outlook. Such attitudinal similarities provide a potential opening for marketers to try a more future-focused message when selling greener products to these segments despite their polar opposite views on climate change.

Be true to your brand. Some politicians try to reinvent themselves in order to tell voters what they want to hear. Arguably, this is similar to a brand that wants to engage consumers on green issues but is not currently perceived in the market as being green.

Brands do not necessarily have to be known for being green in order to be relevant to consumers. Instead, brands should tell their story in a way that is true to their existing brand positioning.

Unilever’s Axe is a great example. Known as an irreverent brand that uses the sex appeal of its products to drive sales, Axe launched its “ Showerpooling” campaign to engage its customer base on the issue of water conservation. The platform uses showerpooling — sharing showers — not only as a way to grab attention, but to make it relevant with the audience. The campaign jokes: “It’s not just environmentally friendly … it’s all kind of friendly.”

Target microsegments. The Obama campaign identified microsegments through research and projected these against a database of registered voters in a nationwide effort to influence voter choice. Of course, marketers could develop their own database by encouraging consumers to sign up for ongoing communications from a company.

But, even without a database, marketers can certainly target microsegments online. This can be done by targeting green consumers on contextually relevant sites, retargeting those visitors elsewhere online or by partnering with a demand side platform to identify and target audiences with like-minded profiles regardless of where they go online.

Turn loyalists into influencers. The Obama campaign successfully tapped its supporters to motivate friends in swing states to vote. Similarly, advertising campaigns should activate loyal customers to serve as influencers and advocates for the brand. Method deployed a similar approach in its recent campaign by distributing fun videos through social sites such as YouTube and Facebook and providing incentives for viewers to share them.

The Obama campaign demonstrated the power of microtargeting to influence voters, and arguably, affected the outcome of the election through this technique. Obama’s success was bolstered by focusing on specific issues most influential with specific voters, rather than a more general message. Such a campaign provides many lessons for green marketers — as well as the opportunity to take a similar approach to drive adoption of green products.

Pinterest Emerging as Promising Platform for Green Marketers

Over the past 12 months, Pinterest has witnessed explosive growth. The site has topped 23 million unique visitors and average site visit time is nearly 100 minutes per month, making it one of the largest and most engaging social networks around. AdAge raves that “…Pinterest has gone from relative obscurity to exalted status alongside Facebook and Twitter…”

What is so compelling about Pinterest is its simplicity, empowering users to capture, curate and share content of interest at the click of a button. Moreover, its format allows users to easily browse and discover new content pinned by other users.

Brands, including green brands, are increasingly discovering the potential of Pinterest and finding ways to adapt this consumer-centric platform for their benefit.

Promote discovery. Consumers like to browse Pinterest and, while doing so, are discovering brands. Brands are maximizing their chance of being discovered by finding ways to distribute their content on Pinterest.

One way to accomplish this is for brands to directly curate their own Pinterest content. Additionally, brands can make truly compelling content available online. This could include visually powerful images on relevant and timely themes that the growing number of Pinterest users may find and pin onto their personal boards. Consumers can discover content on their own or be encouraged through contests like the one that Method deployed to incentivize Moms to pin images of Method products.

Strengthen brand identity. Companies are also finding ways to leverage Pinterest to help define their brands. They do so by using the Pinterest platform to distribute content that brings to life their brands — or core values.

Whole Foods, for example, says they are committed to “selling the highest quality natural and organic products available”. For Whole Foods, such a commitment originates in the garden where the food is grown and pays off through the appeal of the dish that is ultimately served and the healthier lifestyle to which the food contributes. Pinterest boards sponsored by Whole Foods bring each of these dimensions to life.

Highlight social responsibility. Pinterest can also enable brands to highlight its commitment to corporate social responsibility (CSR) in a very visible and compelling way. In addition to its other Pinterest initiatives, Whole Foods maintains a Pinterest board dedicated to the Whole Planet Foundation and its many initiatives sponsored around the world. Images map where contributions are made and illustrate the good works that are done in a format that seems, in many ways, less constrained or forced than the Corporate Social Responsibility tab on their corporate site.

Drive sales. Eco-friendly brands are also beginning to experiment with social networks to drive sales, and Pinterest is emerging as a key option. When looking at click-through rates to retail sites from the top three social networks — Facebook, Pinterest and Twitter — Facebook continues to drive the vast majority of traffic but Pinterest exceeds Twitter in terms of traffic generation. In fact, Pinterest is now responsible for more than 11 percent of user shopping sessions originating from the top social networks — Facebook, Twitter and Pinterest. Moreover, sales conversion rates for users originating from Pinterest are trending higher than from Twitter. At $169, the average order size of Pinterest users is substantially greater than for users that originate from either Facebook ($95) or Twitter ($71).

Brands like eBay are taking note, promoting eco-friendly products across a myriad of Pinterest boards, including health and beauty, fashion and electronics, and providing each product image with a direct link to a transaction page within the eBay Green site.

For green marketers, Pinterest provides a promising platform to engage consumers and for consumers to discover brands that they might not ordinarily interact with. Pinterest’s unique format provides the opportunity for companies to show their brands to consumers in a visually powerful way. Such interactions can provide dimension to a brand and can potentially drive sales. Green brands will be missing a key emerging opportunity online if they fail to consider their own Pinterest strategy.

Climate Change Turns Personal: Why Brands Must Adapt

Until recently, climate change remained an abstract concept to most Americans — something that may have long-term consequences for the planet, but moving too slowly be a significant concern in their daily lives.

Today, however, such sentiments may be beginning to change. As more and more Americans experience such events firsthand, they’re beginning to make the connection between climate change and its growing impact. Natural disasters and extreme weather events such as high winds and rain storms, floods, droughts and heat waves are happening more frequently — and with greater intensity.

There’s some evidence supporting Americans’ change in attitude: A recent survey conducted by Yale and George Mason universities indicates that the vast majority of Americans agrees that climate change is making natural disasters and extreme weather events worse.  More than a third of respondents reported that they personally experienced “harm” to their property, finances or physical or mental health from a natural disaster or extreme weather event in the past year alone.

Brands should take note: Climate change is becoming more relevant for Americans as its effects become more personal.  Crossing such a threshold is significant as it means that consumers will likely become more attuned to corporate activities that impact climate change – either positively or negatively. This, in turn, could significantly impact brand favorability, preference and purchase over time. Consumers may seek to reward brands that help reduce the impact of climate change, while penalizing those that do not.

Climate change is not going away. Many factors have emerged that will only serve to reinforce why climate change is personally relevant for Americans. Here’s how this is happening:

More Americans will experience climate change impact. Whether it be wildfires in the West, floods in the Midwest or Texas droughts, more Americans will be impacted firsthand as the probability of natural disasters and extreme weather events is only expected to increase with time  – and reinforce just how personal climate change’s effects really are.

Our quality of life is increasingly impacted. Natural disasters and extreme weather events are having a growing impact on the personal life of Americans.  While ‘harm’ is an extremely important measure of climate change impact, it does not capture the impact that extreme weather events have on the everyday lives of most Americans.

For example, a violent, fast-moving storm may prevent a mother from dropping off a child at practice. Snow storms in October mean that it is too dangerous for young children to play outside, with tree branches – still full of leaves – breaking off under the weight of the snow.  And heat soaring above 100 degrees can be hazardous to those with no means of cooling off.

Americans are sharing their stories. Users are taking advantage of social media platforms to document and share content regarding climate change and its impact on natural disasters and extreme weather events.  Pinterest, in particular, has emerged as a compelling visual platform to share images, infographics and stories about climate change and weather-related events.

Moreover, nonprofits are also facilitating users to share their stories.  Recently, for example, 350.org launched its global “Connect the Dots” campaign to motivate users to document and share images and stories about local climate change impact across the globe.

Americans are seeking out experts.  The Yale/George Mason survey indicated that 58 percent of Americans want to hear more from their TV weather forecaster about climate change.

Yet today, such trusted experts are largely silent on the issue. Sixty-nine percent of Americans indicate that their weather forecaster never or rarely ever (1-2 times over the past 12 months) mentions climate change.  This is consistent with an estimated 72-90 percent drop in climate change coverage across evening and Sunday news programs between 2009 and 2011.

In the absence of regular reporting, Americans are going elsewhere for information. For example, a recent CNN interview with Bill Nye the Science Guy making the connection between wildfires and climate change has nearly a half million views on YouTube.

As the effects of climate change hit home, consumers will become more attuned to corporate efforts addressing the matter. Over time, they’ll indicate brand preference as well. Companies should take this into account when considering future commitments to more sustainable actions.

Three Lessons for Fulfilling on a Green Brand Promise

When it comes to the environment, consumer behavior can be inconsistent or even a bit hypocritical.  Two-car families will buy a hybrid and a gas guzzling SUV.  Parents will teach their kids to turn off the water while brushing, but take a few extra minutes in the shower to enjoy the peace and quiet.  Somehow, we tend to overlook our own inconsistencies, while holding others accountable for their actions.

Perhaps, then, it should not be surprising that consumers tend to be less forgiving of a brand’s missteps than their own.  They are quick to assume green washing regardless of good intensions.

Why is it that consumers hold green brands to a higher standard than they do themselves?

It is not an easy question to answer.  Certainly, as human beings, we have a harder time taking stock of our own actions than another’s.  But, the distinction goes further.

First, consumers turn to brands as a form of self-expression based on who they are today, or who they ideally want to be.  For consumers to do so, brands need to clearly articulate what they believe in and be consistent in how they express these beliefs.  Arguably, this is especially important for green brands, as most mainstream consumers tend to be less familiar with them or how they benefit the environment.  As a result, consumers tend to rely more heavily on green brands for guidance when making purchase decisions.

Second, consumers expect green brands to deliver on promised reductions in environmental impact.  When they don’t, consumers feel disappointed that expectations are not met, or frustrated because, despite good intensions, they are not able to make a positive impact that they anticipated.

A recent personal example:

For the past year, I have turned to OZOcar, the eco-friendly car service, to help me reduce my eco-impact from business travel.  On one recent occasion, OZOcar ran out of cars and farmed my ride out to one of several livery companies in its network.  Instead of a Prius, the vehicle that arrived was a gas-guzzling Suburban.  An eco-friendly car service providing about the least eco-friendly ride.   In marketing terms, the Suburban was off brand.

While this was not part of my typical experience with OZOcar, it offered clear lessons for all brands:

Be clear about what a brand promise is and isn’t.  Brands should set clear expectations about their brand promise.  For example, it is not unreasonable for a small company like OZOcar to send a gas-powered substitute – preferably a sedan instead of an SUV – when its fleet is being fully used.  That said, brands should clearly set expectations upfront so that consumers know what to expect and are not free to interpret perceived (or actual) inconsistencies in their own way.

Fulfill on a brand promise, or modify the promise.  A customer service manager at OZOcar did offer to change my individual profile to state that I did not want to be picked up in an SUV.  I asked if they would consider changing their policy so that their network would not send SUVs to any OZOcar customers.  They said that they would look into it.

Know how consumers perceive a brand. What matters most is not what a brand says about itself, but how consumers perceive it.  As such, marketers should stay abreast of how consumers perceive their brand by soliciting feedback during customer interactions or monitoring (and perhaps joining) online conversations in social media.  This will enable a brand to quickly adjust its messaging – or its offering – to reinforce its brand promise.

Can Flash Mobs Engage Consumers on Green?

Recently, National Grid launched a surprise dance performance in a Saugus, MA mall as part of its ‘Tap into Savings’ campaign.  In many ways, this performance resembled a flash mob, with dancers appearing seemingly from nowhere to engage an unsuspecting crowd of shoppers, and then dispersing.

As a social phenomenon, the flash mob emerged in the early 00’s, enabled by Internet and mobile connectivity. While some flash mobs organize spontaneously, most are actually well-choreographed events that often captivate unsuspecting audiences where they occur.  One of the most viewed flash mobs was a choreographed rendition of “Do Re Mi” from The Sound of Music in Central Station Antwerp, Belgium.

While flash mobs are no longer the rage, marketers have periodically embraced the medium, as they consider it a tested way to engage new audiences and promote viral marketing.  Two corporate flash mobs are stand outs: First, in 2009, T-Mobile sponsored a flash mob in 2009 at Liverpool Station, London.

More recently, Wells Fargo sponsored a flash mob in New York City’s Times Square as part of their 2011 launch (rebranding of Wachovia) in the city.

Marketers in the green space have also embraced the flash mob, though primarily to make political statements rather than promote brands.  One such statement was made by students at the University of Catania in Sicily in its “The World Has Been Stripped Enough” flash mob for the 2011 World Environment Day.

Intriguingly, as green marketers and brands try to engage a more mainstream audience, it seems that there is broader role that flash mobs can play.  Specifically, flash mobs can:

Capture and hold attention.  Flash mobs capture consumer attention through the element of surprise, and hold it by being entertaining.

Green marketers can take advantage of this by turning the event into a teachable moment, especially when engaging audiences that might not ordinarily tune into an environmental message.  National Grid, for example, used its dance performance to teach shoppers about energy savings.

Reach fragmented audiences.  As channels have proliferated and audiences become more fragmented, marketers have had to respond by investing across more channels in order to be able to reach their intended audience.  In an ideal world, flexible creative assets can be produced all at once and then distributed across various channels.  Flash mobs offer a great example of a tactic that naturally aligns with this shift.

Take T-Mobile, for example.  While the flash mob captured the momentary attention of the surrounding crowds, it was also filmed for a TV spot that aired 36 hours later.  Video cuts were also distributed through channels like YouTube and viewed by millions more users.  This use of flexible assets enabled T-Mobile to get the most out of a single event.

Cultivate peer endorsements.  Marketers recognize that consumer endorsements can influence the behavior and beliefs of their peers.  Many marketers take advantage of this today by actively encouraging such endorsements as a key objective of the campaign.  Interestingly, flash mob dynamics may facilitate consumer endorsement more deliberately, or perhaps even enable a marketer to stage it.

A flash mob sponsored by TVA Canoe, an Internet TV site in Quebec, provides a great example of this. In this case, flash mob participants effectively reversed roles with unwitting bystanders.  To initiate the flash mob, a performer left an empty plastic bottle on the ground next to a recycling container in a well trafficked area of a mall. Shoppers filed pass the plastic bottle without much notice, while participants waited, blending in amongst the crowds.

Then, one woman, an unwitting bystander, picked up the bottle and put it into the recycling container. When she did, she was met with a standing ovation from the flash mob ‘audience’.

From a bystander’s view point, it looked as if fellow shoppers spontaneously broke into applause in response to an altruistic act by a peer.  Such overwhelming praise has the potential, in of itself, to be perceived by consumers as a peer endorsement, reinforcing the positive behavior in the minds of the consumer audience

Transform brand enthusiasts into participants. It is important for marketers to remember that green consumers tend to be passionate about not only what the brand stands for, but how much they can reduce their impact by choosing one product or brand over another.

Marketers should cultivate this sentiment by finding meaningful ways for enthusiasts to interact with the brand and share those experiences with others.  One way may be to invite enthusiasts to actually participate in a flash mob itself.  What better way to engage with the brand?  It certainly provides fodder for generating and sharing social content afterwards.

It has been a decade since flash mobs emerged as a social phenomenon.  Over that time, marketers have embraced the medium to drive engagement and encourage viral marketing.  Interestingly, green marketers challenged to engage mainstream audiences may find the flash mob especially useful in reaching target audiences and influencing behavior change.

Uncharted Waters: Reframing Climate Change Around Water

Einstein is credited with saying that “everything should be made as simple as possible, but no simpler.”

Such words have renewed meaning when it comes to messaging about climate change as everything about it seems complex – its cause, its impact, and the challenges that humans face to address it. Just describing climate change poses a formidable challenge for communicators. Its causes are many and not necessarily intuitive to grasp.  Likewise, its impact is difficult to comprehend, especially given how interconnected Earth’s natural systems are.

Like any marketing communications challenge, consumers needs sound bites that relay information as simply as possible, but no simpler. The message needs to be relevant to their daily lives. The narrative needs to be easily digestible and sharable so that it quickly becomes part of the broader lexicon. It also needs to instill a sense of urgency, but not leave a feeling of being overwhelmed.

One possible way to address this challenge is to reframe the climate change conversation around water. This shift is necessary for many reasons:

First, the current narrative around global warming is too complex and abstract for most audiences to grasp fully: rising temperatures, melting polar ice sheets, burning rainforests, rising sea levels, and so forth. Focusing on water enables communicators to simplify the message, as water is familiar to all of us and essential for our own survival. Rather than shortchanging the complexity of climate change, communicators that narrow the message enable consumers to more easily digest it.

Second, focusing on water allows us to shift communications away from the cause of climate change to its impact. Natural water variability is expected from year to year, but overall, supplies in the US, even in the arid west, have traditionally been relatively predictable from year to year. In the current world, a ”100-year” drought actually only occurs every 100 years.

Yet, climate change has already disrupted this paradigm. Today, we are shifting to a world of water volatility, where the probability of extreme droughts and floods increases dramatically. For example, in 2010, the Amazon rainforest experienced its second “100 year” drought in 5 years. When this happens, people start to pay attention.

Finally, water enables communicators to reposition global climate change as an inherently local issue. It has long been the case that consumers have had a difficult time connecting with – let alone financially supporting – global environmental issues. Redefining climate change as a local issue makes it more personal, and provides an opportunity to motivate more grassroots support for action at the local level.

Yet, today, the impact of climate change is being felt closer to home. Local communities in the US are being devastated by water – or the lack there of – from extreme droughts and wildfires across Texas to torrential rains and flooding in Vermont. Globally, the impact has arguably been more severe because people in places like Pakistan, Bangladesh and even China have fewer resources to cope with it.

To this end, it is important to outline a communications construct that shifts the focus of climate change to its impact on water. Here is one approach:As communicators, we face the ongoing challenge of constructing the right narrative that engages audiences on this important issue of our time.  Simply, but no simpler.

The best way to do so is still open for discussion.

What is your approach?

Green Product Paradox: When Too Much Good Is Bad for the Environment

A common mantra in green marketing is that if you want the masses to buy your product, focus your messaging on more traditional attributes such as price, quality or service.  A product’s “greenness” is likely secondary for many mainstream consumers. For green marketers then, the holy grail may be to offer a product that is competitive on dimensions both traditional and eco-friendly.  This would result in the greatest number of products sold and greatest impact on the environment.

But, things are not always that simple.  Consider the scenario when an innovative green product spurs new demand across an entire product category, rather than just replaces the existing generation of products in market. Is the individual product still green if the aggregate impact of the category is greater than what it replaced? 

Take, for example, household lighting.  Most of us are aware that switching from incandescent to fluorescent light bulbs can result in a dramatic reduction in energy use.  But, overall adoption has been relatively modest in comparison to the potential market, likely due to the premium price commanded for the bulbs. 

Today, an even newer generation of lighting technology is on the commercial horizon.  Solid state lighting, described as a “souped up” version of the light emitting diodes (LEDs) that are commonly used today to illuminate electronic displays on alarm clocks and audio equipment, promises to provide lighting at a fraction of the energy used by today’s bulbs.  (“Not Such a Bright Idea”, The Economist, August 26, 2010)  Mass adoption of such technology could have significant implications for the environment given that 6.5% of the world’s energy is used for illumination.

In many ways, we should celebrate such technology fixes given their benefits to the environment.  For marketers, solid state lighting clearly has the potential to be one of those “holy grail products”. Yet, green products such as solid state lighting also present a paradox in that their adoption in mass might actually be detrimental to the environment. How could this be the case?  Well, according to J Y Tsao and colleagues at the Sandia National Laboratory, cheaper lighting that sips energy will likely increase overall demand and uses for light, and with it, overall energy consumption.  (J Y Tsao, et. al., “Solid-State Lighting: An Energy-Economics Perspective”, Journal of Physics D: Applied Physics, August 19, 2010)

The rationale? Today, Tsao et. al., contends that consumers underconsume indoor light – with current fixtures providing 1/10th of the illumination as ambient outdoor light on cloudy days and 1/60th of ambient outdoor light on sunny ones.  Tsao rationalizes that there is plenty of room to consume more – including in new ways that have yet to be thought of.

As evidence, Tsao et. al., models historical lighting use and adoption rates for new technologies – from gas lanterns to fluorescent bulbs – and extrapolates forward demand based on the amount of light produced (measured in lumens) and cost per lumen.

Historic trends clearly indicate that consumer demand greatly increased when cost dropped and other attributes – such as faster turn on/off and greater cleanliness – expanded lighting uses.  Extrapolating into the future, Tsao et. al., predicts that with solid state lighting, demand has the potential to increase10x by 2030 and with it, perhaps a 2x increase in energy use.  How paradoxical. 

It is important to note that the green product paradox is not isolated to LED lighting.  Increased demand for electric cars, for example, could result in a similar dilemma if the added electricity load needed to power the vehicles is generated using higher polluting coal.

As such, the green product paradox presents quite the challenge for a marketer.  For individual companies, such products can be both profitable and (at least appear) socially responsible.   It is only by looking at the forest from the trees – and perhaps a little into the future – does it become apparent that, in aggregate, such products may, paradoxically, have a negative impact.

A sustainable brand might try itself to mitigate any impact that its products may have.  But, this will only have broad impact if it ultimately compels competitors to follow suit.  Given this, marketers should recognize that a solution to the paradox may not lie within an individual company’s grasp.  Alternatively, it may take an industry consortium to make the necessary product changes or evolve consumer expectations.  Or, it may take collaboration across industries to have lasting impact.  In both examples cited above, a shift to lower-polluting sources for energy generation would mitigate an increase in demand for both products.

Overall, the green product paradox presents a difficult challenge for green marketers.  Doing good for the planet may not always be as a simple as motivating purchase of greener goods.  In some cases, it just might be too much of a good thing.

Green Brand Leadership: a Fish Story

The customer is always right – so goes the mantra of every sales rep from time immemorial. But, as we know, what customers want may not be best for the planet. For some brands, this presents a dilemma: how do you satisfy consumer needs while remaining eco-responsible?

The dilemma can be quite daunting for a brand, especially if the eco-impact is caused by lifestyle choices consumers are long accustomed to. This challenge is only compounded when consumers are not yet aware that their very actions are having a detrimental effect – as no brand wants to be the bearer of bad news. Or, perhaps more challenging still, brands may find that the very behaviors and rituals that help define a brand itself turn out to perpetuate the very actions that are having a negative impact.

Whose responsibility is it to promote more sustainable consumer behaviors?

Many brands would say, it is the role of governments to regulate – and if they don’t, a corporate entity is not accountable for their failure to act. Others would say that it should be left to the discerning buyer. Should a brand itself take the lead? Some may argue yes. It is a demonstration of brand leadership, they say.

But, being out ahead of one’s customers may serve brands well only when their customers expect them to do so. Staking out a leadership position appeals to customers that want to know that they are doing good through the choices that they make.

Others may argue no. Brands sell products, not morality they might say. Worse, eco-responsible messaging may be antithetical to the experience a brand is trying to create. It is hard to enjoy pleasures guilt-free if one is constantly reminded of the impact that one is having on the planet.

But, regardless of where one nets out on this issue, one thing is clear: today, brands are increasingly left with little choice but to act – or react – whether or not their actions directly influence customer purchase decisions. Advocacy groups as well as individuals are leveraging the power of the media (and social media) to broadcast and amplify their voices to sway popular opinion.

Whether viewed as an opportunity to demonstrate leadership or take a defensive stance, it is likely that more and more brands will have to make such choices.

One example of such tension between brands and eco-decisions recently appeared in the New York Times Magazine article by Paul Greenberg, “Tuna’s End: The Fate of the Bluefin, the Oceans and Us.” (June 27, 2010), As Greenberg writes, Nobu, the internationally acclaimed sushi restaurant chain, faces a decision today over the selection of seafood that it serves.

The Atlantic Bluefin Tuna – a prized fish for sushi and sashimi – is now endangered. Continued commercial fishing may push it to extinction. Further, the timing of the BP oil spill in the Gulf likely exacerbated the situation by polluting one of two known breeding grounds in the Atlantic for these fish right as mating season was to begin.

Today, Greenpeace is pressuring Nobu – in large measure because it is a category leader – to no longer serve Bluefin to its patrons. Nobu has resisted. Nobu co-owner Richie Notar noted, “The Japanese have relied on tuna and other bounties of the sea as part of their culture and history for centuries. We are absolutely appreciative of your goals and efforts within your cause, but it goes far beyond just saying that we can just taken what all of a sudden has been declared an “endangered” species off the menu. It has to do with custom, heritage and behavior.”

Arguably, Nobu’s brand identity emanates from a careful balance of adherence to the tradition and ritual of sushi – its creation, its presentation, its consumption – and hip appeal: swanky ambiance, innovative food creations and celebrity ownership. Out of balance, the brand does not deliver on the experience consumers have come to expect.

With this balance in mind, Nobu has tried to stake out a middle ground by updating its menu with the following message: “Bluefin tuna is an environmentally threatened species. Please ask your server for an alternative”

Such a simple message informs patrons of the issue and then let’s each consumer make their own choice. Additionally, such phrasing invites a dialogue between the patron and server regarding food substitutes, though it is unclear as to how many patrons would be inclined to do so.

What Nobu has missed, however, is an opportunity to leverage this situation to evolve its brand appeal – keeping the balance between tradition and hip appeal while elevating each to the next level.

Nobu could find an alternative to Bluefin tuna and not jeopardize the brand, but arguably reinforce consumer perception of Nobu as hip and trendy. Greenberg asserts that what Nobu needs is a new substitute for tuna. As part of his research, he went searching for a Bluefin substitute and may have found one in a fish known as kahala. Arguably, Nobu is missing an opportunity to be one of the first to introduce kahala across its menus, reinforcing its trendy image.

Ironically, by introducing such a substitute, Nobu would not be breaking with tradition, but rather, returning to it, as Bluefin was not widely popular in sushi until just 30 years ago. It was nowhere to be found in sushi before 170 years ago.

Thus, shifting away from Bluefin and offering consumers a tasty substitute could actually enhance Nobu’s reputation for seeding new trends while maintaining close adherence to the tradition of sushi.

In this case, what is good for the brand may actually be good for the planet.

Driving Adoption of Renewable Energy: Part II – An Energy Marketer’s Perspective

Interview with Adam Capage, Director, Utility Partnerships, 3Degrees

 

With the #1 renewable energy program in the US, the City of Palo Alto Utilities (CPAU) must be doing something right.  In fact, despite a formidable price hurdle, CPAU has managed to sign up over 20% of Palo Alto residents for clean energy, and is not finished yet.

 

Notably, when CPAU decided to aggressively market renewable energy to its customers, it decided to reach beyond traditional utility circles to engage the right marketing partner.  For that, CPAU turned to 3Degrees to educate consumers and convert them to clean energy.

 

Recently, I had the opportunity to talk with Adam Capage, Director of Utility Partnerships at 3Degrees.  We spoke of the challenges that marketers face when trying to shift consumers to renewable energy, the approach that 3Degrees takes and reasons why it has been so successful.  Here are his words:

 

MG: How do you partner with utilities?

 

AC: Essentially, we partner with utilities by leveraging their brand and their customer connections [and combine it] with our knowledge of how to talk to people about why they’d want to support renewable energy. 

 

The Palo Alto partnership was [our] first utility partnership [formed] in 2003.  When we partnered with Palo Alto, they had already had a green program operating for three years and it had not yet reached 1% participation. 

 

In many ways Palo Alto had the ideal demographics for marketing this product.  And so it’s very tempting to just think “Well hey, its Palo Alto, of course they’re at 20%”.  But, the product did exist for three years [before involvement by 3Degrees] without hitting 1%.  So, it’s a combination.  Yes, demographics are key.  But, you do have to talk to [consumers] repeatedly and get the messages out there and that’s what we’ve been focusing on. 

 

Since 2003, the participation rate has basically sloped upward the whole time.  Today, we’re actually over 20% now and we haven’t seen any slowing.  We keep kind of wondering if and when it will slow, but it hasn’t. 

 

Traditional thought was that there was low hanging fruit [to acquire] and then it would get harder to acquire people over time.  Instead, it seems that you can create new low hanging fruit.  As you talk to people, you make [renewable] an accessible, appealing product to new groups.  Another possibility is just that Palo Alto has such a huge percentage of their population with [the] perfect demographics [for purchasing renewable energy] that you can get an incredibly high penetration rate.

 

MG: Do you tailor your message to particular subgroups within the city?

 

AC:  No.  The real challenge is that renewable energy requires people to pay a premium and they have absolutely nothing [tangible] to show for it.  People for a long time tried to compare this to organic food or bottled water or other premium product.  And, you just can’t do that because with bottled water people think they’re getting [a personal benefit like] cleaner water.  With organic food they might be stopping themselves from having pesticides.  [Unlike with renewable energy], it’s not just about the public good.

 

[Marketing clean energy] is like a request for people to make a private contribution to a public good.  And that’s just damn hard. 

 

I think that the best parallel is public radio and TV knowing that people understand that the programs are very likely to continue whether or not they pay up, but they do it anyway.  With renewable energy we need to put a line item on the bill that says you pay more.  It’s very hard to make people get connected to what they’ve done.  So we try but you know we can’t be in the home everyday like public radio or TV. 

 

We focus on a message that you can make a difference and there are specific environmental benefits to purchasing renewable energy.  We link [environmental benefits] to specific energy usage and [provide] examples of benefits that are local.  And then we repeatedly try to get that message out there.

 

MG: Do you focus your message on awareness or consideration for purchase?

 

AC: When we start each [partnership], it is like going back to 2003 in Palo Alto; you start from ground zero.  It’s a cluttered market and it’s hard to break through so awareness is definitely our first battle.  

 

With Palo Alto I think that awareness has come a very long way.  I don’t think they’ve done research recently, but I bet it’s pretty high  so now we’ve got messages that simply say “just do it”.

 

MG:  What is average price premium for renewable energy?

 

AC:  It varies quite a bit around the country based on the premium for clean energy, current electricity rates and the amount of energy that is consumed.

 

In California the average household uses something like 500 or 600 kilowatt hours a month, where as we have a partner, Amerin, that is based in St. Louis.  Its Missouri customers use on average 1,000 kilowatt hours a month.

 

The premium for Palo Alto [residents] that convert [to renewable energy] is going to be between $5 and $7 per month I think.  For our partnership in Amerin, it’s closer to $15 per month on average. 

 

MG:  Aren’t renewable energy prices independent of oil price shifts?

 

AC:  The programs aren’t designed that way.  A few [utility tariffs] in the country are actually designed where the renewable energy price is essentially substituted on people’s bills for their traditional fuel.  Those programs have seen great success.   Everyone understands why they’ve seen [success] as they have a whole new message to talk about: price stability because [the price of] renewables never change.

 

Most programs are designed where the renewable energy premium is on top of what they already pay.  So the thinking [by consumers] is renewable energy is more expensive.  You aren’t actually getting the electricity from [specific] wind turbines anyway.  What your dollars are doing is allowing the utility make more investments in putting renewable energy into the overall mix.

 

Hence the public good part: your electricity comes on just like everybody else’s except you pay more.

 

MG: Are you actually paying for 100% equivalent renewable energy?

 

AC:  Yes.  Not every program in the country is designed the same. But, our five partnerships are all 100% usage.

 

MG: What are the key customer insights for purchase of renewable energy?

 

AC:  A few people talk about new technology and want to support it.  A few people talk about fuel prices going through the roof and we are beholden to the Middle East, so they want to support another source. But the majority just says “I want to make a difference”.  It seems like one small step, one small opportunity for [consumers] to do that.

 

MG:  Can the success of Palo Alto be replicated across the country or is this an anomaly?

 

AC:  20% might be an anomaly but I know that, in general, these [renewable energy] programs are underperforming.  We have five like I said.  One of them just started and so it only has a couple tenths of a percent participation.  But all together our five average 7.8% participation.  The industry average is 1.8%.  You can do this better.

 

MG:  What’s the secret?

 

AC:  I think that the partnership model is a really good one.  The utility has the customer’s eyes and contacts and, in most cases, the customer’s trust.  That is certainly true in Palo Alto.

 

3Degrees brings the messaging and dedication to execution.  The single best thing we’ve found is that you collect information about what channels and messages are working well and you just execute again and again and again and again. 

 

That’s not what utilities do; they are not marketing organizations.  We do the marketing behind their brand and no one ever knows our name.  We want it that way.

 

MG:  Do you think that the social narrative has changed given Al Gore’s movie a few years ago and just the growing reality and awareness of global warming?  Has that context enabled you to move the needle further?

 

AC:  It definitely helps.  We were out in front of movie theaters when Al Gore’s movie was released.  We set up tables outside to intercept people came out of the movie.

 

MG:  When you target utility customers, what kind of marketing campaign do you implement?

 

AC:  The campaign is continuous.  Email, bill insert, direct mail, events.  We’re spending money and testing different channels all the time except TV.

 

Yard signs are also used to bring to peoples’ attention that their neighbors have done this.  We get requests [for signs] saying I want to show people that I did this.

 

MG: Were there other ways that you tapped viral marketing or activated influencers?

 

AC:  We did holiday card campaign where we sent all Palo Alto participants a card that they could send to their friends saying “I participated in Palo Alto Green and you can too”.

 

We offer wind tours where we let participants come and then, hopefully, tell other people about going to a wind farm and seeing what their money is supporting. 

Driving Adoption of Renewable Energy: Part I – A Utility’s Perspective

Interview with Tom Auzenne, Assistant Director, City of Palo Alto Utilities

 

Electrical power generation accounts for 40% of total annual greenhouse gas emissions (GHG) in the US.  Such a high concentration of GHGs is due to our reliance on highly polluting fossil fuels, especially domestic coal.  Yet, while the popular press focuses on the recent growth in renewable energy, it still provides only 2% of our total electrical needs today. 

 

Until recently, many arguments have been made for why adoption of clean energy remains slow.  Certainty, price ranks as the #1 barrier to broader adoption.  Other factors include reliability concerns and lack of education about the technologies.

 

Interestingly, Palo Alto, California has bucked this trend.  Over the course of several years, the municipal utility has partnered with 3Degrees, a utility marketing company, to encourage residents to sign up for its PaloAltoGreen program which provides 100% renewable energy from wind and solar power sources.  The results of this program have been astounding, with over 20% of all residents switching to clean energy.  Indeed, PaloAltoGreen is now ranked as the #1 green energy program nationwide based on participation.  

  

What does this mean for GHG reduction?  Well, it is quite simple: the purchase of 41.5M kWh of renewable energy translates into a reduction of 350,000 tons of carbon dioxide annually.

 

Recently, I had the opportunity to speak independently with both Tom Auzenne from the City of Palo Alto Utilities. We spoke about consumer interest in renewable energy, barriers for greater adoption by consumers and key reasons for this program’s success.  Here is what Tom Auzenne had to say:

MG: Who purchases renewable energy in Palo Alto?  What is the mix between residential, commercial and governmental entities?

 

TA: PaloAltoGreen (PAG) is the City of Palo Alto’s 100% renewable energy optional program open to all residential and commercial customers with an active electric service provide by the City of Palo Alto Utilities. The program has about 20% of the customers involved, with residential customers making up on average 95% of the mix and the commercial customers at 5%. Our residential sales account for roughly 60% of the program sales with commercial and governmental making up the rest. 

 

However, starting with July 2008, both the City of Palo Alto (CPA) and the Regional Water Quality Plant (RWQCP) are increasing their commitment to buy renewable energy equal to 30% of their total usage, a ten-fold leap from the previous 3% of total usage purchases.  This will increase the percentage of nonresidential customers in the program.

 

MG: Describe the demographics of your average residential customer that signs up for renewable energy?  How do they differ from the average utility customer in Palo Alto?  Across the US?

 

TA: As a general rule, the residential PAG customer is well educated, in a high income household and is environmentally progressive.  Most are thinking about their environmental impact and want to do something about it.

 

One of the primary differences from other green pricing program around the country is that PAG customers generally use less energy per month than our average customer.  PAG customers use 400-600 kilowatt hours (kWh) per month compared to the national average of about 888 kWh (according to the DOE).  This indicates that our customers may also be trying to reduce their electricity usage through energy efficiency or other measures.

 

MG: What motivates residents of Palo Alto to switch to renewable energy (e.g., attitude toward the environment, concern for their kids, financial incentives, community empowerment, etc.)?  Are their attitudes substantially different than the rest of Americas?  If so, in what ways?

 

TA: There are many motivations leading to program participation. These include being role models for the next generation, “doing the right thing” for the environment, and buying renewables as a logical next step after energy efficiency.

 

CPAU strives to communicate the environmental benefits of renewable energy to Palo Altans in as many ways as possible. Combine this near constant communication with high community awareness of the issues surrounding climate change, and you have the combination that brought PAG such success.

 

  

We also work closely with the Palo Alto Unified School District on energy and curriculum.  Many customers not participating in PAG have taken a more direct approach, and have installed their own photovoltaic (PV) systems rather than buy renewable energy from the market. Between January 2007 and March 2008, 92 PV systems were installed in Palo Alto, representing 250 kW of generation.

 

MG: What, if any, is the premium charged for purchasing renewable energy (vs. non-renewable) today?  What factors do you attribute to a customer’s willingness to pay such a premium (e.g., level of affluence, attitude regarding the environment, etc)?  Do you think renewable energy will be adopted by a majority of customers without eliminating the premium altogether?

 

TA: Residential and small commercial customers can enroll in PAG for 100% of their monthly electric usage at a premium of 1.5 cents/kWh. Large commercial and industrial customers can buy renewable energy in blocks of 1,000 kWh for $15 per block. This allows them to support renewable energy at a level that makes business sense.

 

One of the nice things about PAG is that the price doesn’t fluctuate. CPAU hasn’t changed the price for 100% renewable energy in five years and has no plans to do so. The demographics of Palo Alto are also great for marketing renewable energy, as our customers tend to be interested in the environment and can have a level of disposable income that allows a lower barrier to participation.  

 

MG: A 20% adoption rate for renewable energy is impressive.  Can this success be replicated across the country?  If so, what will it take to do so?  If not, what are the obstacles (e.g., low awareness, lack of urgency, difficult process to switch, price premium, etc.)?   

 

TA: With the continuous support of our local elected officials on the City Council, the staff of the City government, the employees of the Utilities Department, and, of course, our great customers, nearly everyone is behind this program. This type of support is vital to the success of a green pricing program in Palo Alto and elsewhere in the country.

 

Other factors that need to be in-place, or created, include customer awareness of the environment, a history of energy efficiency, an active partnership with the schools and students, and a willingness to lead.

 

It should be noted that not all the program participants have vast disposable incomes. Participants are both young and old, in the prime of their earning years or on fixed incomes, have children or are childless. All share, however, the same vision of, and desire for, a sustainable future.

 

MG: What are your primary marketing objectives in the residential and commercial markets?  Do you find the need to spend significant time building awareness of either the category or the technology?

 

TA: CPAU has found that targeted messaging, repetition, clear information about the product and a call to action (“closing the sale”) bring results. If the job is done correctly, then customers are aware.

 

For those customers that have more questions, we have many ways for them to find answers to any question that they might have.

 

MG: Is there any skepticism on the part of consumers regarding the (reduced) impact that renewable energy has on the environment? 

 

TA: There are always skeptics, but we focus on educating consumers on the positive aspects of the renewable energy we provide.  With the melting of the North Pole ice and the retreating of the Swiss glaciers, featured on the Evening News, skepticism has been reduced or eliminated.

 

MG: Please describe how you partner with 3Degrees in terms of your marketing efforts.  What are the core components of these marketing efforts?  What made them so successful?

 

TA: 3Degrees specializes in marketing renewable energy. They have partnerships with utilities in California and around the country. They are able draw on their experience and accumulated data to provide targeted marketing and program management support.

 

CPAU brings its knowledge, reputation and trust of the community to this partnership to help sharpen the marketing even more. With their experience and our community awareness, we have created one of the most effective, and successfully marketed, green power programs in the country.