Pricing a green product competitively is the absolute foundation of The Secret Green Sauce for growing green revenues.
My environmentalist friends find this depressing. I am an economist. In life the price is always the first thing a customer looks at when they start to get serious about buying something, whether it is green or not.
Here’s the great news, market research documents that 85% of Americans will buy the more sustainable product or service vs. a less sustainable product or service IF THE PRICES ARE EQUAL.
The best practice for growing green revenues is to design a pricing strategy that aligns value with values.
What does that mean? So many green businesses begin with values. This is truly commendable. And a strong values proposition will be very attractive to an important group of consumers called the LOHAS consumer. They are typically affluent and values-driven in their buying so that paying more is not as big an issue in their procurement decision as it is for the other 80% of consumers.
The companies that are gaining year over year sales growth for their green products have figured out how to align value with their core values.
Examples of this type of pricing success is now emerging. It includes fast food restaurants, carpet cleaners and bedding suppliers. These successful companies have executed a costing plan that enables them to offer BOTH a green product and a price competitive product.
Too many consumers have too much stress right now to worry about saving the planet. However, consumers are searching for “in me, on me and around me” solutions. They will buy if they see a product or service that solves their problems, most especially green products and services with prices that are aligned with their budgets.
Bill Roth is the founder of Earth 2017 that focuses upon the emerging smart, healthy and green economy. His book, The Secret Green Sauce, profiles best practices of companies making money going green.