Much of my career has been focused upon designing and implementing strategies.
Here six strategy elements that are being used by successful green businesses and entrepreneurs to grow revenues even in this recession:
1. Clear articulation of pricing advantage
2. Solve a customer’s specific “burning platform”
3. Knows where “first base” is located and how to get there
4. Manage your cash
5. Be inclusive of all the stakeholders.
One of my biggest strategy design successes was in developing a pricing strategy for a major corporation that was losing market share to competitors. Today this pricing system (and its legacy systems) bills $2 billion annually. This strategy had all of the secret sauce. By being inclusive of all stakeholders we developed a clear understanding on the barriers to implementation. Our pricing system’s design and “sales pitch” was tailored to eliminating the reasons for saying ”no.”
The pricing system obviously was designed to create pricing advantage but the key was building an implementation path that enabled a customer to harvest their “burning platform” goal for reducing costs. It wasn’t enough to offer a lower price we had to also provide the information systems to allow the customer to see and capture the lower cost in their procurement process.
And we had strong market research on which individual customers were most likely to be early adopters. We put 100% of our marketing efforts into signing up these customers, gaining their testimonials and then using this “first base” to educate other customers on how this pricing system could help them lower their costs.
Developing a Sustainable Strategy built upon the above key elements will enable success in growing green revenues. I have so many friends within my green entrepreneur networks who are good people with a strong desire to make a difference but their green business start-up is languishing. A key reason is that they started their business focused upon vision rather than strategies for gaining price competitiveness, stakeholder engagement and most especially, a solution for their customer’s burning platform.
Green retailers provide a case in point. These good people have invested a lot of money and time into building well thought out retail and web-based stores that offer products that they can document will provide a superior green result. But their vision did not encompass their competitor’s ability to competitively respond. And their vision did not define the environmental “burning platform” from the customer’s perspective. The fact is that the big box retailers have huge competitive pricing advantages from their large economies of scale, branding credibility and their retail locations (physical and on the web) that satisfy the need for convenience among today’s stress-out consumers. And many of these retailers are now going green.
The best example of success is Clorox Green Works. Green Works is a home cleaning product. Many green retailers dismiss Green Works because it isn’t as “good” as other green products and because Clorox isn’t green enough. But Green Works is the star of green retailing with $100 million of annual revenues sold at such big boxes as Walmart and Target.
The reasons Green Works gain consumer acceptance and significant revenue growth are telling:
1. Credibility. Customers, uncertain if a green cleaning product would “work,” felt more confident buying Green Works because it was produced by Clorox, a know-brand in household cleaning. And how insightful of Clorox gain the Sierra Club’s marketing participation to satisfy early-adopter concerns on whether a product from Clorox was in fact green.
2. Price, price, price! Clorox is world class at driving a product to a mass market price point. They have done this with Green Works. And for reasons that some of my green entrepreneur friends think are wrong, price competitiveness is absolutely critical to any product’s success, including green products.
3. Convenience. Clorox purposefully placed Green Works on the big box stores shelves. Market surveys document that a green product in a big box store has a high potential for an “impulse buy” by the store’s customer. And that is a huge “get to first base” feature of Clorox’s strategy for Green Works. They understood that most customers are not ready to totally re-engineer their lives to go green but they are ready to start. For many customers buying Green Works was their first effort at going green.
Based upon my most recent economic model the purchase of green goods and services will grow into a $10 trillion annual global market by 2017. This is a historic revenue growth opportunity for all businesses. The “getting to first base” step is to research, design and execute a sustainable business strategy. To read about more about how to build a sustainable strategy please visit the www.earth2017.com book store and buy “The Secret Green Sauce, Best Practices for Growing Green Revenues™.”