Episode 28: Marketing Sustainability with Soli Townsend (Futerra)

Businesses-Going-Green-Marketing-and-Sustainability-Image

You’re probably thinking, “Does something as awesome as sustainability even need to be marketed?” Turns out, half the fun of sustainability is spreading its positive impacts as far as possible. Hear from our expert guest Soli Townsend, co-founder of the sustainability strategy and change agency Futerra, about how she has helped major companies market their sustainability actions and products all around the world. She'll also tell us about her new book The Happy Hero in which she explains how we can feel good by doing good. Join us as we start the year off right talking marketing, sustainability, and positivity with Soli!

Learn how more businesses are going green here!

Episode Intro Notes

What We'll Cover

What is marketing?
Why is marketing important?
How is success measured for marketing campaigns?
How does one market sustainability?
Solitaire Townsend and her new book, The Happy Hero

What is Marketing?

Marketing is a process by which a product or service is introduced and promoted to potential customers (13). Marketing is more than just the commercials you see in between your favorite shows. It encompasses everything that’s needed to position a product to sell, from developing demand for a product to fostering customer loyalty (1). Edmund Jerome McCarthy, a marketing professor and thought leader in the late 20th century, famously broke it down into four P’s: product, place, price, promotion (2). Let’s break these down quickly:

1. Product

People aren’t going to buy something they don’t want or need (or at least think they don’t want or need). Therefore, goods or services should be designed with the customer in mind, and they should fill a niche or perform better than what’s already out there.

Example: Compost Cab. We featured this company in Episode 9 on Composting. It has a very clear product –– a home pick-up service that makes composting easy. It’s a service that fills the gap that exists because DC doesn’t currently collect compost in its regular pick-ups; there are consumers out there that want to compost but want a convenient service to do the hard work for them.

2. Place

Companies have to determine how a product will be distributed. Will it be sold in a storefront, online? Will a company sell direct to consumers, or go through a middleman?

Ex: Native deodorant. This is an aluminum-free, paraben-free, non-toxic deodorant that is only sold direct-to-consumers, as opposed to selling to something like a local grocery store first (11). This allows Native to control its messaging and to have a higher profit margin since there is no middleman (why is there never a middlewoman?)

3. Price

All products are set with a price above their cost to create a profit margin. How high above the cost varies. Sometimes the price is set quite higher to create a sense of luxury or high quality. Sometimes the price is set low to engage more customers, get them in the store, or to get them started with one product that will lead to them buying other associated products.

Example: Riide electric bikes, who we profiled on our very first episode. At first they only sold bikes for the whole cost. Customers weren’t purchasing at this very high price. Then they realized many people purchase their transportation with monthly payments so they launched the Riide Pass where a customer pays for the total cost with $79 monthly payments. Customer conversions went way up. On their website, they also show in a nice table how other forms of transportation have a higher monthly cost.

4. Promotion

You have to decide which forms of media to use to get the word out about a product. In the Mad Men era, it was more about newspaper ads and TV ads. Now the focus is increasingly on targeted online ads.

Example: According to CNBC, the cost of mobile display ads has increased by 12% over the past few years while the cost of desktop display ads have dropped by 17% (15). This highlights how advertisers are tailoring their promotion techniques as consumer preferences shift over to mobile platforms.

Why is Marketing Important?

Marketing is important for a number of reasons. Here are our 4 favorites (16):

Helps develop an ideal customer profile to better understand the end user
Helps discover what kind of messaging actually resonates with your customers
Helps build a powerful brand that your customers will prefer over others
Helps build trust with your consumers

Here’s an example that shows how important marketing is in the real world: the story of everybody’s favorite College-Event free pizza, Domino’s. The company started in 1960 and by 1985, was the fastest growing pizza company in the US. Soon after the company went public in 2004, its sales started to decline and then in 2009, a youtube video came out showing a domino’s employee putting cheese up his nose and also adding snot to a sandwich (14). This was a low-point for the company, for obvious reasons. Since 2008, despite this negative publicity, its share price has increased 60-fold.

What led to this major turnaround? A major investment in technology helped, but so did an innovative marketing campaign whose unorthodox thrust was to admit the core product was subpar. The ads featured bad reviews from customers such as “the crust tastes like cardboard” and “boring artificial imitation of what crust can be.” With this marketing campaign, Domino’s realized that their customers responded to this kind of transparent messaging; it reinvigorated its brand, and it rebuilt trust with its customers. The ads appeared in late December 2009 and by February, Domino’s was selling so much pizza that it was three days away from running out of pepperoni (God forbid).

How is Success Measured for Marketing Campaigns?

Companies spend an average of 11% of their budgets on marketing activities (3). That’s a lot! So how do companies know they’re getting their money’s worth? Well, the impact is difficult to prove, but the field of marketing analytics is here to help.

There are a number of metrics that marketers use to quantitatively evaluate their campaigns. Here are some of the most often cited metrics (17):

Return on Investment (ROI): Measures the sales revenue a campaign brings on every dollar spent. For example, if Scott spent $1,000 on a campaign that generated $5,000 in sales, Scott's ROI is $4,000 or 400%.
Cost per Win: Measures the expense of each sale. Let's say that Scott’s campaign resulted in five sales. With a $1,000 budget, that is $200 per sale.
Cost per Lead: Measures the cost-effectiveness of marketing campaigns. This metric focuses entirely on the leads generated by the campaign. Using the example from above, let's say the five sales resulted from 10 leads. With the same $1,000 budget, that is a cost of $100 per lead.

How do You Market Sustainability?

Futerra, a creative agency that our guest Soli Townsend co-founded, described one approach to marketing sustainability in its fantastic paper called “Sell the Sizzle” (8). This of course is a reference to the famous sales line, “Don’t sell the sausage, sell the sizzle.” The “sizzle” refers not to the thing itself, but to what gets people hungry and excited for the thing. Futerra argues that the climate change movement has not successfully sold the sizzle. Images of global sea level rise, hunger, and displacement make the future look hellish, and hell don’t make people want to join the sustainability movement. Instead, Futerra believes we should focus on the opposite –– a low-carbon heaven –– to help people envision a better, desirable future, and motivate them to make choices actions that send them in the right direction.

Another way that companies target these sustainability-minded consumers is by certifying their products as sustainable. Numerous third party certifications and buzzwords like “natural,” “organic,” “sustainable,” etc make it tough to know which are legitimate. This touches on a concept known as “greenwashing”, where a company, government or other group promotes green-based environmental initiatives or images but actually operates in a way that is damaging to the environment. This can deceive customers about the environmental benefits of a product through misleading advertising and unsubstantiated claims (18).

To help combat unsubstantiated claims, the Federal Trade Commission has published its “Green Guides” for marketing, which are designed to help marketers avoid making environmental claims that mislead consumers (19). For example, the Guides caution marketers not to make broad, unqualified claims that a product is “environmentally friendly” (22). Also, because of Scott’s lawyerly sensibilities, we must mention that the Green Guides are not agency rules or regulations and are only guidance on what the FTC may or may not find deceptive under Section 5 of the FTC Act (22). Long story short –– take every green claim you see with a healthy dose of skepticism and make sure you’re not being duped into purchasing a product that’s actually not all that sustainable.

When considering how to market sustainability, you should always consider which consumers you’re targeting. One marketing segment that was identified early on is “Lifestyles of Health and Sustainability,” or LOHAS, consumers. These are consumers who have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions (21). A recent and international study from Unilever found that 21 percent of those surveyed said they would actively choose brands if they made their sustainability credentials clearer on their packaging and in their marketing. This represents a potential untapped opportunity of around a trillion dollars (23).

Still, others may be turned off by green marketing and will be more amenable to first being told about quality and price (24). For example, the cleaning products company Method, a B Corporation, is all about transparency in its ingredients and being safe for humans and pets (24). However, its marketing campaigns simply focus on being effective at fighting dirt –– in 2012, one of its more successful marketing campaigns was called “Clean Happy,” which is a viral video campaign that shows in a fun way (think Flight of the Conchords meets Willy Wonka) how good its products are at cleaning (25). There is no mention of its sustainability credentials.

Soli Townsend

Soli has been trying to make the world a better place for nearly 30 years. As co-founder of the ‘change agency’ Futerra, she advises governments, charities and big brands like Danone and Nike on ways to solve social and environmental problems. Soli was named ‘Ethical Entrepreneur of the Year’ in 2008 and more recently was Chair of the UK Green Energy Scheme, a member of the United Nations Sustainable Lifestyles Taskforce, and a London Leader for Sustainability. She has master’s degrees in both Shakespeare and Sustainability, which more overlap than you’d think as you’ll soon hear from Soli.

Soli just published a book called The Happy Hero, in which she asserts that we can be happier and healthier simply by making a difference in the world around us with a formula she calls ‘positive+action’ (20). We’re inspired by the message and hope you will be too!

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