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How Being Green Can Make You More Money

This month I will play the devil’s advocate, so please, no hate mail!  It’s time to spill the beans about what many business owners really think about the whole green thing.

So, hands up those of you who care about global warming. Well, most of you are liars (or at least you are hypocrites) – it’s as simple as that. Admit it, you still drive and fly - you love your car and you love your foreign holidays.

Where are your solar panels, your environmentally friendly cleaning products? You’d be the first to complain if your favourite restaurant gave you anything other than crisp white linen. All that you (and your liberal-minded colleagues) really do is just talk about global warming.

Behind closed doors, most owners and MDs admit that they simply pay lip service to the whole green thing – and who would stand up and shout that from the rooftops? Very few have the nerve to say they don’t think all things green are good.

Consumers are increasingly confused over what it means to be ‘green’ - is it about the environment, organic food or 'good-for-you' living? It could be about all or any of these things. It is easy to say your business is green, environmentally friendly, caring, blah blah, but consumers are skeptical.

Everywhere we look we see our suppliers and customers screaming their so-called green credentials at us. Everyone wants to jump on the green bandwagon – green is more than the new black, green is more like a fundamentalist religion – you dare not be seen to challenge the ideology. Well, maybe I am exaggerating to make a point.

What is not in doubt is that all of a sudden it is noisy in the whole green arena, and it is hard to break through. More important, running a greener business will give you bottom-line benefits.

The Bottom Line Benefits – how can you not want these?
Running a green business gives you:

• A more motivated, happier staff – they feel that they belong to something worthwhile; most people prefer to belong to a caring business
• A more committed group of customers – happier to be buying environmentally friendlier products and services; you create a better emotional bond
• Brand image benefits - you can create a new, friendlier, brand personality
• Improved sales – most people prefer to buy green if they can
• Lower overheads – saving energy means lower bills
• Tax savings - eg enhanced capital allowances, climate change agreements and company car legislation all act in your favour
• An improved bottom line.

Let me ask you some questions (with my answers in brackets):

• Do you know what being green really means for a business like yours? [Not really]. Does anyone else? [Not really.]
• Will having ‘green’ credentials improve your business? [Almost certainly but it depends on how you are defining ‘your business’.]
• Is the ‘green’ thing just a cynical marketing ploy to get customers on your side? [Often.] Isn't it all just ‘greenwashing’? [Often.]
• How can you square multinationals like Nestle's, BP and Shell claiming to be green when clearly many of their activities appear to run in the face of the ethos of the ‘green’ movement? [I can’t.]
• Can you afford not to be green? [No.]

How Can You Use the green agenda to your advantage?
Going green has tangible, bottom-line business benefits. But it is not as straightforward as simply getting a bit greener. There are a couple of things you really do need to reflect on.

Green Consumers – factors affecting their buying decisions
At its simplest, green consumers are not the same as ordinary consumers - often well-educated and young minded they are even more discerning and may pay for the better quality – but the product must be as good as, or better quality than, the standard; these people will only tolerate minimal inconvenience, will be cynical of the big companies, and will only buy products for the product’s attributes rather than just because it is green.

Greener Pricing/Product Opportunities
Green pricing is open for abuse – certain coffee shops have been taken to court for charging disproportionately high prices for so-called organic or fair trade products (charging extortionate mark-ups for ‘organic’ raw materials while inferring the increase in price was sent direct to the supplier).

But yes, you can charge reasonable premium prices for green products.

In some sense the whole green thing is just ‘more of the same' common sense about giving customers what they want.

But, people want to be green, all other things being equal; people want to do the right thing, so make it easy for them.  Political, economic, social, technological, legislative and environmental pressures have created a head of steam, like it or not.  In this world green equals better business.

about the author

Robert Craven is a keynote speaker and the author of business best-seller ‘Kick-Start Your Business’ and runs The Directors’ Centre. For further information, contact Robert Craven on 01225 851044, rc@directorscentre.com

Robert Craven©2010, Start Your Business Magazine

publication details

Published in Start Your Business, May 2010.