A new Web series on how to beat the recession

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By Vicki Powers

If there’s one thing that we at Deliver® discovered in putting together this issue, it’s that we seem to have reached a tipping point when it comes to sustainable business practices. Clearly, green is here to stay. But, in the process of developing a more eco-friendly approach to business and marketing, what have we learned along the way? How far have we come from the roots of the eco movement? And where is it likely to head?

To explore those questions, we recently spoke with three green-business thought leaders: Jeff Renaud, director of marketing for GE’s ecomagination business; Paul Comey, vice president of environmental affairs for Green Mountain Coffee Roasters; and Andrew Winston, author of Green Recovery and co-author of Green to Gold.

Deliver: Why has green business become mainstream?

Winston: Green has become a central part of the business discussion for a lot of reasons. Companies are feeling pressure from a whole range of stakeholders, including customers, employees and vendors. Then there are tangible mega environmental pressures — such as climate change and water shortages — that are evolving no matter what the economic situation is. Combine all these forces, and there really is no choice anymore. But there are great proactive reasons to look at the business through a green lens. It saves money, reduces risk, drives innovation and new product development and builds brand value and loyalty. Finally, it’s a great way to survive this recession.

Comey: We’ve reached the point where you can’t continue to consume your environment and think that it’s going to be OK. Through the ’90s, people became aware that we were consuming resources at a horrendous rate. Even so, we don’t currently pursue new green business ideas as environmental projects so much as good operational practices. If we want to change the way we handle waste at our company, for example, I’ll pitch it as an idea that will reduce waste cost, reduce hauling cost — and, oh, by the way, it helps our environment. Looking at it from two different lenses gives you a much better perspective.

Deliver: How have the eco-business efforts at your company changed over time?

Renaud: I think the general environment has certainly changed over the last four years since we launched ecomagination in 2005. The debate centered more around whether we — the broader business community, not just GE — should really be focused on the “green space.” And, if so, could we deliver returns to our shareholders in the process? The consensus seems to be a resounding “yes.” If you look at our ecomagination product portfolio, we launched with 17 products, and today we have more than 80 products. Customer demand drives our growth in the ecomagination product line.

Comey: Early on, most of our green efforts were employee driven by a champion in the organization who had a passion. In the early ’90s, for example, a couple of engineering folks wanted to save money by developing a filtration system to replace the purchasing of liquid in small bulk tanks. We still have those champions sprinkled throughout the organization as our company has grown larger, but we also take a more systematic approach to it. This can involve processes like replacing lamp fixtures with more energy-efficient versions anytime we do renovations in acquired buildings. Our Knoxville, Tenn., location is getting ready to proceed with this. We have applied for Leadership in Energy and Environmental Design (LEED) certification for one of our recently remodeled buildings, and we’re currently looking for similar opportunities as we expand.

Deliver: Is the economy changing the way companies approach green business efforts?

Winston: Leading companies in green business are not slowing down. They’re still pursuing and, in some cases, accelerating their green efforts. Companies that consider putting their green efforts aside to wait out the economic downturn are making a big mistake. The smartest companies are recommitting to sustainability and using environmental thinking not only to stay profitable but also to drive innovation and help their customers. Green thinking can help companies get out of these challenges. Sustainability is at the very core of survival. Green is about doing more with less, which can save you money quickly.

Renaud: We are responding to the economy by continuing to invest in ecomagination. We believe you need to innovate even in a downturn to come out stronger. Our researchers are focusing on new technologies, such as new ways to maximize wind capture. Even in our current economic environment, the GE ecomagination initiative achieved $17 billion in 2008 revenues, which is a 21-percent year-over-year increase from 2007.

Comey: The downturn in the economy makes us look harder at what we do and justify our costs. There are green initiatives we do that cost money, such as removing the petroleum from our paper-cup liner and substituting it with polylactic acid. Our costs went up, but it wasn’t a cost we felt we should pass along to the consumer. We felt it was the right thing to do in an effort to get the industry to start looking at biopolymers and renewable resources as the correct way to go.

We also just installed a 100,000-watt solar array on top of our distribution building. We were able to put together a package — even in a down economy — that allowed us to spend $750,000 on a solar array and have it make good financial sense for the company. Typically solar has a 15-year payback, but, by looking for tax incentives and energy grants from the state and accelerated depreciation from the federal government, we were able to make it work.

As a company with a very successful consumer direct channel, it was important for us to look for ways to reduce the environmental effect of our catalogs, so we sought ways to offset their impact. As a first step, we just converted our catalog to paper from sustainable forests, which is a big move for us. And our printer is using ink from 27-percent renewable resources.

Deliver: Where do you see things headed in the future with eco business?

Comey: I’d like to see renewable resources in packaging make greater gains. To keep coffee fresh, you need to keep out oxygen, moisture and sunlight. Once you’ve made a package that keeps out those properties, you’ve basically designed a package that isn’t going to break down, isn’t recyclable and isn’t made from renewable resources. It’s a petroleum, metallic package. We’re all looking for packaging innovations that can protect our products from the elements and be environmentally friendly. That’s what I’m hoping to see in the future.

Winston: Green business is becoming the norm. In the future, we may not talk about green business per se, just business in general. Companies will need to operate in a way that recognizes environmental pressures and strives to reduce them. Those that make these changes will survive and thrive. Those that don’t will find their cost structures are too expensive to operate and will have trouble competing for talent.

Renaud: In the near term, we’re focused on continuing to execute the commitments we made in 2005, which are achieving certain revenue targets, R&D targets and performance targets. We’ve got a substantial ability to deliver environmental changes today, but there’s still a lot of opportunity out there. We recently announced that we’d be launching a venture to manufacture advanced batteries for the transportation market. GE certified its first few products that are focused on recycling heat from different processes and using it to generate steam or additional power. These are big markets and large opportunities that we’re focused on.

Environmental Efforts

GE created its ecomagination initiative in 2005 to help solve the world’s biggest environmental challenges through new products targeting industries such as commercial, electric utilities, government, residential and transport, to name a few. Through ecomagination, GE has developed more than 80 products ranging from solar, hybrid locomotives and compact fluorescent lighting to wind turbines, Energy Star appliances and aircraft engines. Jeff Renaud, director of marketing, spearheads efforts in ecomagination and is the lead for developing new products for the green building market.

Green Mountain Coffee Roasters was pushing organic and fairtrade coffee long before these coffee options were fashionable. Based in Waterbury, Vt., the company sells wholesale coffee as well as the single-cup brewing system by Keurig, which Green Mountain Coffee Roasters acquired in 2006. Long recognized as a leader in socially and environmentally sustainable business practices, Green Mountain Coffee Roasters continues to push the boundaries regarding green business initiatives while achieving double-digit revenue growth. Paul Comey, vice president, environmental affairs, guides the company’s green business efforts.

Environmental strategist Andrew Winston co-authored Green to Gold, a 2006 best-selling guide of what works and what doesn’t when companies go green. His latest book, Green Recovery: Get Lean, Get Smart and Emerge from the Downturn on Top, makes the case that companies that do not put their green efforts on hold during challenging economic times will survive and thrive.

To hear an interview with Jeff Renaud, go here.
To hear an interview with Paul Comey, go here.
To hear an interview with Andrew Winston, go here.

By Pamela Oldham

To survive the “Great Recession” of the past year and a half — and to out-perform competitors in the economic recovery to come — brands today have to better understand their audiences, says Warren Storey, of marketing services firm ICOM.

And Storey, the director of marketing, isn’t just talking about demographic data — but also about an intimate recognition of consumers’ communications needs and preferences. For instance, think e-mailing customers rather than sending a direct mail piece is helpful? Well, he points out, remember that consumers’ computer inboxes are likely overloaded, and your messages — and your brand —could wind up deleted if you add to the excess.

Co-author of a recently published ICOM study, “Marketer’s Survival Manual: Best Practices Guide to Marketing in Uncertain Economic Times,” Storey talked with Deliver about his research, the recession and the role of marketing in today’s landscape.

Q. How would you describe the current economic climate for marketers, especially those who rely on direct mail?

WARREN STOREY: Marketers are finding this climate pretty tough. In times like this, it’s important to understand whom we’re marketing to and what you want them to do. Customers or prospects will respond to offers that are timely, relevant and, most important, appropriate to their needs. Those are the keys to driving ROI in this or any other environment

Q: What indicators should marketers pay attention to when trying to understand the economy?

WARREN STOREY: We’re seeing a mixed picture. Jobs, house sales, car sales, stock market and retail sales — all of the retailers have just announced their earnings and many of those numbers are poor. Some of our research recently identified emerging trends that are affecting the economy and consumers, such as increased use and desire for coupons, reduced use of credit cards, and relying on trusted companies and brands when making purchases

Q: What do you see as the role of direct mail in light of the challenges marketers face today, and how is this role different than it was, say, 16 months ago?

WARREN STOREY: The great thing about direct mail is that it is highly measurable, and it’s been proven time and again to provide solid results if done well. With shrinking budgets, you’ve got to be sure that every dollar counts. There’s an opportunity now that didn’t exist 16 months ago — and it’s kind of counterintuitive. People are mailing a lot less. So, it’s actually easier to cut through mailbox clutter.

Q: Can you tell me about a recent mail campaign that illustrates how direct mail can be effectively used in this economy?

WARREN STOREY: During the 2008 holiday season, a client of ours used a direct mail program targeting households that used its products in three different categories. Using our database, they sent a direct mail package that included samples and/or coupons to about a million households. The redemption rate far exceeded expectations. On average, 2.5 coupons were redeemed by each household.

Q: What advantages does direct mail offer marketers in this economy that e-mail can’t?

WARREN STOREY: For us, it is not really about the choice between e-mail and direct mail; it is which — or which combination of them — is appropriate for your target audience. With mail, consumers can go home, open the mail, put it down, and maybe read it after dinner. They can refer back to the mailer days, weeks and months later when they need it.

With e-mail, you delete it, forget where you put it. Some consumers actually told us they already get too much e-mail. It’s hard to sort through e-mail and find out what’s of value and what’s not. The other benefit about direct mail that we heard from our study was all-around security and sensitive information. There is implied security around a known medium, as opposed to e-mail.

Q: Are there reasons why investment marketing is especially important during an economic recession?

WARREN STOREY: Research confirms that those who maintain or increase their marketing spend during a recession on average have higher sales growth during the immediate three years coming out of a recession.

If you don’t invest in the consumers who are loyal to your brand and driving a lot of volume, they’ll leave you. Then, when the economy turns around and marketing spend increases, it’s so much harder to win them back.

SIDEBAR

Five Tips on How to Market Amid the Slump

Warren Storey, director of marketing at ICOM and co-author of the “Marketer’s Survival Manual,” offers these five tips for getting through the recession:

Capitalize on changes in shopper behavior to drive promotional strategies. Storey says marketers should evaluate how the recession is impacting the behavior of their customers and use that intelligence to promote brand and product messaging that’s relevant to them and their behaviors. “If saving money on food is important [to your customers], make that easier,” he explains.

CPG marketers should join forces with retailers. “Understand where your customers are shopping and work to drive specific promotions that are win-win for both,” advises Storey, who adds that this strategy is another way to stretch marketing dollars and improve sales at retail.

Count on coupons in a recession. Over the five years preceding the recession, coupon usage had actually been on the decline. But now, Storey says, 67 percent of consumers are looking to coupons as a critical way to economize, and the vast majority of them are planning to use more coupons this year than last. “[When] times get tight, dollars and cents matter to more people,” Storey explains.

Really take the time up front to analyze and segment your audience. “Not all customers are created equally. Segmentation is key to driving better response rates and overall ROI,” Storey says. He adds that segmentation is also crucial to ensuring that marketers send the right message and the right incentive to the right customer at the right time. “Doing this all up front is 100-percent critical to getting this right,” he adds.

Use your data to remind customers how much they like you. “When you’re in a recession, you want to place extra focus on your most valuable customers,” says Storey. Talking with customers in a relevant way and keeping them loyal can’t be done unless you evaluate and understand behavioral data.

For even more on surviving the downturn, listen to our audio interview with Warren Storey.

John Nordberg, who oversees creative services for B-to-B marketing for the telecom giant, explains how his company is luring past customers into the fold again with an aggressive mail win-back program.

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Dell executive John Klemets and Merkle Inc. analytics expert Nancy Gifford explain how the computer maker uses marketing to enhance consumers’ shopping experiences and to cross-sell and upsell in a tough business climate.

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Jeff Meyer, senior vice president and sales, explains how the company behind many live family entertainment shows updates traditional direct mail strategies to keep the turnstiles moving at its kid-oriented performances.

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Dan Sackrowitz, vice president of marketing and business development, explains how the clothing maker mixes media to get the most out of its marketing budget at a time when consumers are tightening their belts.

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CMO Council executives Donovan Neale-May and Liz Miller warn brands against making hasty program cuts and offer ways for marketers to identify potentially lucrative new opportunities.

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Liz Miller and Donovan Neale-May of the CMO Council point out trends and shifts that could give marketers an edge in down economic times.

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Direct mail may be a sales team’s best ally in a down economy. Bill Hix, vice president of sales and marketing for Cumberland Pharmaceuticals, and Jay Bolling, president of Roska Direct Advertising, explain why.

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Cumberland Pharmaceuticals executive Bill Hix joins Roska Direct president Jay Bolling to discuss direct mail’s ability to get the right message to the right consumer at a time when marketers can’t afford to miss any marks.

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Wild Dunes Resort marketing director Andressa Chapman and David Rawle, chairman of RawleMurdy Associates, tell why personalized marketing messages are more likely to prompt consumer purchases in tough times.

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Bank marketers Bill Jenkins and David Dougherty explain how using dimensional mail, follow-up letters and other pieces keep Countybank customers engaged — and calm — during economic uncertainty.

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Jim Garlow, director of marketing operations, tells how his company balances communications with loyal customers and new prospects in tough times.

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JCPenney executive vice president and CMO Mike Boylson explains why the retailer uses a wide array of mail pieces to appeal to targeted segments.

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Mike Boylson, CMO of JCPenney, tells how his company is using detailed insights about consumer needs and wants to shape messaging and boost marketing ROI.

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JCPenney chief marketing officer Mike Boylson explains how using direct mail allows his brand to slip past media filters to maintain in-depth and relevant communications with consumers.

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“Going” green is only the first step. L.L. Bean public affairs manager Carolyn Beem reveals how big brands can stay that way.

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The director of publishing operations for Consumers Union, which produces Consumer Reports magazine, Meta Brophy explains how going green helps brands boost creativity and focus.

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Angela Weidmann, catalog print production manager for eco-conscious retailer Patagonia, explains how marketers can enlist corporate allies in their push to go green.

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