Will a green marketing campaign, or a green product or service, really prompt customers to consume more, or pay more?

Going green is the rage. But is it really easy being green? In other words, can you go green and still grow the bottom line? Workers, executives and even shareholders love the thought of being environmentally friendly, but are they likely to support green initiatives when they grow the top line faster than the bottom line? The answer to these difficult questions lies – as it always does – with the consumer. Will a green marketing campaign, or a green product or service, really prompt them to consume more, or pay more?

The resounding answer is still, unfortunately, no. Nearly every academic study or research initiative shows that consumers are not willing to pay more to protect the environment. But it is still possible for companies to generate more green by going green.

One of the central theories of marketing is that a marketing campaign, or a product or service, which resonates on a personal level with consumers, generates more interest and translates to increased sales or revenue. Marketers are always seeking this outcome – movie stars that create the deepest emotional connection with audiences demand the highest salaries because that brings people into the theaters. The Michelin Man and the Pillsbury Doughboy are both cute, fluffy, white characters because talking tires and bread aren’t very appealing.

Marketers are trying to apply this same logic to “going green,” but unfortunately it hasn’t connected with consumers yet. For it to have a real impact, two things are required. First, the consumer must truly care more about the environment than their money, and again, studies show that most of us don’t care in a truly meaningful way. Second, the specific consumer touched by green marketing must be educated on how one product is better for the environment than another product.

Capturing the Customer
Despite the inability of most organizations or industries to create the dynamics necessary to turn consumers “green,” a green product or service, or even green marketing, can affect buyer behavior. If two products of equal utility, or value, and roughly equal price, reside side-by-side in front of the consumer, the average consumer will choose the more environmentally friendly product – if the consumer is aware of the distinction. That means that the role of marketing remains relatively unchanged.

However, good marketing must still inform consumers on the features and benefits of the product, and its value proposition, but in addition, it must or can now include the product’s added benefits to the environment. In a side-by-side comparison, a more environmentally friendly product can stand out against the competition and might just be enough to turn the consumer away from competing products. Since most consumers still buy based upon perceived value or emotional connection, green marketing must supplement a product’s traditional marketing; it cannot replace it.

Taking this approach with green marketing educates consumers on the added benefits of the product, but it still cannot prompt them to care more about the environment and therefore pay more. And this isn’t going to change any time soon. It is unlikely that any one company within an industry can change this dynamic enough to give them a competitive advantage. Therefore, until industries band together on a broader scale, or until the government adopts green legislature, organizations will still be forced to compete based upon value or perceived value, not environmental concerns. Going green will not create a competitive advantage for any organization.

Generating More Green
If the bottom line is still the bottom line, is there really any value in going green after all? Yes, there can be. The upside of going green lies in the ability to pull customers from one product to another. But, this cannot be confused with the inability of going green to increase the total size of the market – prompting a significant increase in total purchases by those who otherwise would not purchase, or enabling price increases. Therefore, an organization should only pursue going green if the initiative itself will result in growth to the bottom line – regardless of the intrinsic value the initiative has for the environment. This is not an ethical statement, but one based upon the current economics of the market.

In the 1990s, the music industry came together to move away from expensive packaging around CDs and overcame artists’ objections by claiming the excessive packaging around the small jewel case was unnecessary and harmful to the environment. The musicians’ response – that there wouldn’t be enough cover space on the jewel case to advertise their album – seemed entirely vain. The result was widespread support for the initiative and a reduction in the package size. This was no doubt good for the environment, but it also significantly reduced costs for ailing record labels and lowered the cost of inventory in retail spaces. This allowed retailers to increase their inventory and carry a wider selection in stores. The initiative increased revenue and reduced overall costs for the record labels and succeeded as a result. It is unlikely consumers would have supported the initiative if the reduction in packaging had actually increased prices.

In just the last few years, Poland Spring became one of the first companies to release the new eco-friendly water bottle, which uses 30 percent less plastic than the traditionally shaped bottles. Although initially there were research and development and other change-over costs, 30 percent less plastic per bottle results in a significant cost savings to the organization. The green initiative improved the bottom line, and the environment was better off. Some consumers will switch over to this brand because of the green marketing that now accompanies the product. The marketing language educates them and it’s a win-win for the company and the environment (setting aside the overall negative impact of the bottled water industry on the environment).

Benefits as a Byproduct
The trick then lies in an organization’s ability to determine how its products and services can be improved in ways that benefit both its own bottom line and the environment. One without the other, and there is little chance the green initiative will succeed on any broad scale. While this may be unfortunate when compared to what could be done if people were willing to pay for a better environment, it is at least a step in the right direction.

As for the really important question of how can we make going green work on a large enough scale to actually affect some of the negative effects we are having on our planet, the jury is still out.

Broad-scale campaigns will increase education (the elusive ingredient), but proposed rebates and tax credits will not because they don’t affect buying habits at the time of purchase. Higher prices for non-green products will build awareness, but that’s unpopular and not likely to happen. Consider the paper that probably litters your desk. Did that many trees really need to die to create large, empty margins all the way around all that paper

David F. Giannetto is the director of the Enterprise Performance Management practice of Cohn Consulting Group, a division of J.H. Cohn LLP, and the co-author of “The Performance Power Grid, The Proven Method to Create and Sustain Superior Organizational Performance.” He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 908-797-9306.