By Doug Hall
The eco movement offers a chance for every company to make more money. Consider that 85% of Americans would switch brands for environmental reasons, and 21% have donated money to save the environment, according to a 2007 Cone Environmental Survey of 1,066 Americans. Truth be told, I have only recently become an advocate for going green. My conversion is thanks to my daughter Kristyn, who worked at the Eureka! Ranch this summer as an intern. Kristyn is studying engineering at Smith College and has a passion for environmental causes. Kristyn and Jaci Gardner, another young person who works with us, have really influenced my thinking. Here are five ways I think any company can make money by going green.
1. REDUCE, REUSE, RECYCLE. In today's world, green gives you a reason to reduce costs in ways you never could before. If your product is typically sold with fancy packaging or a polished finish, go for rougher packaging or finish. Customers will respond favorably to changes if you make an overt statement about their positive environmental impact.
THINK: What can you reduce from your offering and still give your customers what they want? How can you reuse waste? Can you replace a component of your product with recycled content?
2. ATTRACT THOUGHT LEADERS. New customers fuel sales, and nothing is more powerful than a customer who is a thought leader. A study of 4,616 adults by AcuPOLL Research found those customers who are most concerned about green issues are also trendsetters. People with a passion for environmental causes are more often asked for their ideas and advice on current events, food, business, and politics. They also are willing to pay more for environmentally friendly products.
THINK: How can you change your offering to get the attention of green thought leaders?
3. SUPERSIZE. When it comes to increasing total sales, increasing the amount bought per purchase is 3.5 times more significant than increasing frequency of purchase. This came from a study I conducted of about 10,000 products. When customers purchase more, you make more money, and the bonus is that in the process you often reduce packaging, trim transportation costs, and save on warehouse space.
THINK: How can you encourage customers to buy more of your product at one time? What can be combined with your product/service?
4. GET AHEAD OF REGULATIONS. It doesn't take a crystal ball to see that regulations mandating environmental responsibility likely will increase. Energy and raw material costs will continue to go up. And people are becoming more vocal in their concerns about the environment. Getting ahead of potential threats, instead of reacting when they happen, gives you an overt advantage over your competition. Years ago battery companies were facing the potential of increased government regulation. I worked with Eveready (ENR ) to create a Green Power battery that contained no lead. It sold so well that it didn't matter that taking out lead had reduced power slightly. Other companies followed with similar products and the regulation was avoided.
THINK: What are the threats to your industry? If they happen tomorrow, what would you do to react? How can you take action today to get ahead of them?
5. CREATE DRAMATIC DIFFERENCES. Research that I conducted on some 4,000 new products found that those offering a dramatic difference have a 3.7 times greater chance of achieving sustained success. The green movement offers new opportunities to differentiate your product from those at your competitor.
THINK: Can you change your product so you can ship it unassembled, reducing its packaging? Can you transform your industry by using digital delivery, as Apple (AAPL ) transformed music delivery with its iTunes software?
Doug Hall is the author of the Jump Start Your Business Brain book series. He's also founder and CEO of the Eureka! Ranch.