Closing The Green Gap
By Jamie Wimberly, CEO, EcoAlign
Article for Natural Gas & Electricity Monthly Journal

Electric utilities are facing a triple whammy of growing environmental risk due to coal-generated electricity, a shortage of power generation and the lines to get the power to customers, and rising costs that are driving rising prices. Regulators tell the utilities to promote energy conversation and efficiency. So they are, in a big way. Yet their program participation rates continue to languish. Customers ask: Why would a company which produces electricity tell me to use less of their product? What’s the catch?

Beyond petroleum. Gas-friendly to gas-free. Green is universal.

There is a growing green cap between companies and their customers in regard to climate change and environmental concerns, with companies treating those business risks as something to be managed by public relations and lobbying. In turn, consumers themselves are increasingly stating that environmental issues are important to them, that they are looking for ways to be more environmentally-conscious, but their actual purchasing behavior and lifestyle decisions dictate otherwise.

Government action is certainly needed to set the broad confines of how society is going to handle global warming and other environmental impacts, especially to monetize carbon emissions either through a tax or credit. EcoAlign, however, believes that closing the green gap in any meaningful, sustained manner is fundamentally a marketing challenge.

how will companies align their offering with a customer’s value proposition in such a way that drives changes to customer behavior?

There is an old marketing mantra: “If it is not communicated, then it is not valued.” Full-page ads run everyday in major newspapers trumpeting green and environmental messages, but most of the messaging is missing the mark in regard to hitting the customer’s fundamental understanding of the words being used and their acceptance of the concepts behind those words.

• Most consumers can’t articulate the difference between the phrases “energy conservation” and “energy efficiency,” while only 13% of respondents thinking energy efficiency has to do with saving money or cutting down on fuel costs
• Only about one third, 30%, of Americans understand the term “smart energy” and about the same amount, 32%, say they are not doing enough in terms of “smart energy”.
• One third of respondents do not know what “clean energy” signifies.

Not only does the messaging not resonate with many consumers, but it goes against over 100 years of accumulated behavior and attitudes around consumption. In our society, consumption oftentimes equals wealth and personal worth, yet protecting the environment is perceived to be about saving resources, and getting less for higher prices or taxes.

Let me pull out just one finding from our second EcoPinion survey to illustrate this point:

When asked to compare attributes of green technology, consumers who have not already adopted some form of green tech (solar, recycling, energy efficient light bulbs, etc.) tended toward the more negative value attribute for every comparison. These consumers perceive green technology to be ugly, expensive, and difficult to understand and maintain. The 46% of consumers who have adopted green tech were significantly more positive.

1. Fifty four percent (54%) of consumers could not name, on an unaided basis, a company who supplied renewable or “green” energy. GE and BP received the most mentions, especially among 18 to 34 year olds, but only represented 4 or 5% of respondents.
2. Seventy one percent (71%) of respondents were not familiar, on an aided basis, of 10 “pure play” companies in the renewable and green energy space even though the companies tested have been favorites of investors in the space and have received a fair amount of media attention. This indicates virtually no brand recognition. The finding also points to the fact that public relations or investor relations strategies does not substitute for a marketing strategy, especially for those companies in the retail space.
3. When asked about how committed respondents thought their electric utilities are to promoting or providing renewable energy or energy efficiency, ratings were about evenly split: 31% thought not at all committed, 36% were neutral and 33% rated the commitment level 7 or higher on a 10-point scale. The 55+ group rated the utilities significantly higher.
4. Of the utilities mentioned and that garnered at least 2 percent of the overall sample (thus, the bigger utilities), Pacific Gas and Electric was rated the highest by customers in their service territory for their efforts to promote or provide renewable energy or energy efficiency, followed by Florida Power & Light (FPL) and American Electric Power.
5. Respondents were then shown a mix of 12 companies representing various industries and asked which they thought were most committed to using or providing renewable energy. GE dominated, hands down, with 81% while Toyota was second at 65%. The finding for these companies could be attributed to effective, credible messaging and brand development that is resonating with customers, especially GE’s investment in EcoImagination. Utilities were given a neutral rating with little differentiation between the companies tested. Surprisingly, companies like Caterpillar fared poorly even though a growing proportion of their core business touches directly the energy and environment market.
6. Seventy seven percent (77%) of consumers think that an energy efficient or green operations is the single most important quality of a corporation trying to be an environmental leader. On the other hand, environmental marketing and advocacy efforts were not given much credit by customers. The finding is that customers want tangible evidence that corporations are doing everything they can to be more efficient and green in their operations and buildings before being considered as an environmental leader.

7. Respondents were asked to rate their familiarity with various terms. Seventy-one percent (71%) rated their level of familiarity 8-10 with the term “energy efficiency” versus only 53% for “going green.”

Companies that are looking to align their business objectives and offering with their environmental goals have to get much more serious about utilizing marketing. As the finding above indicates, there is a business opportunity to sell more products which deliver better performance or more of what customers want, and deliver significant environmental benefits.

1. The work actually starts internally. Environmental goals can’t just sit in annual reports, appointed committees, and the mind of the CEO. To be sustainable, a company’s employees enterprise-wide need to understand and accept those goals in order to become ambassadors to the market and society. If your line workers and call center employees don’t understand or accept the environmental goals set, you have already lost the campaign.
2. Before spending a lot of time on green product development or advocacy, spend the resources on becoming more efficient and environmentally sustainable on your own operations and facilities. By a large margin, consumers want to see tangible evidence that a company is doing everything it can to mitigate its own environmental impact and carbon footprint before being open to other green messages or offerings.

3. Spend the necessary money on market research. Market research is the skeleton of any successful marketing effort, and creating memorable, measurable campaigns that are grounded in core business, and customer expectations around the company’s brand and the value created.
4. Corporate communications, investor relations, and marketing departments need to be integrated in order to craft any messaging around environmental objectives to make it more believable and accepted by consumers and employees. Most “ads” with environmental messaging look and feel like public relations efforts.

Closing the green gap must be tied to value creation. From the company’s perspective, environmental strategy has to move beyond a defensive move to manage risk, and be viewed as a business opportunity to cut costs through efficiency gains and bring new products and services to market. From a consumer’s perspective, the offering needs to intersect with the consumer’s perceptions and attitudes toward value, on their terms and not simply by corporate or government fiat.

Jamie Wimberly is the CEO of EcoAlign, a strategic marketing agency focused on the energy and environment and an affiliate of the Distributed Energy Financial Group LLC. EcoAlign’s mission is to align consumer behavior with energy and environmental needs for products, services, and programs. For more information on EcoAlign or to obtain the EcoPinion survey reports at no charge, visit www.ecoalign.com