I started this blog, Frank’s Forum, and one of its “super themes” is green products and environmental or “green” issues. I decided to draw upon my own personal experience with marketing “green” products as a good starting point for future posts on this subject.
The challenges to marketing green products in the current stagnant economic climate are multi-faceted and can be difficult to overcome. This article will focus on the most common challenges to the “green” product movement, and I will offer some advice on how to handle some of these situations.
The first, and most important, challenge you will face either as a distributor of a line of green products or as a company that is solely committed to development and sales of green products is: price.
The price of your green product is critical to your success in penetrating the market regardless of what the product does or what industry it serves. The issue with pricing of green products is that they are usually more expensive than the standard “non-green friendly” products available to do the same function. In a recessionary or largely stagnant economic time, such as the one we have been trapped in for the past few years, price is a huge consideration.
Now, in my experience in the green products field, I have learned that the price can be driven by several factors. My experience with a green products sales and marketing company taught me the value of a good distribution agreement. In this case, the product performed really well, better than the standard products used to solve the same issues. However, the company I was working with had a distribution agreement with unfavorable pricing. The feedback we would receive from customers on the performance of the product would be very good. The big concern for the customer, especially a municipal government client, was the price of our product would wreck their budget for chemical purchases for the rest of the year!
Furthermore, for those involved currently in green products distribution you may or may not be aware of this, there are ways to deal with objections based on price. The most obvious solution is to cut your MSRP to the customer and take a lower profit margin on the product. Another way around this obstacle to a potential sale is to see if your supplier would provide your company with a better price based on a volumetric commitment for sales to a specific end user.
I was involved with a company as a consultant, and they were able to go another route entirely: they found a supplier of a comparable product (the efficacy was a little weaker than their original product) and they were able to forge a better distribution deal with more favorable pricing. When the sales of the product hit a certain threshold ,they were able to then move up a tier in the distribution system with the manufacturer of the product and get even more favorable distribution terms.
The next challenge with selling green products in the current recessionary climate is: evidence and testing data. Any green product is going to be viewed with a certain degree of skepticism. The “microscope” will be even more intrusive by whoever the end user is because it is usually a more expensive product or method.
The value of any product testimonial data that you have, or that you as the distributor could get from the manufacturer of the product, you need to get it and utilize it in your marketing of the product. Any white papers or commissioned studies by an independent lab or other source need to be utilized as well.
In the event that you do not have a white paper or any other type of independent study done on the performance of the product: you need to get at least one done. If you are a small business that distributes green products, and you cannot afford to get one of these studies or papers or accreditations done on your own, then ask the manufacturer/supplier of the product to share the cost of getting the independent lab analysis or study done. You will find that usually they are quite willing to share in the cost because the manufacturer/supplier could use the data to promote the product as well.
In sales and marketing, it is very valuable to be able to have someone else verify that your product works effectively. It is also valuable to be able to offer free samples of the product or product lines that you are promoting with a green benefit to the end user. They will be much more willing to try the product if they can get a free sample to do their own testing and evaluation. So, you will need a budget to be able to purchase samples from your supplier/manufacturer to provide on a complimentary basis to your customers.
The other challenge in green products marketing to be aware of is the versatility of the product versus the standard product which does not have an eco-friendly benefit.
If the standard product or industry standard method has versatility and is easy to use, then your green product solution or method had better be versatile and easy to use as well. For example, if your green product can only work on land and cannot be used in water, and the standard product can be used anywhere; then you have a problem and a roadblock to selling the green product.
In the end, my hope is that green products will continue to grow and be more acceptable alternatives to the traditional ways we have always functioned. In my experience I have seen some great and innovative products with an environmentally friendly benefit come into the marketplace in recent years. It is important for the health of our eco-systems that harmful chemicals be removed from our standard business operations. I hope that this article will help all of the small businesses in the green products segment to overcome some of the challenges that exist in our current economic climate. I advise you to stay the course because your products can benefit future generations.