B-to-B : Green is Good

Implementing sustainable marketing practices is good for cost cutting, CRM and ROI

October 2008 By Mary N. Miller

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We all understand the sense of urgency to produce and the need to control costs while still meeting deadlines and sales targets. After all, that's business. However, green marketing is a concept that, when implemented effectively, can improve your customer relationships, image in the market and ability to reach the most targeted audience, while helping grow your bottom line.

Green Marketing Matters
While the concept of green marketing is simple in theory - reduce, reuse, recycle - it's critical to examine how to make it happen in a business environment, and that is not quite so clear.

The problem is, business marketers do not agree on exactly what it means to "go green." However, green businesses continue to evolve, and new companies are joining the trend. The green economy is estimated to be valued at more than $209 billion annually and is expected to reach $1 trillion by 2020, according to the LOHAS Journal, which researches and tracks green economic trends. Therefore, it is in the best interest of B-to-B marketers to get on the same page. Green marketing tactics range from using recycled materials for printing and packaging to paperless (online) advertising and marketing.

Yet, the most important issue to address from a purely green marketing perspective is payback. While green tactics can relieve some of it, the financial and economic pressures are still very real. If you implement green practices, which sometimes carry higher initial costs, will the return justify the investment? Or, will you spend more money just so you can say your company is green? There is skepticism among consumers that some companies promote green as nothing more than a sales tactic.

In B-to-B markets, the same perceptions exist, and business decision makers also may question their suppliers' motives. So as B-to-B marketers, we have to be able to prove our actions.

How Targeted Marketing Turns Green
The first, and perhaps most obvious, green marketing step is to use electronic means of communication whenever possible. And it means sending less - that's right, less - information to the marketplace. That's because when you effectively target your market, the response rates (in terms of Web site visits, leads generated and sales conversions) increase in overwhelming proportion to the focus with which you select and filter the target audience.

For example: Your company plans to launch a new product designed specifically for electrical equipment engineers, and your integrated marketing plan includes: direct mail; e-mail; print and online advertising; and custom event seminars, where the product will be demonstrated.

Given these marketing tactics, the first step in the green marketing process is to rent or purchase a list of electrical engineers that meets your target audience profile. Be as selective as possible (based on geography, industry, job function, purchasing power, etc.) to ensure that you have a precisely targeted list of prospects.

We'll assume that, based on these criteria, a list of 20,000 contacts with postal and e-mail addresses was generated. At typical e-mail list pricing, for all of the available names, the average cost is $10,000. Because CAN-SPAM requires that commercial e-mails are sent only by the source to which the individuals subscribed or opted in, your e-mail message will be transmitted by the list manager. Therefore, the message and call to action of your e-mail must compel readers to give you their e-mail addresses for future contact. Promote an educational or informational piece that requires respondents to provide their e-mail addresses in return, and begin to build your lead database.

Because the original list was so well-defined, we'll project a 5 percent response rate resulting in 1,000 e-mail addresses collected. Here's the next green step: Only send direct mail to the contacts whose profiles most closely match the 1,000 responders. So, instead of printing, producing and mailing to all 20,000 contacts, use e-mail first to attract the initial leads. Work with your list provider to analyze the responders and find more contacts like them. Then mail to a subset.

On top of this, you should advertise in controlled-circulation publications that serve the target market, inviting only the respondents to your advertising and marketing programs to attend your custom events. Think of the volume of print, production and postage costs you just saved. You're all but guaranteed to see higher response rates, as well.

Going Green Saves Green
Let's assess the costs of the described program, comparing the "green" method to the traditional approach of renting the available names for multichannel use and promoting your new product to the total available market (see chart on page 61).

Advertising and the custom event series now can be directed toward the people who meet the profile of the most responsive members of the initial audience. Add to that the cost savings of using online advertising versus print vehicles, which generally is 60 percent to 70 percent. Therefore, the complete green marketing program provides significant cost savings, as well as a greater return on the marketing investment.


Tips to Get Started
To begin a greener marketing program for your B-to-B campaigns, follow many of the same practices you already consider for direct marketing, but add a couple new twists:

• Start with a well-defined target market, based on your initiatives.
• Test your message and creative via e-mail to generate leads.
• Analyze the response rates, and profile the responders.
• Send postal direct mail and event invitations to the refined audience.
• Build awareness through controlled, industry-specific advertising.
• Track the effectiveness of each channel by cost and response.

Green marketing methods produce highly effective results. They apply all of the steps you need to cut costs, raise response rates and increase growth in the most important marketing metric we are all held accountable for—the bottom line.

Mary N. Miller is senior marketing manager at DM2 DecisionMaker, a B-to-B direct marketing service provider in Oak Brook, Ill. She can be reached at mary.miller@dm2lists.com.

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