CleanTech WebLog

Many corporate purchases of cleantech products are made based on anticipated savings of some sort. But measuring the actual savings can be a challenge. So, I get excited when a cleantech product comes along that includes built-in results measurement. Ridespring is a great example.

Ridespring is a service that automates and promotes corporate commute trip reduction programs. Here’s how it works:

• Customized Website - Ridespring creates a customized commute website for your company. The site is hosted by Ridespring and accessible to all employees. It offers information about commute alternatives (i.e. commutes by means other than single-passenger car trips) and provides links to resources for planning commute alternatives (e.g. public transit, vanpool programs, etc.). The customized Ridespring website also offers employees a way to connect with other employees who want to carpool – either regularly or occasionally.
• Driver/Rider Matching Program - Employees register with the site and can offer rides to, or find rides with, other employees for carpooling purposes.
• Incentive Program - An incentive program is tied in to the service. Employees earn points for using alternative transportation and these points allow them to win prizes. Prizes are tailored to match the interests of the company’s particular employee population. Individual employees can also enter in their typical commute length, gas price paid and miles-per-gallon (MPG) in order to calculate gas savings.

Ridespring takes care of the website customization and hosting, incentive program administration and employee communication related to the trip reduction program. And the Ridespring service automatically tabulates statistics about trip reductions based on information provided by employees who log their trips in order to claim their incentive points. Individual employees log their commute data on a screen that looks like this:

Employees can even choose to receive an automated weekly reminder to enter their commuting statistics.

Employers are then able to obtain reports about employee participation, rides offered and car trips removed (example below).

Since employees are able to input their typical MPG and miles traveled, the system has the potential to calculate estimated reductions in gasoline usage and CO2 emissions.

Sure, it’s not a perfect reporting system, since employees could potentially lie about their commutes in order to get incentives. It’s the honor system. But since the prizes tend to be relatively inexpensive rewards, I would guess that most company cultures would “out” and “shame” the liars. The beauty of this reporting system is that it’s integrated into the service itself and the manual effort required to gather the data is spread among the employee participants. The input process is pretty painless and literally rewarding.

As a company offering clean technology products, you may have a great story about how your product is better for the environment than your competitors’ offerings. But, if your message does not resonate with your target market, it will fall on deaf ears.

How do you get your cleantech message across when environmental benefits are not of primary, secondary or even tertiary importance to your target – especially if you, personally, think they should be? Should you evangelize the environmental benefits with the hope of changing your customers’ value systems? Most for-profit companies would not undertake such a quixotic quest. This sort of values evangelism is even more doomed to failure when you are selling to a market segment where you already have a strong market position and an established track record and brand.

The Lexus hybrid marketing team takes an interesting approach to this dilemma. They acknowledge that their affluent customers do not want to sacrifice design, quality, performance or luxury when buying a hybrid vehicle. In an interview with CleanTech WebLog last week, Lexus marketing manager, Kimberley Gardiner, told us that her customers’ “luxury car needs must be met, first and foremost.” After that, the customers are willing to entertain other benefits such as lower emissions, higher gas mileage and fewer trips to the gas station. The Lexus hybrid tagline — “gives more to the driver, takes less from the world” — embodies this priority of perceived values.

Once Lexus customers are engaged in a dialogue about the environmental benefits of choosing a Lexus hybrid, they may begin to explore other aspects of what Lexus calls “Hybrid Living” or how they can “minimize their impact on the environment without sacrificing comfort and luxury.” This seems to build on the idea that when you buy a Lexus, you are buying more than a car. You are making a “lifestyle purchase.”

So, Lexus has created a lifestyle website, Lexus Hybrid Living that highlights “luxury ecodesign,” covering eight different product categories from architecture and art to travel, food and wine. Of course, transportation, featuring Lexus hybrid vehicles, is one of those categories. The site displays high production values, with luscious photos and video. It serves up the environmental message in a way that is informative, entertaining and palatable to the affluent Lexus target customer. In tone, it is quite consistent with the Lexus rewards program that is open to all Lexus owners – not just hybrid owners.

Perhaps the Hybrid Living website will change the behavior or impact the values of some of the Lexus hybrid vehicle owners. But those changes do not have to happen before the consumer purchases the product. Because Lexus knows its customers and understands their needs and wants, the company can speak to them in a way that will actually be received. The “values evangelism,” if you choose to call it that, is soft-peddled, not preachy, inviting, not strident. Over the long haul, it just may have a small, positive impact on the values of a group of consumers with significant purchasing power.

Lexus has found a way to tailor its cleantech messages to its target market by focusing on how environmental messages best fit into its customers’ needs and perspectives — a lesson to us all.

Now we really get into the “art vs science” —but don’t believe this for a minute.  Forecasting is one area where math applied does give you some real data to match against the revenue plan. 

First, put a scoring system in place so that every possible deal has an objective frame.  Match it to your sales cycle.  For example, when the first conversation is had with a potential customer, and it goes well, it’s natural to give this deal a lot of attention and a high “score”.  If you break down the things that need to happen before this opportunity actually becomes a sale, a more realistic picture emerges.   OK, the prospect is interested.  Good, let’s assign that interest level one point.  When they have seen a demo, or some other proof source, and they remain interested, let’s give them another point.  When they have indicated that they have budget that can be used for our product, another. And so on.   As positive “sell” indicators take place, points are assigned.  By the same token, points are lost if certain things happen.  As an example, let’s say your sponsor gets fired.  Or a competitor enters the scene where none existed, or an RFP is issued.   These things usually lower the score, and may change the momentum that this particular deal has.  

Ultimately, each opportunity has a numerical score that tells sales and management how strong the opportunity is, and there is a minimum score required to advance the deal onto the forecast and through the stages of the sales cycle.   This takes a lot of the guesswork (“art”) out of the process.   It’s not a lot of work; many SFA systems support it, but it’s also very easy to set up manually. 

And it means you can control how sales time is spent—on the opportunities that have the best chance of closing!

Greenwashing – touting ecological benefits while hiding environmentally damaging practices – is something cleantech companies must avoid. And since cleantech companies, by definition, must make claims about the “cleanliness” of their solutions, they are particularly vulnerable to accusations of greenwashing.

The fact is: if you are marketing and selling products that claim to be “green,” “organic,” “sustainable,” “energy-efficient,” etc., you will be held to a higher standard. Prospective customers are more sensitized to all aspects of what you are doing from packaging, to manufacturing and delivery processes, to what vehicles your service people drive, and even to whether you stock and serve bottled water at your office. They’re on the lookout for whether you are “walking the talk.”

Business consequences of making partially true claims or of claiming “virtue” in one area while hiding “vice” in another include:

• Getting “outed” by bloggers, activists or watchdog groups – leading to stagnant sales or even boycotts,
• Loss of credibility – resulting in customer skepticism about current and future claims of product benefits and elongating sales cycles,
• Damage to your brand or reputation,
• Derailing the conversation from the main benefits you’re selling and setting up additional obstacles to closing a sale,
• Possible regulatory action – in the U.S., the Federal Trade Commission (FTC) has the power to investigate advertising claims, force a company to halt a marketing campaign and/or fine a company for violating regulations. (The FTC has issued a “Green Guide” – FTC Part 260 – that governs environmental marketing claims and will begin to update it in January 2008.)
• More difficulty recruiting new talent – (see The Wall Street Journal article on How Going Green Draws Talent, Cuts Costs and my post of 11/27/07.)

So, how can you avoid being accused of greenwashing? First of all, be honest about your environmental claims. It’s not really possible to offer a solution that is completely “sustainable.” Some non-renewable resources will be used at some point. But you can avoid the “Six Sins of Greenwashing” described by Terrachoice Environmental Consulting, by making sure you:

• have considered the hidden tradeoffs when you make a claim (e.g., delivering solar energy solutions while polluting groundwater in a production process),
• have proof for your claims,
• are specific about your claims,
• make claims that are truly relevant to the product you are promoting,
• are not actively promoting what amounts to the lesser of two evils (perhaps exemplified by “organic cigarettes”).

Additional suggestions come from David Wigden’s thoughtful post on Defining Green Brand Leadership. He recommends, among other things, that companies be accountable, transparent and visionary in order to rise above the fray and take the ethical high road in their claims.

Cleantech companies do not want to be accused of greenwashing. Luckily, such accusations can be avoided by thoughtful, responsible marketing communications.

“How can we plan for revenue?—we don’t have a track record!”  What are best practices for revenue planning for a company that is just starting out, or bringing a new product to a market?    

It is challenging to predict how much you’ll sell, but it’s data that a company really needs in order to plan all the other expenditures.  Some companies that I have worked with use the “if we get one order this month, we’ll be set” model.   Others spend too much time and rigor on a complex revenue plan before really understanding their market.  Both of these philosophies are flawed, but understandable, because it is challenging to find a consistent method for new companies to plan what their revenue will be over time.  It’s also important to distinguish revenue planning from forecasting and pipeline management.  

The revenue plan should be the goal that a company is shooting for, and realistically believes it can achieve, if all the other pieces fall into place.    

The revenue plan should start with an honest assessment of what you have to sell, the selling price and how many are likely to be sold in a given period.   Then take into account these four factors: sales expenses, the time it will take to hire salespeople and make them productive, revenue recognition, and most importantly, the length of the sales cycle.  Sales cycle time becomes critically important for companies selling to municipalities or large entities like utilities, where evaluation and approval steps are lengthy indeed.  If all these factors are considered, any company will have the basis of a revenue plan, and the ability to tweak any of these dials to accommodate changes in the model.   

This is more art than science, as any sales professional will tell you, but the act of pulling these numbers into a excel spreadsheet creates a model and structure against which you can measure performance in real time.  It’s funny how actually looking at a projection on paper creates accountability and a realistic view of what must be done.   Next time: what about forecasting?