Note: The random numbers in the excerpts below are footnotes.
Foreword by Stephen M.R. Covey, bestselling author of The Speed of Trust
Its been my privilege to spend the last several years exploring issues of trust—in business and in life. Trust is a two-part equation. Its about other people having faith in both your character and in your competence.
In other words, for you to gain the benefit of others trust, they have to be convinced that youre a person (or business) grounded in integrity, someone who can be counted on to do the right thing—and also that youre someone who has enough skill to do the thing right.
Im convinced that the two halves of this trust equation are essential to business success. And thats why Im so delighted to lend my endorsement to this wonderful book.
Guerrilla Marketing Goes Green demonstrates over and over again the importance of doing the right thing, the right way, and succeeding as a result.
Since the ethics scandals of the early 2000s, many business schools have started to incorporate ethics into their curricula. But too often, theyre only looking at doing the right thing from the moral point of view. The moral piece is indeed important: thats the character part. Its good that business schools are now training people to develop impeccable character.
But the practical part, doing the thing right, is equally important. Yes, you want to build trust through your integrity—and you also want to build profits. Guerrilla Marketing Goes Green shows how to leverage both character and competence into profitable business ventures.
Part of the ethical code in todays world is the commitment to Green practices. Yes, you want your business to be as eco-friendly as possible. And you want to use that eco-friendliness to create swarms of eager customers, all but beating down your door for the privilege of doing business with you. You build their trust, and you reap the rewards: business is faster, easier, and accomplishes more when you follow these principles. Jay Conrad Levinson and Shel Horowitz explain exactly how to do this. The book is thoroughly grounded in both character and competence, and will give you the tools you need for business success in the 21st century.
Youll learn how to replace old-style intrusive marketing tools with creative and ethical strategies to engage not only your customers but other stakeholders, even your competitors…to convert Green initiatives from expenses into savings or even revenue streams…to create effective win-win partner relationships with charities whose missions align with yours…and most importantly, to be proud of who you see in the mirror.
Guerrilla Marketing Goes Green will instruct you, and also delight you. It will be such a relief to find proof that nice guys of either gender finish first, not last—that the values you hold dear are of value in the business world too—and that not only can you champion earth-centered eco-friendly business practices, but that you can profit handsomely by doing so.
Its an exciting journey, and Im thrilled to hold the gate open for you as you start down this Green and ethical road, with the Sherpa-like guidance and wisdom of Jay and Shel.
—Stephen M.R. Covey, CEO, CoveyLink Worldwide
From Chapter 4, Marketing Versus Adversarial Sales
When you get a customer, you want to keep that customer and build a sales relationship that can not only last for years but also create a stream of referral business. When you select and hire an employee, you want that person to stick around to repay the time and trouble you invest in the initial training, and harness the skills that the employee develops after a few years. When you select a supplier, you’d rather not have to go through the decision process and evaluate all the competitors again. And when you put time and energy into a joint venture, you’d like that cultivated relationship and hard work to result in long-term mutual success.
It is almost always much cheaper—and more profitable—to bring an existing customer back to purchase again than to prospect for and develop a new customer. Nortel cited a study showing that “a mere 5 percent increase in customer retention can translate to as much as a 75 percent increase in profitability.”1 Another source, the UK loyalty-marketing think tank TheWiseMarketer.com, claims that 5 percent more retention “only” doubles profits—but that “over only five years, a 70 percent customer retention rate loses 2 to 3 times as many customers as a 90 percent retention rate.”2 In a similar vein, ZD Net reported a Gartner Group finding that “it costs five times as much to find a new customer as it does to keep an old one. . . . [Gartner] estimates the cost of customer acquisition to be $280 a head, versus a mere $57 a head for customer retention.”3
If these dollar figures were accurate, if you’re selling something in the $100 range, you’d barely break even on purchases by your existing customers (subtracting not only the marketing cost but the actual production or wholesale cost of the item), and lose substantial amounts of money on every sale to a new customer. However, using more frugal strategies…you can slash the dollar costs substantially for both new-customer acquisition and retention. Other than paying performance-based commissions for referrals, Shel pays between $0 and $20 to acquire the rest of his clients. And since his primary customer-retention strategy is to deliver superior work at an affordable price and within a reasonable time, his cost to keep an existing client is essentially zero.
A broad-based study by Howard Seibel, for E-Metrics, showed new customer acquisition costs ranging from $8.66 for online travel discounter PriceLine all the way up to $700 for a mortgage origination.
Most of the study’s examples ranged between $14 and $300.5 At the extremes, Harry Tennant and Associates found that Amazon.com had dropped customer-acquisition cost to $7,6 while Ward’s Dealer Business (an auto-industry trade magazine) cites a new-customer acquisition cost for car dealers of $1,000.7
The dollar costs may be overstated in the Gartner study, but the ratio of costs for acquiring new versus retaining existing customers still holds.
And how do you retain existing customers? By providing a delightful, high-quality experience during the buying process, by offering goods and services that offer genuine value to the customer, and by exceeding your own promises and your customer’s expectations—not by making enemies of your customer during or after the sales process.
You also retain customers by listening to them. Ask regularly how you can serve them better (and change your company’s behavior to reflect the answers), and give them other ways to be heard. Scott Stratten, of Un-marketing.com, suggests asking this simple question:
I would like to know from you what I should stop doing, what I should start doing and what I should continue doing.8
Now we begin to see the true shortsightedness of the sales jerk approach.
When people buy in spite of your sales style and not because of it, there is virtually no chance for a long-term sales relationship.
You’ve gone for the quick hit, and it will come back to bite you. By failing to deliver a positive experience to your customers, you’ve pretty much ensured that they will go elsewhere, and they will tell their friends and colleagues to do the same.
From Chapter 13, Marketing Green
(This immediately follows a section called “Local as Green”)
Global As Green
The flip side of the buy-local movement is that in our increasingly globalized economy, enormous opportunities are opening for nimble companies who can make sharp turns in the global arena. Mark Schapiro, Editorial Director of the Center for Investigative Reporting and author of Exposed: The Toxic Chemistry of Everyday Products and What’s at Stake for American Power, noted in a radio interview on February 24, 2009, that because environmental and safety standards for cosmetics/personal care products are much tougher in the European Union than in the United States, U.S. companies that meet the stricter requirements have access to the entire EU market.
And U.S. consumers will discover the tougher labeling and ingredient standards and demand them for themselves. “There are levels of disclosure required on European products that are not required on American products. We live in a global economy. So that information is going to start making its way back here to the United States. And I think it’s going to start creating some interesting tensions when people start seeing information disclosed there that’s not disclosed here.”21
Extrapolating from that, it seems obvious to us that the first U.S. cosmetics company to start heavily marketing its own compliance with the European standards and what that means for consumer safety and environmental protection, could score a huge first-mover marketing coup even in the U.S. market, and cast doubt on the offerings of many of its competitors.
Other aspects of the global economy can also be harnessed to your benefit as you demonstrate your company’s ethics and principles. If you supply the vast majority of consumers who don’t want to give up nonlocal foods, educate them on the importance of dealing fairly with suppliers in developing countries, and offer fair-trade certified products they can feel good about, you’re well positioned for success.
Similarly, if you are selling organic clothing, craft items that benefit a women’s educational co-op, natural and renewable buildingmaterials, traditional toys that are guaranteed to be safe, or even recordings of indigenous music from around the world, and you can show that you’re giving back to the communities that supply you and those that purchase from you, consumers will be predisposed to support you.
Using The Right Language
All these examples show the importance of using the right language to get your Green message across. Futerra Sustainability Communications, a UK marketing agency specializing in Green approaches, studied the effectiveness of various terms in sustainability marketing.
The study found that language emphasizing empathy, personification, action, and intellect (e.g., smart, conscious, or savvy) was highly persuasive, as were phrases that focused on connectedness and the big picture (one planet living). Terms that ranked poorly included eco-safe and conflict.22
Language that positions the company with a friendly, human voice also works well. Consider Tom’s of Maine, a natural personal care products company (now owned by Colgate-Palmolive). Tom’s packaging always includes a friendly, down-home note from founders Tom and Kate Chappell. And the web site’s product page proclaims, “since 1981, we’ve proudly listed every ingredient, its purpose, and its source on our packages, so you know what you’re buying.”23 There’s also a prominent link to the ingredients Tom’s refuses to use, again with reasons why.
Green marketing expert Jacquelyn Ottman emphasizes the wisdom of this approach and its applicability to other companies. This level of transparency, she says,
Is unprecedented in the history of consumer goods! Can you do this with your product’s ingredients? How many of them may contain warning labels? (Crest and Colgate each do.) For Tom’s, listing the ingredients, such as natural spearmint oil, helps get consumers over any price barriers at the point of sale. They are choosing a brand with natural ingredients and recognize that it must come with a price.24
As an aside—the right language is important in any marketing campaign, not just the Green ones. To cite one of thousands of examples, social media strategist Chris Brogan attributes the iPod’s success to Apple not getting bogged down in megabytes, sampling rates, and so forth, but to position it as a player that holds 1,000 songs—cutting straight to the core benefit and bypassing all the technobabble.25