The Value of Green Performance: Quantifying and Selling B2B Sustainability Q&A Part 1

by | Sep 5, 2024 | Quantify Customer Value

HomeBlogQuantify Customer ValueThe Value of Green Performance: Quantifying and Selling B2B Sustainability Q&A Part 1

For our August Webinar, Nick Nalepa, Director of New Ventures at Echobreakers, shared a monetization framework for sustainability within the value chain, as well as actionable strategies for B2B organizations to get paid for demonstrated excellence in this increasingly critical performance area. After the session, he answered questions from the webinar audience. In this blog, we share part one of his live answers.
 

Our company leans heavily on the “guarding the reputation” pain point in our sustainability messaging. Do you have any thoughts on how this can be quantified and turned into a performance point?

When talking about guarding reputation, you’re inherently making a pain point argument in thinking about the loss. The first thing to remember is that you’re helping the customer guard their reputation as well, so try to flip it into something that has both upside and downside. When you’re talking about the downside, that can often be hard to sell – “I’m going to keep you from losing some money by guarding your reputation.” A good example of this is Green Coke. It was attempted briefly and it went over with a thud. You can prevent disaster, but the problem is that unless the customer has experienced disaster, they often think they’re bulletproof.

You want to think on the other end of it. Going past the regulation aspect, Wwhat about doing these things that is inherently good? Let’s say there is a regulation for controlling plastic waste in our region. We’re going to meet it and therefore our reputation is going to be more green. Now, let’s go past that. Let’s maybe create a service that does more than that, such as helping you clean up existing things that aren’t necessarily your fault. We can then try to leverage that reputation and now, for example, we’re helping that one vehicle leverage your reputation by doing pickup and delivery while being able to access the green areas of the city, which would generate extra revenue.

That is the big deal. I would say if you’re thinking about guarding your reputation, how about enhancing it? Go from guarding to enhancing reputation, and then we should be able to figure out what does that does for us financially. Maybe at the end of the day it creates a switching cost because they don’t want to leave us. That might be harder to figure out, but creating a (internal) drill for how you value that is key because that becomes a form of revenue security.

What other marketing points can we leverage to sell our ROI? How do we get around ISO and Legal talking points to sell value?

If you’re a company looking at a return on environment, you’re going to want to do something visible. Otherwise, it’s going to be hard to get a return. By doing something visible, the customer gets interested in it and now our company can help them see the value in it and earn some revenue from it. Start with a low number when you’re talking to the other company. What typically happens with these things is that people will pay up.

If you can do something that boosts your reputation, the way to start valuing that is to pitch something that’s absurdly low that nobody would argue with, and then you can work it up from there. We humans are very bad at saying something is worth $10, but we’re very, very good at saying it might be worth more $10 or less than $10. Don’t be afraid about setting the first benchmark. It might be wrong, but you’re in an area that’s difficult to quantify. Just say, “we’re going to see a 5% boost by the end of the year if you use our product.” Is that ridiculous? More than 5% or less than 5%? And you’ll find if you start going through that, you’ll be able to zero in on a solid number.

Now be careful of greenwashing – this can’t be for image only, and if it is, I wouldn’t even bother with the project. It’s got to do something tangible. Putting a green label on a soda bottle and making sure you’re using the greenest parts of your existing supply chain is why Green Coke failed. They were already doing something and just relabeled it. So be careful in that regard, but if there is a tangible green impact, it’s going to benefit the community of people that use your product.

Then, start thinking of it in terms of how much more valuable your offering has just become and throw a number. Once there’s a number out there, the customer is very good at saying that it’s higher or lower. The problem is most of us are afraid to throw a number, so you’ve got to have an organization that has the freedom to throw the number. And make it low to start, because people will start going, “oh, it’s better than that,” which you can then say, “okay, well how much better?” You get a very useful conversation going that way.

In your experience, which members of the buying committee tend to respond best to performance point messaging? Is it helpful when navigating procurement?

It’s difficult to make a hard and fast rule, as it’s going to go industry by industry. I would answer it in terms of company size. I like to avoid the giant “vanity customers” we all have in our organizations – a big customer with reach, and one where our presence with them says “we’ve arrived.”

That’s our vanity customer. But they often tend to be discount junkies, so they’re not the customer to do this with, especially if they have an attitude of “you don’t make us, we make you.” We’re going to take them off the list. That’s easy to say in this webinar, but harder in the boardroom.

Instead, pick some folks that are trying to make the leap from small to medium or medium to large. They’re big enough that they’ve got staff. They may not have arrived yet, but they’re promising. They’re still in the partnership mode. They’ll still hear you, and even if they may give you grief, they’re going to be talking about you as you’re walking out saying, “how fast can we get them back?” Those are the folks that’ll be interested.

These accounts are certainly your alpha customers and the group from which you draw your beta customers. The big mistake I saw in the entrepreneurial groups that I worked with was they went for the vanity customers as their beta set and it killed them. I can’t think of anybody that succeeded. I would say medium to large customers in that zone. They’re making that transition.

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