Tools for cleantech marketing

February 2009

In this climate of financial doom and gloom, one market is attracting record levels of investment. Clean technology, or ‘cleantech’, attracted over $8.4 billion of venture capital investment in 2008. That was its seventh consecutive year of growth, up some 38% on the previous year.

This investment frenzy, and the hype surrounding other sustainable industries, is reminiscent of the dotcom era, but unlike the ill-fated dotcoms, cleantech has strong business drivers. A lot of cleantech product development is focused on the largest market in the world: energy. And this market is set for fundamental change as a result of volatile fuel costs and pressure to reduce carbon emissions.

New green marketing concepts are emerging all the time, and we will consider these in future articles. In the meantime, let’s consider how some commonsense approaches to marketing can help you to formulate cleantech strategy and shape your green messages and communications...

Avoid ‘greenwashing’ at all costs

People are increasingly wary of companies that try to pass themselves off as being green without having much evidence to back it up. It can be disastrous for a company to have this so-called ‘greenwashing’ exposed, as Shell discovered last year when the Advertising Standards Authority found it guilty of misleading the public by describing one of its operations as ‘sustainable’.

When writing a brief for your marketing communications, we recommend you include evidence to back up the green claims that you are making. There are plenty of self-appointed green watchdogs out there – marketers should be careful about this.

Establish buyer motivation

Don’t assume that people will buy your product or service just because it’s green. When we interviewed one of our cleantech client’s customers to write a case study it became apparent that they valued the product because it is small, they could site it indoors instead of out, and it was ‘cool’ technology. The product’s clean credentials satisfied a secondary concern they had.

We recommend a short, sharp research project to properly establish what benefits your different target audiences will value. Once you know this, you have a solid basis for your messages. Your marketing is likely to fail if you keep emphasising your product’s green credentials while disregarding its more tangible benefits.

Check that the market is ready

Many cleantech markets are new, and it takes some analytical thinking to decide where, when and who to market to.

Geoffrey Moore’s chasm theory considers the problems that marketers face in developing the early adopter market into an early majority market. Moore’s thinking is just as applicable to green markets as technology markets, and offers lots of useful ideas to help decide what to do, and when.

Understand the hype

High-growth markets inevitably attract hype. Some pundits think that the next big thing is always ‘just around the corner’, and cleantech is especially vulnerable to this.

Research firm Gartner has described an approach to marketing called the ‘hype cycle’. Their model divides a market development curve into five sections that they identify as: technology triggers, peak of inflated expectations, trough of disillusionment, slope of enlightenment and plateau of productivity. It’s useful to think about where your product sits on the hype cycle, and craft your marketing communications to suit.

Research the competition

One of the many problems with dotcom industries was that there were few (if any) barriers to entry for many of the internet businesses. If you target a segment you need to understand whether you can lock your competition out, or differentiate in some way to ensure success.

It is worth reviewing Michael Porter’s five forces for your sector to figure out where your competitive threats lie. If you don’t have a good understanding of how your competitors position themselves, some desktop research can usually put that right. With this information to hand you will be in a better position to gauge how attractive your market sector really is.

While there are some interesting new models that can help you understand green marketing issues, you can inform many of your cleantech marketing decisions by applying some of the well-known marketing tools, all backed up with marketing research.

For more information on chasm theory, the hype cycle, Porter’s five forces, and other models and tools that help you with cleantech marketing, please contact us.

 

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