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Green Marketing conference
London, June 2007

How does Oil (as in oil company downstream fuel retailing which has historically been very involved in customer loyalty schemes) mix with Water (which is predicted by some environmentalists to be in shorter supply and just as politically charged as 'big oil' in the decades ahead)?

In search of a possible answer we attended the Green Marketing conference in London to try to understand the implications of some very high profile environmental statements from major UK retailers in the last few months and the potential impacts on customer loyalty.

This was the inaugural conference on Green Marketing by the Centaur Conferences group and the first stop was to speak with Kaye Harrison, Centaur's Senior Conference Producer, to understand why 'green' and why now? She explained that Centaur are continually monitoring major marketing organisations' interest in conference topics and they had reached a critical mass in early 2007 that suggested sufficient demand would be evident if they staged an event.

It was interesting to note that the audience profile was heavily biased towards female delegates from middle- to senior management positions. It was also revealing to note that the only major retailers present were Marks & Spencer and Argos, which was surprising given the media attention that Tesco, Sainsbury, Asda and a host of other major UK Retailers have attracted with their Environmental statements in the last six months!

What was noticeable was the number of UK Banks and credit card companies present at this event: HSBC, Cooperative Bank, American Express, Halifax plc, Egg, Royal Bank of Scotland, MBNA. Clearly if the planet is going to saved from its own excesses of consumption the revolution is going to start with money lenders.

We had recently attended the Gartner Research conference that was also held in London to report for the Wise Marketer and this event was noticeably smaller in scale and impact by comparison. This was odd given the relative impacts potentially on the average consumer's lifestyle i.e. an increase in technical complexity versus a possible increase in global sea levels! It is maybe an accurate reflection of the work still required if climate change and environment issues are to penetrate the average corporate mindset.

Jonathan Shopley, the CEO of the Carbon Neutral Company (a leading carbon offset and climate consulting company), chaired the conference and his opening remarks set the scene for what followed.

"Change is real, caring for the environment makes good business sense." He made specific reference to internal employee loyalty and external customer loyalty as additional benefits from a focus on this area. A number of UK Banks have taken a high profile approach. The conference featured presentations from The Co-operative Financial Services (this was expected given their genuine and long-standing ethical positioning). Kelvin Collins, Head of Brand Management, stated: "Ethical consumerism is now a £30 billion spend market is very thinly spread." He also observed that "convenience is the key; environmentalism cannot be hard work for the consumer".

Big Oil was present in the guise of BP, up to make their case in defence of their impact on the planet by presenting on 'TargetNeutral' programme. This presentation had a refreshing honesty from Kerryn Schrank, Programme Director, on the internal battle she fought to get funding for the project. The frequent mantra amongst environmentalists is 'reduce, replace then offset' but this is a serious programme that seeks to engage with BP customers to raise environmental awareness and salve consciences as they fill the tanks of their 4x4s to take the kids on the school run.

Laurence Hunt, the CEO of the new 'business class only' lower cost airline Silverjet, made his case for committing his new airline to be carbon neutral and the acceptance of its customers of a mandatory surcharge on ticket pricing to cover the carbon footprint of their travel. Thomson TUI had Kimberly Kay, Corporate Responsibility Manager, outlining their internal projects on staff engagement in sustainable tourism: "the people of the travel industry can play a key role in informing, engaging and driving reduced impact on the environment in the future", she stated. Chris Clark, Head of Market Planning and Brand Strategy at HSBC Holdings plc, gave a very polished presentation entitled 'Reputation is not built on what we are going to do' and the challenge of engaging with consumers who want to understand what the answers to climate change look like and hear about solutions rather than being continually presented with the problem. Presentations from the WWF and various agencies involved in the business of green marketing made up the rest of the conference agenda.

The definite star performers of this conference for this writer had to be Matthew Anderson from BSkyB Ltd and Susan Aubrey-Cound from Marks & Spencer plc.

The presentation from BSkyB was a real personal surprise at the conference since they are not the type of organisation that I usually associate with concerns regarding their environmental footprint. To their credit they have taken a very pro-active stance and are genuinely seeking to try to influence their subscribers towards greater environmental awareness and modified behaviour. An example of how small things can make a big difference is the pack of three long life light bulbs that their engineers leave with a household after every call-out visit to fit set-top boxes or other services. A small step for one household but scaled up this may have more impact than all the grandiose plans being talked up at the UK Government's Department for the Environment.

The undoubted star of this conference for this writer however was the story behind the move by Marks & Spencer plc towards being carbon neutral in five years. They have taken initiatives back down their supply chains and are making efforts that are far removed from the 'greenwash' superficiality of some organisations. Their campaign 'Plan A, because there is no Plan B' at M&S is a 5 year, 100 point plan to extend an existing CSR focus into profitable business. She made the point that they have concluded that selling more and more for less and less is not a sustainable business model for the future. The challenge is to deliver change cost-effectively and respond to customers who are ready and willing to change but want "small and convenient steps", not huge efforts to change their existing lifestyle.

So, a reasonable conference, albeit one that had the feeling of being the start of a movement rather than reflecting a mass tidal wave of support from big business and being the urgent 'call to action' that scientists and some politicians are stating is required.

At this stage you may be wondering what has all this got to do with customer loyalty and customer insight? Well, quite a lot but for the wrong reasons. None of the organisations who presented at this conference are in the front line of large scale customer loyalty schemes. BP are an established partner in the Nectar coalition in the UK as are Thomson TUI but no linkage from their genuine external and internal environmental programmes seems to be reflecting in Nectar.

In fact, Annich McIntosh the Editor of Loyalty magazine based in the UK recently ran an editorial article stating: "I'm getting totally hacked off by the Green campaign. Don't get me wrong, I want to save the world as much as the next person. I have plenty of my own green credentials too, such as gardening organically, worrying every time I get on an aircraft and turning the heating down a notch. What is really making me steam is the growing band of totally un-green companies that have suddenly launched environmental campaigns that are totally unsupported by any solid intentions to alter their use of the world's resources. Take Nectar. It now suggests 'green ways to save points (with the word Green in green of course). Green points can be collected on Hertz car rentals stating that it is better for the environment when the customer hires a car from the Hertz Green Collection, it's better for the environment and won't cost you a penny more."

She points out however that this is the same choice of car models available from any other hire firm and the only difference is that use of these vehicles accrues 'green' incentive points. She goes on to cite several other 'green initiatives' from companies that lack real credentials and are adopting hypocritical and unprovable 'save the world' campaigns. As she concludes her observations, "I would not like the loyalty industry to be held partly responsible".

Her point is a valid one. Sorting the wheat from the chaff is going to become a difficult choice for consumers in the next few years and everyone involved in the consumer and B-2-B loyalty marketing industry will also need to decide where to take a position.

By way of an example, Barclaycard is one of eight British firms (including M&S and Sky mentioned above in this article) that have joined forces for a "we're in it together" green campaign. They are planning to launch a green credit card that will donate 50% of its profits to environmental projects dedicated to reducing carbon emissions around the world. This scheme looks a solid attempt at doing good by the environment and the support of companies such as M&S and Sky, based on what was showcased at this Green Marketing conference, can only assist credibility. The difficulty for all consumers however is knowing who to trust and who to treat with cynical contempt. This is not easy in an area that is fraught with conflicting advice and in which few, if any, independent and trusted referees exist.

The potentially important thing about this conference from the loyalty perspective was that consumer loyalty programmes have been instrumental over the last 20 years in the UK in changing consumer behaviour, from the early impact of Air Miles in the late 1980s to the more recent growth of the Nectar scheme in penetrating nearly 60% of UK households. Despite frequent surveys, critical analysis and 'guru' put-downs in the media they have largely endured due to the fact that they have consistently delivered results for their sponsoring brands and provided vastly better customer insights. The members of these schemes have not been forced to join; they have largely responded due to the fact that they have enjoyed added value from engaging with the various schemes' customer value propositions. So, if they have proved useful to retailers in changing consumer behaviours and in driving purchase patterns towards specific sponsor brands, and popular with consumers since 'every little helps', why are these techniques not being used genuinely to promote and encourage greater environmental awareness and beneficial spending behaviour from consumers? Some programmes are but many seem to be merely 'getting on the green bandwagon'.

You choose, it's not easy and as a consumer it is probably going to come down to which brands you trust. But on reflection, that has always been the case and consumers are not morons (as David Ogilvy famously pointed out over 30 years ago), they are you and me and we have to make our own choices based on our best judgements. Let the market decide may be the best way forward, but loyalty schemes could help the global 'push' required in response to the threats outlined by scientists, but only if they are genuine in their intent.

Peter G Wray

The author is managing director of pgw Ltd.

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