Innovations in ROI for Customers: the Environmental Edition | Innovation Management

Value propositions are a key element to success. In the modern business climate, the environmental value proposition, in particular, is uniquely effective.

Value propositions are a buzzword these days, especially when it comes to the environment. Politicians run on platforms of sustainability and celebrities are increasingly throwing their considerable weight behind the cause of conservation, such as Robert Downey Jr.’s 2020 project to “clean up the planet significantly” with robots and nanotechnology.

As is so often the case, though, the true meaning of a term can be stereotyped or, even worse, lost in all of the chatter. If you’re unfamiliar with the true concept of a value proposition — and an environmental value proposition, in particular — here is a guide to both the term and the impact it can have on your company’s bottom line.

The Power of Value Propositions

A value proposition, in essence, is a concept that describes a company’s innovative services or features that provide unique benefits to their customers.

Take, for example, the classic lemonade stand. Consider two rival stands that set up shop across the street from one another like a poorly crafted plot for a family-friendly, straight-to-television, 90s childhood action drama. In our example, each stand sells lemonade, but not in the same way.

The first stand purchases locally grown lemons at the farmers market down the street, hand squeezes them, and then uses organic coconut sugar and honey to create a deliciously healthy treat. The elite drink attracts the attention of informed culinary aficionados who are willing to plunk down $5 per cup as they pass by.

The second stand purchases two tall cans of Country Time lemonade and pink lemonade mix from the local Walmart. They run the garden hose out to the stand and produce a copious amount of excessively sweet, very unhealthy lemonade in two different flavors. Passersby who are enchanted by the “Sand-Lot-esque” approach happily dig a dollar out of their pockets to drink the rubbery-tasting liquid and remember simpler times.

Both of these stands have distinct value propositions. The first promotes a healthy, organic lemonade that, while expensive, speaks to the health-conscious consumer. The second aims for a cheaper but more varied product offering that appeals to either nostalgic or cost-conscious consumers. Both stands sell lemonade, but their value propositions are clearly different.

To take another, real-life example: the rival fast-food chains Panera Bread and Subway, which both sell sandwiches. However, their value propositions couldn’t be further apart. Panera Bread focuses on an experience: providing a predictable meal. Subway, on the other hand, represents customization and the concept of giving the customer exactly what they want.

Both restaurant chains sell affordable sandwiches. However, they are also savvy enough to know exactly what their customer base is looking for, and they’ve honed in on promoting and providing their unique value proposition.

Environmental Value Propositions

While value propositions can come in all shapes and sizes, one approach that holds significant weight these days is the environmental proposition. Promoting the message that your products and services take things like the environment, sustainability, and circular economy business models into consideration is an attractive message to the modern consumer.

Take, for instance, the transportation industry. Pollution is a major concern when it comes to vehicles. It’s estimated that the trucking industry alone burns over 800 million gallons of fuel each year just from idling. This major environmental concern has enabled car companies around the globe to focus on hybrid and electric vehicles in the name of environmental value propositions that are aimed at reducing pollution.

Another good example is the paper industry. While paper is generally considered an easy commodity to recycle, the common practice of shredding documents actually makes paper unrecyclable by traditional standards.

To provide an environmental value proposition aimed at boosting their services over the competition, companies like Shred Nations have taken great pains to bail their professionally shredded documents in a manner that makes the waste manageable for recycling plants. This allows them to boost their own existing service without the need to change the service itself. Instead, they simply coupled it with an environmental message that added indirect value to the consumer.

Environmental value propositions can even be implemented with intra-company behavior. Utilizing online innovation management systems, in order to increase sustainability, for instance, may seem like something focused on boosting productivity and efficiency within a company.

However, it can also be utilized as a value proposition worth championing. The message that even within your own company’s internal systems you take great care to operate sustainably can speak volumes to a potential customer or client that is deciding between you and a competitor.

In addition to the customers, focusing your company’s efforts on environmental value propositions can even encourage your own team to remain invested in their work. Sustained innovation can be accomplished through instilling a sense of ownership to your employees, and the knowledge that an employee is working for a company that cares about the environment within which it exists can have a tremendous impact on both loyalty and innovation over the long-term.

Increased ROI for Consumers is Increased ROI for Your Company

At the end of the day, finding consumer-conscious environmental value propositions for your brand can have a significant impact on your bottom line. A recent year-long Nielson study found that over the course of their research:

All of that took place in a single year. The study also found that the companies that capitalized on this message of sustainability were generally in an ideal position to outperform and outlast rivals within their industry.

In summary, creating environmentally considerate value propositions for your industry can be a key component to providing an increased return on investment for your consumers, which can simultaneously boost your own bottom line.

While environmentally conscious business practices may have been eschewed in the past for their costs and complexities, we have officially come to the point in the pendulum swing where that environmental focus may be the deciding factor that allows your company to succeed over the long-term.