By James Murray, Source: BusinessGreen

One of the most remarkable, and yet rarely remarked upon, characteristics of the many different clean tech companies BusinessGreen reports on each month is the extent to which they all face a very similar challenge.

Whether they are selling energy efficient lighting or solar panels, electric cars or carbon software, they all have to battle with the dilemma presented by the disconnect between capital and operational costs, the challenge of convincing people to pay a little bit more upfront to realise significant savings down the line.

For the most part, these are well-managed companies trying to sell good products and services, and as such they have proved fairly adept at over-coming these barriers and building up a customer base featuring high profile corporate clients that are committed to greening their operations. But even the most bullish clean tech entrepreneur will admit the roll out of energy efficient and renewable energy technologies is not progressing fast enough for either the planet or their ambitious growth plans. Too many barriers remain in place. Too many businesses are still rejecting proven green technologies that offer them long term savings and performance improvements.

Even taking into account the undeniably tough economic environment, these barriers to deployment are hard to explain. In the past few months I have spoken to LED technology firms, utility giants offering guaranteed savings through new energy performance contracts, solar installers, carbon software developers, electric car and van manufacturers, and even a producer of highly efficient hand-dryers, all of which boast remarkably robust technologies or services that will deliver significant energy and carbon savings, as well as improved reliability and green credentials. Return on investment periods typically range from the kind of seven to eight year time frames that may admittedly prompt frowns from short-sighted financial directors to rapid 18 month to three year payback periods that should always prove genuinely compelling.

Moreover, these are no-longer fledgling technologies. Five years ago you could understand why businesses would be cautious about deploying largely unproven new products. But now energy efficient technologies such as LED lighting and greener IT systems have countless real life case studies to draw on, while carbon software solutions, building management systems, and microgeneration technologies have all been successfully deployed by some of the world’s largest companies. Only electric vehicles require significant infrastructure to be in place for them to work effectively, but even here the technology is proven and companies are demonstrating how zero emission cars and vans can be used within corporate fleets. We are not talking about hydrogen-fuelled cars or wave energy arrays here – most of the green products that should appeal to business customers are already mature, reliable, and offer tangible returns regardless of government policy vagaries.

And yet many clean tech companies privately voice a similar complaint: securing customers for these compelling green propositions is harder than it should be.

Despite ever more ambitious commitments to sustainability, rising energy prices, and financial returns from clean technologies that are either guaranteed or near guaranteed, too many prospective corporate customers remain unmoved. As one remarkably candid executive at an LED technology firm that promises energy savings of between 50 and 80 per cent told me, “we thought we had a ‘no-brainer’, but we don’t”.

The key question for providers of green technologies and services is how to tear down these barriers to deployment. This is not in any way a crisis, many of these companies are still growing fast and are winning high profile customers. But there is a widespread acceptance that if the UK is to meet its ambitious emissions reduction targets and normalise green technologies they have to move faster.

Thankfully, growing numbers of firms have realised the biggest barrier they face is the disconnect between capital and operational costs and are working on financing and pay-as-you-save schemes that promise to deploy energy efficient and renewable energy technologies at no upfront cost.

I’ve noted in the past how former CBI director-general Richard Lambert criticised the banks back in 2008 for failing to develop innovative financing options that would allow businesses to spread the cost of green upgrades and pay for them using the long term savings they realise. He was right to do so and at long last the financial sector has got the message and is starting to work with providers of clean technologies to offer attractive financing packages.

The Energy Performance Contracts that are increasingly being touted by energy suppliers and the solar loans offered by companies such as Engensa are all part of this trend, as is the government’s potentially revolutionary Green Deal scheme. They promise to make green improvements so easy that the financial case against them dissolves in the face of negligible capital costs and immediate financial and environmental savings.

But sadly these pay-as-you-save offerings, while attractive, are unlikely to prove a silver bullet. As with all green technologies and services they need to be accompanied by effective marketing and education efforts if they are to prove transformative – and it is in this crucial area that too many clean technology providers are failing to get their message across.

The green business sector has proven pretty effective at the kind of soft and fluffy consumer-focused marketing, PR, and education campaigns that are designed to make people think, challenge their values, or embrace green lifestyle products. But I’d argue it has proven far less effective at the basic nuts and bolts of business-to-business marketing: the identification of a target audience; the simple and compelling explanation of what a product is, what benefits it will offer, and why you should want it; the connection with budget holders; and the distribution of easy-to-understand case studies and proof points.

Too many green business campaigns fail to adhere to these basic best practices and remain wedded to PR fluff and consumer-targeted cartoonish adverts designed to create nothing more than a vague sense that businesses are committed to more environmentally friendly practices. It is as if Henry Ford leapt forward 100 years and adopted the current approach to marketing cars as a lifestyle accessory, before explaining to everyone what a car even was.

Green products and services can be as financially and technically compelling as you like, but if they are not backed by the kind of intelligent, targeted marketing that properly explains what they do and how they work then it is going to take years longer than it should for them to be adopted. You will never have a “no brainer”, if the brain of your target audience does not fully understand what they are being sold.

I fully accept this argument can be dismissed as self-serving. After all, BusinessGreen does offer its commercial partners the opportunity to communicate with and advertise to a highly targeted audience of green professionals. It is undoubtedly in our interests for more green businesses to understand that if they want to accelerate the roll-out of their technology then they need a robust marketing strategy and budget to overcome barriers to deployment.

But I am not the only one making this case, as witnessed by the recent Green Alliance report that successfully implored the government to support the launch of its Green Deal scheme with a national communications campaign. Moreover, it is hardly controversial to point out that without more effective and targeted marketing the roll out of green technologies will take longer than it should. You only have to look at the last great technological roll-out, the IT revolution of the last 30 years, to see how a blitz of marketing, advertising, and education campaigns normalised the technology, while making it highly desirable to corporates and consumers alike.

If clean technology providers want to deliver the green economic revolution then they need to show the same ingenuity and commitment when it comes to marketing as they have shown when developing innovative and attractive technologies and services. For many clean tech firms the technology barrier has been torn down as new products have been proven to work, and the financial barrier is increasingly being torn down by clever financing schemes and falling costs, but until the education barrier is torn down and target audiences fully understand their products deployment will remain slower than hoped.

It is time to shelve the immature and fluffy green communications and PR campaigns that have created plenty of buzz and not much else, and adopt the hard-nosed transactional-focused business-to-business marketing techniques that have proven so effective for other emerging sectors.

In short, it is time green marketing grew up, stopped trying to change the world, and instead focused on trying to drive some sales.