Again, the relevance of your green strategy may not necessarily be to sell more stuff. It could be to attract and retain talent. "As companies start to think about their various constituencies, they may come to learn, 'We didn't realize that a huge number of our employees, as well as our recruits, are interested in working for a company that excels in green leadership,"' says Shapiro. "And they could actually reduce the cost of turnover and the cost associated with hiring and retraining people by demonstrating their green leadership. So the relevance factor could be, 'Is this something your customers want to buy?' But it could also be, 'Is this something you'll be rewarded for by your employees, or by investors, or by other actors in the marketplace?"'

EFFECTIVE MESSAGING

How can you translate complex information into distinctive, compelling messages? Few companies do a good job at making sense of what often can be mystifying and mind-numbing facts and transforming them into a compelling story.

It's not that companies don't try. It seems like every other energy- or climate-related advertisement or press release I've seen in recent years offers some comparison with taking cars off the road. "In 2005, HSBC purchased carbon offsets equivalent to 125,000 tons of carbon emissions -- the same as taking 29,000 cars off the road," says the bank's Web site. Xerox prevented the emission of 87,000 metric tons of carbon dioxide in 2006, "the equivalent of taking more than 18,000 cars off the road," according to a company press release.

There's nothing wrong with either of these, of course. I'm assuming that the authors of each of these claims did the math correctly -- that a typical late-model sedan emits about 5 tons of carbon dioxide gas in a year. The point is: Is an impressive number of eliminated cars -- or planted trees, electrified homes, conserved Olympic-sized swimming pools of water, Eiffel Tower heights of reduced waste, trips to the Moon of saved driving, or other comparative metrics -- even meaningful to consumers, especially after they've heard similar statistics from myriad other companies? (I sometimes wonder whether adding up all the cars-taken-off-the-road marketing claims would yield a number that exceeds the actual number of cars on the road. But I digress.)

So figuring out an effective way to translate environmental data is key.

It's also about figuring out the right channels. What are the appropriate media? What are the best moments to reach people on these issues? Are advertising and PR the answer? Not always. "We're hearing more and more that consumers and activists are pointing out the irony that a company may spend twice as much promoting a green achievement as they did on the achievement itself," says Shapiro. "An effective message is not always one that's marketed with the most dollars." Rather, the effective message may be the one that's done cleverly, virally, or humorously. Or it may be one that's tied to a partnership or delivered through nontraditional means.

In other words, it's the medium as well as the message.

DIFFERENTIATION

Are you doing something that's unique and distinct? Does your strategy sound like you're truly committed or simply mimicking or mirroring what others have done?

Differentiation is difficult because the bar continues to rise. Just a few years ago, only a handful of companies had prominent green initiatives. Now you'd be hard pressed to find a major company that doesn't. So differentiating is getting harder than ever.

This is one place where smaller companies may hold an advantage. Small, local firms have been slower to the green scene because they lack both the human and financial capital needed to make changes and the prodding from activists, customers, employees, investors, and others. Because of this, it's easier for, say, a local printer, travel agent, or retailer to distinguish itself as an environmental leader. They don't have a lot of green competition, and environmental expectations of them typically are lower than for larger companies. A small company could distinguish itself simply through a single action -- encouraging employee volunteerism with environmental groups, for example, or locating in a certified green building.

Even for larger companies, differentiation can have a lot to do with the competitive environment. For example, in the information technology arena, where Dell, Epson, Hewlett-Packard, IBM, Lexmar, and other hardware manufacturers have engaged in a race to see who can be greenest -- with equipment that is energy-efficient and can be recycled easily, for example -- it's harder to stand out.

"Differentiation doesn't necessarily mean that you're doing more than everybody else," says Shapiro. "It's doing something that is distinct in signature, so that people can identify you and what you do as green in a particular way."

Credibility. Relevance. Effective messaging. Differentiation. These are the components from which a successful green strategy are made.

The order of these four components may change for some companies. For example, it may be more appropriate to begin with relevance, identifying the value proposition that's appropriate for your customers and company culture, and then thinking about how to go about messaging it in a manner that's credible, differentiated, and effective.

"We've had this interesting debate internally about the right place to start -- which of these four factors," says Shapiro. "I have come to the conclusion that it depends on where you are as a company. A company that is newer to sustainability may want to start with credibility, since that's most important for them. But if you're more evolved -- say, Patagonia -- you're going to be in a different place; you might start with differentiation."

Bottom line: You can start anywhere. The important thing is to cover all the bases.

Joel Makower is executive editor of GreenBiz.com.

Excerpted with permission from Strategies for the Green Economy, by Joel Makower, published by McGraw Hill. © 2008 Joel Makower.