Various studies, including one by MIT Sloan/Boston Consulting Group, confirm the top challenge for any organization is achieving competitive differentiation, i.e., convincing the buyer that you are different, and better, than your competitors.

Contractors have seen the performance data tied to sustainability—organizations with credible sustainability programs are performing materially better: higher revenues, profits and valuation, as well as more productive and engaged employees—than their non-sustainable peers.

Also familiar is the “competitive differentiation” cause of the above: +$1 trillion in consumer/corporate spending looking to move to credible sustainable brands; consumers willing to spend 10–15% more for credible sustainable products; 87% of the largest buying group willing to purchase from, and be loyal to, credible sustainable companies.

In all forms of commerce, the buyer defines demand, and successful organizations are rewarded for satisfying that demand. Sustainability is no different. Consumers are demanding it and rewarding organizations that differentiate from the pack and credibly show they are sustainable.

Up until now, however, this relationship has mostly occurred between consumers and large organizations. Small- to medium-sized enterprises (SMEs) have historically not embraced sustainability as much as their bigger brothers because:

• Sustainability certification has historically been viewed as too costly for a SME to pursue; and
• SMEs have historically been more reliant on sales (e.g., price, discounts, direct sales, personal relationships) than marketing (brand image, corporate image, community relationships) to grow.

COVID-19 could change that.

The post-virus recovery will be, for some SMEs, a cat fight. Likely, many industries will face lower client/consumer demand; credit terms will be tightened; debt and financing will be harder and more expensive; restarting operations will often occur with a loss of key personnel; social distancing rules will often create costs and reduced production; direct one-on-one selling will be reduced; and the historical sales growth tool will be less effective, as everyone will be trying to ramp up at the same time, giving contractors less margin to work with.

This is a daunting task for current corporate leaders. Like all market corrections, many organizations will fail as their leaders will be unable to adjust to the newest “new normal.”

For many SMEs, whose point of difference has historically been a person (e.g., leader, sales rep), or a price point, finding a new, non-individual, non-price/margin differentiation tool will be the key to survival and capturing market share. In other words, SMEs are going to have to find a way to get buyers to like them more than the other guy, without depending as much on one-on-one personal relationships and/or a cheaper product, as there will be less direct sales and more competitive discounting.

Custom, one-off, sustainability programs remain cost-prohibitive for SMEs. But other globally-recognized, SME-designed, sustainability certification programs exist to allow for SMEs to become certified sustainable via a legitimate program.

With a sustainability certification in hand, the SME can augment its traditionally sales-heavy strategy with a brand differentiation promotion or marketing program, just like it has seen its bigger brothers successfully accomplish.

Many SMEs will become sustainable because it has become cost-affordable and is the right thing to do. Others will do so because the market dictates that they have to—potentially delivering a big competitive differentiation, and more bang-for-the-buck, in a post-virus environment.