Customer Experience and Green (part 1)
It seems you cannot turn on the television, read news via internet feeds or listen to the radio without hearing something about a company going “green.” Rising in almost equal share with the public relations and marketing endeavors of companies going green is consumer skepticism toward advertising or marketing efforts. The term the press applies toward this skepticism is “green washing.” So, here we are again. Companies proclaiming one thing and consumers believing something different, if they believe any part of the message at all.
At least, that’s what the press seems to want to believe and want you to believe. It certainly is what they portray. But is it really true? Is that where we are at in the intersection of consumer’s attitudes toward green and businesses attempts to go green?
I have the honor of being selected to speak at the upcoming Sustainable Brands ’08 conference. For almost two years now, we have been studying the major shifts occurring within the consuming populace and business actions in-depth. What I will be presenting is the latest in our Consumer Global Warming Monitor™ findings. This is hot-off-the-press research detailing specific relationships between consumers’ attitudes toward green, price sensitivity, convenience and companies’ brand and market position.
Throughout my time in research, we have sporadically studied the curiously unconcerned attitudes and lack of purchase response from consumers toward anything with an environmental message or purpose. Oh sure, there has always been a segment of the population which took care for the environment to heart in their practice, beliefs and purchase habits. But this segment was very small, certainly not of enough market size to warrant large scale focus from companies’ product or service creation endeavors.
To use a purchase habit most of us conduct as a point of reference, there was a long time when you could not give organic produce away.
Even where I live, in the progressively, eco-friendly and activistic Pacific Northwest, one of the very few successful environmentally focused enterprises of the past was a small co-op grocery store chain. Even though this chain was a huge local favorite and situated in the eco-friendly Pacific Northwest, they had to carefully select their physical locations in very specific areas of the greater Seattle area. Otherwise, their store operations would fail miserably.
Today, Whole Foods and other “green, organically-focused product” chains are among the fastest growing grocery establishments in the U.S.
What’s changed? Better question yet, from the customer experience perspective, did we see this coming and should companies pay attention to customer experience variables within this change? I know, I never ask just one question.
As to what changed – the answer is simple. The same change as occurred during the internet revolution – the consumer changed. Only this time, in this area of purchase power, the change is not driven by technology innovation, but its results are begging for innovation from companies. It’s driven by very exacting and tedious – from the consumer’s perspective – extraneous factors(see earlier posts to understand this influence pattern on consumers). These factors are outside of the direct control of consumers, but have enormous impact on their product and service choices moving forward.
The list is quite long as to changing influences, but the most obvious influence is the price impact of rising oil costs. Anyone not willing to attribute changing attitudes towards green product purchases to this factor has not been doing their research.
Our own research shows that other changes, such as in formerly established weather patterns and more directly upon consumers through changes in their health, have created a very strong potential market among 47% of the U.S. population for green related products. The fact businesses have been slow to optimize products for this space speaks more to the immobility of business than to consumer’s buying habits. If you understand customers, you realize in order for new products to be successful, attitudes have to change first. That has happened.
Once this happens, market success will come to those firms that stretch beyond business as usual and create meaningfully superior and differentiated products which speak to the new needs of the customer. As with any consumer attitude and behavior change, businesses lag the leading indicators of consumer choice. Believe it or not, as late as 2004, I was still speaking on the fact the internet was here to stay and it offered businesses an amazing new vehicle into the hearts, minds, souls, and relationships with consumers.
This disconnect between consumer desires among a mass audience and business’ ability to adapt and create product to fill that gap is shown in our research. Our research shows that even the most adamant and concerned consumer is finding it difficult to conduct three or more green purchase actions in their consumer life over the course of a few months’ time. This despite the fact we see 47% of the broad market U.S. consumer ready and willing to go green if: 1) the product quality is not inferior to other competitively priced options and 2) if they are aware of the green alternatives in a message format that speaks to them.
The following descriptions are of the six distinct consumer segments we found among American consumers:
The Alarmists: Extremely concerned. Hold big business, industry and government responsible for global warming. Believe global warming is impacting their health. Actively engaged in “green” activities (average of 3.3 in past year) and in purchasing “green” products (83%).
The Enthusiasts: Extremely concerned. Believe big business, industry, government and individuals are addressing the problem of global warming. Actively engaged in “green” activities (average of 2.5 in past year) and in purchasing “green” products (75%).
The Active Awares: Highly concerned. Worried that profit motivations are preventing business, industry and government from providing solutions to global warming. Actively engaged in “green” activities (average of 3.0 in past year) and in purchasing “green” products (75%).
The Passive Awares: Highly concerned. Worried that profit motivations are preventing business, industry and government from providing solutions to global warming. Less engaged in “green” activities (average of 2.3 in past year) and in purchasing “green” products (55%).
The Indifferents: Undecided about global warming, yet moderately concerned. Still believe it is somewhat important for business, industry and government to address the problem. Less engaged in “green” activities (average of 2.1 in past year) and in purchasing “green” products (30%).
The Non-Believers: Believe global warming is not happening, and that no change is required by business, industry or government. Nominal engagement in “green” activities (average of 2.0 in past year) and in purchasing “green” products (10%).
For clarification, such actions as recycling do not qualify as green activities. Our research found these actions have gone mainstream, not out of overwhelming public support but from specific regulation impact upon consumers. Recycling is no longer a differentiating variable. Other actions which force a trade-off choice of current products or services for those more eco-friendly are predictive of a consumer’s real attitude and position relative to green products.
So where does customer experience fit with this change in consumer attitudes and the impending change in product purchase patterns? Squarely in the middle of all of it of course!
Right now, businesses are educating themselves on green; what it means, how to do it right and profitably, and how to think about it from a longer perspective than merely next quarter’s financials. One of the primary areas where green is gaining huge momentum is in the building industry. However, decisions to go green with architecture are being driven at the Board Room level by the most elementary of strategic reasons.
Believe it or not, companies are going green in their building choices based on as of yet theoretical, anticipated strategic positive impact which will last for six months at the most. Yes, you read that right. Six months worth of positive brand impact is driving the majority of executive decisions to go green with their building choices.
Going green in this area gives companies the ability to claim they were first in their industry, their geographic area, or some other area of first-mover advantage. This is then sung long and loud in their marketing messaging. All toward the end goal of gaining a positive hit in their brand perception by being able to state they were “first” in this area. Hmmm, that does sound a little like what the press is calling “green washing” doesn’t it?
More importantly than that argument though is the fact that it doesn’t take a rocket scientist to realize the positive impact of first mover advantage quickly wears out within any particular marketplace. There can only be so many “firsts” and then you need a better reason to make the change, create the products, fund the innovation, etc. Currently, there are a number of heavily-funded academic studies attempting to connect the dots for companies between potential customer actions and the impact of going green. Something beyond the first mover advantage claim.
Hey, here’s one – what about your customer experience? How will that be affected by going green?
To the question I asked earlier about whether this consumer change could be predicted, the answer is yes of course! But with a major caveat, that big IF of; are you asking the right questions in a meaningful manner of your customers and potential customers through a systemized feedback mechanism? Something like, say, a Customer Experience Success® program?
The answer to how that occurs next time.
