The environment is rapidly deteriorating thanks to our neglect and the cause for concern is at an all-time high. Customers want to support businesses that use environmentally safe practices when producing and distributing products so they can put their money toward good causes. This movement is called conscious consumerism and according to grow ensemble“ it is when buying practices are driven by a commitment to making purchasing decisions that have positive social, economic, and environmental impact. In other words, it’s a movement whereby consumers vote with their dollar by buying ethical products, avoiding unethical companies, and sometimes not purchasing at all. So, a socially or environmentally conscious consumer will think whether consumption is necessary, then once they decide to buy”
The concept of a “conscious consumer” dates back to the 1970s. But the first inklings of the modern concept of “dollar voting” can be traced back even further to 1954, when economist James Buchanan stated that individual participation in the economy is a form of pure democracy, in his article Individual Choice in Voting and the Market.
We in communique help many of our clients who ask, “how can we attract and retain the right customers?” by saying it’s NOT “ how can companies attract and retain the right customers” its “Why”? why do you want the right customers onboard? How would these customers help your purpose as a company come to life? By digging deeper on this point, we help them understand which aspects of ESG should they focus on and then we follow it up with a plan that would help them attract and retain their right customers.
According to Forbes Environmental, Social, Governance (ESG) strategies and ESG Company analysis are here to stay and they will help answer the question “ How can companies attract and retain the right customers?” their research on the customers of today found that about 70% of customers would be willing to pay 5% more for alternative “green” products or services of the same quality, 70% of people want to know how brands are addressing social and environmental issues, 48% of customers would likely change their consumption habits to reduce their impacts on the environment, and almost half of companies that implemented ESG company analysis and ESG strategies aimed to capitalize on business and growth opportunities.
A report ON how to attract the right employees by Nielsen found that 73% of millennials are willing to pay extra for sustainable offerings, and with more millennials filling positions of power, ethical marketing is more important than ever before. An increasing number of customers are choosing to invest in brands that have a clear ESG Company analysis and ESG strategy and make ethical, socially responsible decisions that don’t leave anyone in harm’s way or unaware about what they’re buying. The buying process is becoming less about what’s convenient and cheap and more about what’s sustainable and honourable.
According to Deliotte to attract and retain the right customers we need to understand their behaviours and this is why they surveyed hundreds of consumers globally where the main aim was to help answer the question “how can companies attract and retain the right customers?”
Here are some of their findings
- Sustainability remains a key consideration for consumers in 2021 with 32% of consumers highly engaged with adopting a more sustainable lifestyle.
- Equally important, 28% of consumers have stopped buying certain products due to ethical or environmental concerns and due to companies not having a clear ESG strategy or ESG company analysis
- Gen Z are adopting more sustainable behaviors than any other groups: 50% reduced how much they buy and 45% stopped purchasing certain brands because of ethical or sustainability concerns. As wealth transfers to younger generations, sustainability and ethical considerations will need to become the standard and should be transparent throughout the value chain.
- Overall, lack of interest remains the main barrier to adopting a sustainable lifestyle, followed by the perceived expense and issues around accessing relevant information.
- Consumers want to do more but many want brands to take the lead with 64% of consumers wanting brands to reduce packaging, 50% want information on how to recycle and 46% need clarity on sourcing of products.
It is clear that this growing consciousness is leading to the rise of many trends from waste-free living to eliminating plastic use. These trends demonstrate the fast-changing market and customers pressure for transparency and a clear ESG company analysis and ESG strategy – both huge challenges that companies must face.
let’s go through the process of how to attract the right customers i.e., the conscious customers.
let’s us look at some of these trends that would help companies attract and retain the right customers i.e., the conscious customers.
There are many behaviours that conscious customers adopt and if we understood them then we can market our sustainable products directly to them. The university of Cambridge mentioned ten behaviours that are adopted by the desired customers those include:
- Incorporating minimalism into their life as much as possible. They Distinguish between necessary and unnecessary buys. When searching for everyday products, they consider how they are made and their entire lifecycle impact.
- Choosing to buy from companies that put planet and people first.
- Buying fair trade coffee, fashion, handicrafts, fruit and more.
- Buying earth friendly products that are made with natural ingredients and materials, e.g. a composting phone case.
- Buying cruelty-free, plastic-free toiletries and cosmetics.
- Limiting air travel and get around by using rideshares, biking, taking the train and public transport and if possible, drive electric vehicles
- Going zero-waste.
- Eliminating the use of single-use plastics and use reusable cups, utensils, bags and containers instead.
- Reusing items and buy second-hand whenever they can: perusing flea markets, borrowing from friends and family, shopping on online marketplaces and try to fix broken goods rather than buying new.
- Always recycling paper and plastic, disposing of old clothes responsibly, and considering composting at home
Before companies go out there and start marketing their sustainable products they need to check off the list below but it might be helpful to check off what your company is doing now, this way you will be aware of what needs to be done, plan your progress then track it.
By checking off this list and asking yourself the below questions you will get a sense if your customers and understand your ESG strategy and have a complete ESG company analysis.
- Do we have long-lasting products whose parts can be repaired?
- Are our products and services have identifiable benefit to our customer?
- Are we making things that benefit health or healthy activities (e.g., organic foods, mountain bikes, etc.)?
- Do our products and services benefit artistic or scientific activity e.g., pianos or astrolabes?
- Are we avoiding unnecessary product proliferation (including excessive options, whether of colours or accessories for popular products?)
- Do we have production or manufacturing processes screened by a third party (e.g., forest stewardship council (FSC), Bluesign Technologies) to reduce environmental harm?
- Are we being progressively transparent about the social and environmental impact of what you make? Is anyone in your industry working on a manufacturer- or brand-facing index? Participate.
- Are we guaranteeing our product unconditionally?
- Are we serving the underserved? Donate what we no longer need to those who do?
The above list is not comprehensive as many organisations have needs particular to their business model and corporate culture. We have selected the most generic questions and they are a combination of B.Corp Impact Assessment questions and others including Patagonia’s book “The responsible company”
Communique specialises in communicating Environmental, Social, Governance (ESG) strategies. Our work has impacted 150K employees, 200k customers and resulted in £300M investment deals completed. If you need help gaining buy-in from your leadership team or designing your ESG communication strategy get in touch