Sustainability’s Dirty Little Secret: Most Customers Don’t Care.
By Lynnette McIntire, CEO of Silver Birch Communications, Former Director of Sustainability at UPS, and Lewis Institute Senior Fellow in Social Innovation. The Lewis Institute is proud to give thought leaders, innovators and risk takers in their fields a platform to share their perspective with our community. The opinions expressed here are their own.
First, let me say, I am a believer in Sustainability and Corporate Responsibility. I’ve made my career purpose to be an advocate for its principles. I have witnessed how environmental stewardship and philanthropy truly can lead to efficiency gains, improved employee retention, market insights, and improved economic conditions that benefit business. I also have seen how neglecting the basic tenets of corporate responsibility have led to the demise of companies. Good governance, responsible products, accountability across the supply chain, fare wages, protection of data and privacy are no longer just Sustainability Report rhetoric; they are the principles necessary to survive in today’s skeptical marketplace.
Nevertheless, sustainability advocates within companies are still on the losing side of resources, especially marketing budgets. I’m speaking specifically about companies whose products and brands aren’t “Dark Green,” those companies whose primary raison d’etre is social and environment benefit.
In most companies, sustainability communications programs are competing for marketing dollars. But they almost always lose out to research-proven, revenue-generating products and services. I can cite as excuses the fact that sustainability programs typically are built to generate goodwill, enhance reputation and brand, or even to keep activists and adversaries at bay – all valid reasons for investment.
But how can Sustainability and Corporate Social Responsibility (CSR) professionals wrest the dollars from their peers?
Is the solution to invest more in market research to justify budget outlays for sustainability advertising, social media sites and other communications channels? Sure, that might help. But the truth is (Prepare for Blasphemy), most of your customers DON’T CARE.
Let’s face the facts. Chances are your sales teams have been telling you that for years. Most customers would rather save a penny a lb./a piece/a unit than pay a penny for an eco-benefit. The sales force will tell you that they have never/rarely had a customer even raise the issue of the company’s corporate responsibility performance. Even in the case of companies that add questions to their RFIs or supplier invitations around sustainability, rarely do those companies follow up on the answers or disqualify suppliers from the bidding process.
Even broad-based market research indicates that only a small percentage of consumers and even fewer procurement officers are driven by CSR considerations over price. Taken at face value, this can be a pretty damning and depressing set of numbers. Why would anyone invest in sustainability when the market that cares is less than 10%?
So here’s the twist. Why do we view a single-digit marketplace as a segment without value? It’s called a niche market, people! It just might be the growth sliver you’ve been looking for.
Like any niche, CSR-conscious customers need to have specialized messages, products and communications channels to shift their loyalties and dollars to you. Since their numbers are small, you don’t need buckets of money to reach them. And as with any targeted marketing program, you can reach out to them directly and track their response more easily than mass market branding campaigns that seem to be the usual direction of sustainability marketing. Some of those customers might just be the very beneficiaries that your corporation is already reaching through charitable grants, community outreach and diversity recruitment. Right now, there are decision makers at companies who really do care about these topics even if their employers don’t. Sometimes, the shift may come at the individual level rather than the corporate policy level.
The truth is that niche marketing to CSR customers shouldn’t be the sole focus of corporate sustainability. Greater economic gains can be made with efficiency gains, waste reduction and conservation.
But it’s never a bad thing to seek out growth. That’s what will make Sustainability truly sustainable.
So quit trying to assert that sustainability can tip the balance “all things being equal.” Go after those customers who care. It’s a worthy niche.