In May 2008 many consumers told us via our Eco Pulse study that they were not only willing to buy green products; they were willing to pay more for them. Around the same time Earthsense conducted their Eco-Insights® study and found similar results.
In September 2008, however, consumers told us through our fourth annual Energy Pulse® study they were more concerned than ever about rising costs and finally prioritizing energy efficiency as a means to reducing monthly bills — as opposed to increasing their personal comfort. They even indicated a greater likelihood to purchase energy efficient products than we saw in 2007.
And then the bottom fell out of the financial markets. Retailers saw sales drop dramatically over Christmas and car manufacturers experienced their worst December in recent memory. So how green are consumers willing to be now? 78% of consumers in our Eco Pulse study told us they believe green products sometimes or always cost more…so in the face of the current economy, how willing are they to spend more to be green?
Perhaps not so much, according to these data points:
- Retail Week ‘s ICM poll last week revealed that more than half of respondents said that, at the moment, green and ethical considerations are of little or no importance when deciding which products they buy. The reasons they gave were largely financial – 70 percent said the biggest problem with choosing these products is that they are too expensive. Moreover, only seven percent said they currently rate the environment as a priority in their lives – nearly three quarters said either the cost of living or unemployment was their most pressing concern.
- At the beginning of October, it emerged that sales of Tesco’s Finest and Organics ranges had stopped growing as shoppers rein in their spending. Chief executive Sir Terry Leahy said that while customers still wanted to buy the products, “they don’t feel they can with the economic pressures.”
- As PricewaterhouseCoopers director for sustainability and climate change Teresa Fabian says: “Even pre-credit crunch, people stated price was the biggest barrier to buying green or ethical products. Consumers are tightening their belts and those products that are a significant premium will be most affected.”
So does this mean a green strategy isn’t worth pursuing? Absolutely not. Here are three guiding principals to keep in mind:
- Green can be the deciding factor in a mature product category. In this case, you might not be able to command a higher price point…but you could steal market share from a competitive brand if your product and the competitor’s product serve the same function and are priced the same. Your product (or your packaging) being green can be the differentiator that causes a consumer to choose your product over the competitor.
- Appeal to emotional drivers. Right now some consumers are hanging on to their money not because they can’t afford to spend it, but as a way of helping them feel secure and in control. Thus, your marketing message must convince them that they will, in fact, feel more secure and in control by parting with a bit of their money to buy your product. ROI is king right now. We also see concerns about health – particularly health of one’s children – as a strong driver. So if you have any provable claims about how the green properties of your product can do improve a family’s overall health, run with it.
- Let your conscience be the guide and build for the long haul. Consumers can smell when a company is being sincere about its green claims. And most consumers feel favorably about companies who sincerely want to do the right thing for the environment – particularly those companies who are adept at translating that commitment into a benefit for its customers (i.e. lower prices, a feeling of happiness or personal satisfaction, etc.) So build your green commitment based on what makes sense to your company from a long-term values standpoint. If you’re in it for pure reasons, consumers will notice, and they’ll reward you for it in the long run.