Stakeholders: Consumers Archives

July 11, 2007

Implications of Live Earth (Hello Consumers)

It was hard to miss the hoop-la around Live Earth, the mega-concert on all seven continents on 7.7.07. I'm not sure if they really hit the two billion viewer mark (seems hard to measure that), or what the long-term impact of Live Earth will end up being in reality, but Al Gore did declare it the "largest global entertainment event in history." I do know that my 70-year-old parents went out and bought bulbs and started unplugging cell phone chargers. So let's just say it was a big deal.

I didn't watch the entire coverage, but saw plenty. By and large, it certainly can't hurt and may do a lot of good. It won't add much to the discussion for me to pontificate on whether this thing matters, works, etc -- many other voices will cover that. Instead, here are some reactions with an eye toward what the business world can learn or look out for

The pledges. Gore raised his right hand (I thought he might pledge to defend the constitution ) and asked everyone to join him in saying seven pledges (which, by the way, were not that easy to find online). Besides the ones that have obvious impact on specific industries (a moratorium on coal-fired power plants!), the last one was really interesting:

"I pledge to buy from businesses and support leaders who share my commitment to solving the climate crisis and building a sustainable, just, and prosperous world for the 21st century."

This is asking consumers not only to understand whether the companies they buy from are green and ethical, but whether their lobbying efforts and political donations are supporting green-minded leaders. I have no idea how people are supposed to figure this stuff out on their own since the information on that is incredibly hard to put together. But the pledge itself is fascinating: it's a newer, larger definition of what consumers as stakeholders can and should demand. Also, it may point to an opportunity for companies that have nothing to hide, can use transparency to their advantage, and can tell a well-founded story about their full environmental impacts and what they're doing about them. What a great chance to build customer loyalty.

"Small steps" I don't know if there were talking points but everyone from Sting to Mayor Bloomberg to Rosario Dawson were in synch -- every little thing you do can help (or perhaps every little thing you do is magic?...sorry Police fans). But like my parents, millions of people will be looking for small ways to reduce their environmental footprint. Companies that can provide solutions will do well.

Language and imagery. One criticism: there was still a lot of "save the planet" talk. Sorry to be cynical, but the environmental movement has been using that language for decades and failed. We need to talk about saving ourselves, our economy, our way of life, etc. And they kept showing the curly-Q compact fluorescent bulbs. Those are still weird-looking to many people. Why not also show the frosted encased versions that look like a regular bulb. My point is that we're still a bit behind on how we portray the shift (except for the clear preference for "climate crisis" over "global warming" and the constant messages about saving money). So companies that can pitch environmental solutions with a combination of words and imagery that make the change seem like a life improvement, not just a way to assuage guilt over killing the planet, will also thrive.

Lots of other thoughts it was fascinating how little discussion there was on what exactly the climate crisis is -- maybe they figured people knew that already and were ready to hear what to do about it (probably a good call -- i love Al's PowerPoint presentation, but not everyone can stomach the science). Or, why did some artists need to politicize the event? I love Melissa Etheridge, but talking about criminal presidents and unjust wars was off-topic at best, and put off the 30% of the country that still support the President. Of course it would be within bounds to criticize leaders for doing nothing on this issue.

Obviously I could go on -- it was a long event. But clearly awareness is building in a profound way and consumers may just join this fight in earnest. Companies ignoring their new green demands better beware.

June 27, 2008

Conflicted Consumers

This post first appeared at Harvard Business Online.

How green are consumers in the U.S.? On one level, we haven't really changed all that much. Many pundits argue persuasively that without the rapid rise in energy prices, people wouldn't be buying smaller cars. And outside of some specific product markets, such as organic food, few are willing to regularly pay more for green. So it may be true that we're not that green yet, but there's something more important and subtle going on beneath the surface: the rise of the "conflicted consumer." This shift will drive tremendous change in products and draw customers away from some companies while they're not paying attention.

Last year, one item in Harvard Business Review's annual list of breakthrough ideas focused on research about these conflicted consumers, people who have social and ethical concerns about what they buy. Karen Fraser, whose consulting firm publishes the Ethical Reputation Index in the U.K., estimated that around 25% of consumers fit this description. The conflicted are distinct from the small group of diehards who will buy green or not at all. I believe that the true believers who will pay more for green are a small group that may not grow much. But the conflicted group, those looking for products that are environmentally or socially preferable at the same price and quality, is growing fast. And these people will jump ship as soon as there is a better option. Many companies will see their customers disappear and not know what happened.

More recently, some good data from the marketing agency BBMG gave us some more guidance on what this conflict is really about. In their survey of U.S. consumers, they discovered something really interesting about what attributes of products are "very important" to people when they shop. Ranking the attributes, quality and price were #1 and #2. No surprise there. But convenience and other sure-thing attributes had dropped from 3, 4, and 5, to be replaced by three aspects:

- Where was the product made?
- How energy efficient is it?
- What are the health benefits?

These three attributes explain a great deal about the rapid rise of some products, such as organic food. Keep in mind that these results were for all consumers, not the subset BBMG describe as "conscious consumers" (which is close enough to "conflicted" for me).

At the recent Sustainable Brands conference in California, the BBMG founders discussed their findings a bit more, and one thing caught my eye. Their survey showed that 35% of all Americans have avoided a product because of a company's practices. Again, people may not pay more for green products, but they may punish products and companies perceived as not socially or environmentally responsible.

This finding gibes very well with a study the Wall Street Journal reported on a few weeks ago on whether being ethical pays. The study asked people how much they would pay for a pound of coffee (or a T-shirt). Three groups were given very different descriptions, however, which painted a picture of either an ethically produced product (fair trade coffee, 100% organic T-shirt), a normal one, or an unethically produced product (industrial farm, low wages, and so on). The results were fascinating. As the Journal reported, "Consumers were willing to pay a slight premium for the ethically made goods. But they went much further in the other direction: They would buy unethically made products only at a steep discount.

I take this all to mean that conflicted, conscious consumers are a growing group. They still want price and quality — the BBMG study also showed that the most conscious segment wanted price and quality even more than the norm. But they want it all. If you can provide a green product at the same quality, you will win these customers. If you don't, they will pay a lot less for your product. The choice is clear.

August 11, 2008

Pitching Climate Change to Consumers

Recently I wrote about the rise of "conflicted consumers" who want greener options but don't want to go too far out of their way to get it. Is this fairly passive commitment to greener buying going to drive enough change to tackle problems as large as climate change? Some organizations seem to think not.

A few months ago Al Gore launched a $300 million ad campaign called "we can solve it." (Gore just proposed a goal for the country of moving to 100% non-fossil fuel energy in 10 years. Discussing that aggressive target is for another time.) The campaign features unexpected pairings of spokespeople - Al Sharpton and Pat Robertson, Newt Gingrich and Nancy Pelosi, and so on - who have apparently put their differences aside to push for more action on climate. The goal of the campaign is to "educate people that the climate crisis is both urgent and solvable." But the true aim is to get people moving - both politically and as consumers.

Gore's campaign is not alone. The "Together" initiative - with partners as diverse as TimeWarner, Dell, Target, and the city of Seattle - has similar goals but, more, it wants to provide consumers with actual products and services to reduce their climate footprint. Member companies can discuss their sustainability commitment in ads and on products as long as the NGO in charge (The Climate Group ) has vetted the claims. As the website explains, "we ensure that every product or service they offer through the campaign makes it easier or cheaper for you to do your bit and help tackle climate change." So the initiative is about purchasing your way to green. In that way, "Together" is very much like the Bono-led RED campaign for AIDS relief that Gap and others have pumped money into over the last year.

Why all this activity? Besides the obvious marketing benefit to companies, my guess is that many businesses have realized they need consumers to shift their thinking. The big trio of societal forces - government, business, and consumers - all need to change to tackle something as large and thorny as climate change. No segment can do it alone.

These campaigns, however, are fighting a historically tough battle. The environmental community has been waiting for 38 years (since the first Earth Day) to see a values shift in the U.S. They're still waiting. Sure, people buy more organic food, and they are flocking toward smaller cars to avoid energy costs, but the "conflicted consumer" is just that - conflicted. They aren't seeking out the green offering exclusively (which is why I advise companies to pitch their products on multiple attributes, not just green).

But all that said, all this marketing activity might work this time. The stars are aligned in a different way now than 38 years ago. Resource constraints are not theoretical anymore and market price signals couldn't be clearer. Greener offerings are also so much better than they used to be (yes, we can say it...many green products launched years ago, frankly, sucked).

So businesses should get ready to deal with more engaged, educated consumers who are tying their everyday decisions to global scale issues. Companies will need to change both products and marketing messages substantially.

Green marketing expert Jacquie Ottman recently gave an eye-opening talk about green marketing today (at Sustainable Brands '08). Of course she stressed the need tie green pitches to core product attributes, as I do. But she also went further and suggested that companies could start encouraging sustainable consumption. Perhaps, she said, companies could pitch buying less of something - imagine marketing execs bringing that campaign to their management! It only works of course, if companies make things that have lasting value or serve a need for longer than competitive products. Will Sarni, CEO of Domani Consulting (full disclosure: I have a business partnership with Domani), said this about Jacquie's talk: "She spoke the unspeakable." Yes, she did, and business should listen.

The big ad campaigns, combined with real world environmental pressures, will prompt many consumers to ask for something very different from the companies they buy from. Innovative companies will answer the call and happily and eat their competitors' lunch.

This post first appeared at Harvard Business Online.

February 9, 2010

Audi Green Police Ad: Funny or Not?

The Superbowl ads this year were fairly mediocre, on top of often being oddly dated and consistently anti-women. But one ad is getting a lot of discussion/attention in the green world: The Audi ad about the Green Police.

If you didn't see it, it depicts a new police force arresting people for choosing plastic bags at the supermarket or setting their jacuzzis at too high a temperature. Then a driver of an Audi "clean diesel" is waved right through an eco road block.

Was it funny? Yes (it's hard not to laugh when the eco-police, on their Segway's, ask a real policeman to "step out of the car" for drinking out of a styrofoam cup).

But was it also cringe-worthy? Yes. The ad really plays on all the worst stereotypes about how going green is hard and how you'll be judged. The redeeming quality is that the person doing the 'right' thing, the driver, gets a free pass.

But in terms of promoting green consumer choices, does Audi help the movement (and its own product) or hurt it?

What do you think?

July 8, 2010

Stop Confusing Your Customers with Cognitive Dissonance

Alternate title: Why are All the Lights in My Hotel Room On?

I recently spent two nights at the lovely, high-end Westin hotel in Ft. Lauderdale, FL. Around my room I found the now-standard signs that describe how the hotel will save water and energy by not changing sheets and towels. These green messages say to customers figuratively, and often literally, "we care about the environment." So far so good. But when I first entered my room, every lamp and light in the place was on...plus two radios.

The cognitive dissonance of arriving at a room with every light blazing, and then being asked to hang a towel up to save energy, can cause even the most mildly environmentally aware customers some heartburn. But worse, this weird in-room disconnect betrays a corporate, internal conflict as well.

I truly don't mean to pick on Westin; the entire hospitality industry is guilty of similar dissonance. For example, who decided that the now-common "turn down" service was a good thing? Even if everyone wants a nice chocolate on their pillow, does anybody really need to come back to a room with lights ablaze and flat screen TV running? Frankly, the first few times I encountered this bizarre hotel practice, it scared the heck out of me since I thought I was walking into the wrong room. Now I leave the "Do Not Disturb" sign up when I leave. But I digress.

My reaction at the Westin was not just me being an overly watchful green strategy guy. One of my clients at the regular (as in non-sustainability themed) event I was speaking at told me that having to turn off all the lights bothered her as well.

I'm not crying "greenwash" here -- this kind of disconnect is much more subtle. I believe that hotels are basically sincere about the "we care" sheet-and-towel cards around the room. The big hotel chains (Westin is owned by Starwood) have been making strides to reduce their footprints. They all have environmental advocates and executives now. But it seems likely that policies about how to greet customers (leave the lights on) come out of some other part of the company.

Because of that organizational disconnect, the hotel is forcing its customers to face two conflicting messages, one conservation-oriented and one theoretically welcoming, but blatantly wasteful. In the spirit of making my stay comfortable, they've chosen a path that forced me to do some work - going around to flip everything off - and annoyed me immediately. Compare this with hotel rooms all over Europe (and a growing number in the U.S., including the Encore/Wynn in Las Vegas of all places) that install master control switches near the door. These handy devices can turn everything in the room off at once or, in their best incarnations, require a hotel keycard to turn anything on.

My point is this: companies need to work these inconsistencies out internally and not make customers wade through them. The number of people who would find the dissonance disconcerting is certainly growing, so the risk of alienating customers is rising as well.

These kinds of inconsistencies are not exclusive to hotels; they crop up everywhere. Consider the rental car companies that automatically "upgrade" you to an SUV, when you've specifically asked for an economy or hybrid car.

But one example from the restaurant industry seems particularly egregious. This past Sunday, the New York Times Magazine ran a chilling article about bluefin tuna, a majestic species driven to near extinction by our ever-rising demand for sushi-grade meat. As part of its campaign to tackle the crisis, the author Paul Greenberg says, Greenpeace has pressured high-profile restauranteurs, particularly the owners and chef of the famous Nobu, to find substitutes. Nobu has continued serving the tuna and responded to the pressure by merely adding what Greenberg describes as a "haiku-esque warning on the menus of its London eateries" which reads:

"Bluefin tuna
Is an environmentally threatened species
Please ask your server for an alternative."

Nobu seems to be saying, "We sort of care about environmental issues and the death of a species our business depends on, but not really enough to do the work for you, our valued customer -- so please make the decision for yourself."

This attempt to "abdicate responsibility" to customers, as Greenpeace's Willie MacKenzie put it, is absurd. It will likely make those customers uncomfortable at best, and really tick them off at worst.

It's inevitable that as organizations navigate the complex world of sustainability, they will experience some internal cognitive dissonance about how they operate. Nobody said it was easy to balance the competing forces of (a) the inertia of how things have always been done, (b) the desire to meet the assumed needs of customers (for, say, welcoming, well-lit rooms), and (c) new pressures and questions about environmental and social performance.

But forcing your customers to confront these choices or, worse, making them do the work themselves, is not a good option.

(This post first appeared at Harvard Business Online.)

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