Back to Basics for Tackling Consumption—With a Twist

November 2, 2010
  • Linda Hwang

    Former Manager, Research, BSR

All of us buy, use, and dispose of a wide variety of products every day. Some products we buy out of habit, and others are purchased only after extensive deliberation. Some of our purchases are made daily—like grabbing that double shot of espresso at 3 p.m.—while others occur only once a year or once in a lifetime. What this means is that consumers’ decision-making varies tremendously depending on the context. For companies, recognizing the unique contexts in which people make purchasing decisions can increase the likelihood of affecting those decisions, and ultimately steering people toward more sustainable choices.

Today’s consumption patterns are approaching a point of diminishing returns. We are becoming less well-off per unit of output by many different measures, and facing more problems instead: obesity instead of good health, congestion instead of mobility, time deficits instead of leisure, social fracture rather than cohesion, and environmental degradation rather than improvement.

While the trends are troubling, the challenges posed by these consumption patterns also present business opportunities. When companies can impact individuals’ purchasing decisions, they have the opportunity to enable and encourage people to use products more efficiently and choose products that are built to last. And by fostering demand for such products, companies create the economic conditions to make such business models viable.

In order to advance sustainable consumption patterns, companies need strategies that focus on driving the decision process people use when they’re choosing what to buy. To do this, companies need to understand people’s needs and the context in which they’re making decisions.

Marketing 101

To this end, there is a lot of consumer research focused on understanding what drives environmentally friendly behavior—from what motivates households to buy organic to why people opt for public transportation. Yet an interesting finding from this research is often overlooked: The primary factor in consumers’ decisions to make “sustainable” choices may not be to save the environment. What this means is that environmentally friendly consumption patterns may not be a good proxy for companies to understand how they can augment or stimulate people to make sustainable choices. In the quest for understanding what drives specific, eco-friendly behavior, we may have inadvertently been missing the forest for the trees.

Whether people are thinking about buying hamburger patties, a laptop, or taking an “eco-vacation” to an island in the South Pacific, they are increasingly aware of the environmental impacts of their purchasing decisions. However, individuals are usually focused on other needs when they’re making their choices. In general, people are thinking about style, price, value, function, and increasingly the opinions and/or recommendations from those they know. They’re asking, “What’s best for me?” or maybe “What’s best for my family?” Thus, companies should focus on what’s driving behavior in the first place in order to eventually change that behavior.

More and more research pointing to the ineffectiveness of “eco-labels” reinforces this approach. Messages that highlight the environmental attributes of products per se are less likely to resonate with people who are basing their purchases on benefits other than environmental or human rights protection. These are lost opportunities to steer individuals toward products that are more environmentally and socially friendly. In the language of marketing, it’s about focusing on people’s “desired end state” and their motivation.

Cultivating Trust

Cultivating consumer trust is about building high-quality connections with individuals—and not just to determine how much they’re willing to pay for an organic cotton shirt or clean air. These connections can help companies understand what people are thinking about, where they get their information, and how they interact with others and their reasons for doing so. The combination of brand loyalty and a strong understanding of what drives purchasing decisions gives companies the opening to steer their customers toward sustainable products. When brand loyalty is established, companies have more room to focus on improving the environmental and social practices of their production processes.

The rise of social media has reinforced the importance of trust and credibility, especially when it comes to the relationship between people and brands. At the same time, social media is also in danger of distorting the notion of trust. The emphasis on volume—the number of friends and followers—isn’t necessarily an indicator of trust or influence. Most people’s decisions are shaped by word-of-mouth input, whether online or offline, from a tight circle of close friends and relatives. Companies who want to maximize their engagements should focus on the quality of social network connections rather than their sheer size. The openness of the dialogue, the quality of the comments, and the responsiveness of the author may be far more effective at inspiring trust than the volume of content or number of overall fans and followers. Once a strong relationship is established, companies can continue to focus on driving innovation in their product and service offerings.

The (New) Context of Decision-Making

As noted earlier, the decision process is a combination of both the drivers of those decisions and the context in which they are made. Context here refers to the effort involved in making a decision and the social versus individual orientation of the decision-making process. Information and communications technology has fundamentally altered the context in which people make purchasing decisions. Marketers have always known that people make decisions in a series of steps, which includes searching for information and evaluating alternatives. Today, the ubiquity of mobile devices and information affects both the delivery and availability of information, and the way people make decisions on what to buy, where to go, and how to get there.

A recent research report on how U.S. shoppers use their mobile phones found that nearly one-third of consumers are using their phones to locate a nearby store to find a specific product. Once in the store, 21 percent are using their phones to look up product information and 14 percent are using them to compare prices. This suggests that retailers should develop mobile presences that guide people in their decision-making processes and make information easily accessible. This shift in consumer behavior highlights the need for companies to consider how this affects their delivery of products and services, the type of information they can provide on these mobile platforms, and whether their website is optimized for the mobile web.

In situations where a purchasing decision involves a lot of uncertainty about products, more and more people are relying on information from other consumers’ purchase decisions in order to simplify their own tasks. Here again the potential for social media to boost word-of-mouth input from others should not be overlooked. From this perspective, every high-quality contact a company makes with one individual can lead to many new “conversions” to the brand.

Marketing Sustainable Consumption

Tackling the challenge of consumption will require more than just going back to marketing basics and engaging consumers to understand how to change their behaviors. The transformation of consumer behavior toward sustainable consumption begins with what companies actually do. In some ways, communication and engagement is the last thing to think about. What companies produce, how they operate, the essence of their business, and their brand is the foundation on which companies can build a movement.

To explore more of BSR's work on the topic of sustainable consumption, see the most recent issue of the BSR Review and download a copy of our report "The New Frontier in Sustainability: The Business Opportunity in Tackling Sustainable Consumption."

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