Hive - Sustainability Communications & Ideas

1. Acquisition: Consumers are increasingly choosing green alternatives to existing generic products, so there is a market opportunity. You could acquire more customers and gain market share.
    
2. Retention: Environmental considerations can affect decisions to repurchase too so sustainability messages can also enhance customer retention.
    
3. Competitive threat: Your competitors may well be developing, or have already developed, green products, so there is a potential competitive threat to your existing market share.
    
4. Risk management: Consumers expect brands to behave in certain ways, so even if you haven’t made specific claims, your customers may have expectations for your operational delivery based on assumptions about your brand values.
    
5. Investor expectations: Investors are increasingly looking towards triple bottom line performance i.e. social and environmental impacts as well as financial.
    
6. Staff engagement: Companies with a positive approach to sustainability report corresponding improvements in staff morale. Working both to attract employees and retain them more effectively.
    

Sustainability is now firmly on the agenda for many companies, their Boards and indeed their staff. At the very least there are legal compliance requirements – and that’s set to increase, but also it makes good business sense too: save energy, reduce waste management costs and limit your demand on water to give just three examples.

We’re not going to try to make the case for becoming more sustainable here, but if you haven’t yet got started try our footprint section to find some organisations who can help.

1. Acquisition: Gain market share

Consumer choice is increasingly influenced by environmental considerations.

• 38% of people have positively chosen a brand because of its environmental practices¹
• 75% of people feel pressure to change the way they live to reduce the impact of climate change²
• 58% of people respect brands that promote what they are doing for the enivironment³
• 25% of people think that individuals are most responsible for tackling climate change³

Market data shows there is strong growth in green and ethical products and that this has been sustained over a period of time – so much so that this sector is now estimated to be worth £32.3billion. ⁴

The Growth in Ethical Consumption

Growth for green and ethical products has been three times the rate of expenditure on household goods in recent years. Spend on ethical products doubled in the period 2002 - 2006 to £684 per household.

The chart below shows high levels of year on year growth in almost every sector.

There is also growth in products that reflect greener behaviours, that are not included here. For example the recent increase in clothes pegs and washing line sales, and increased use of some modes of public transport, are thought to be associated with shifts towards more sustainable lifestyles.

Whilst there are now many green advertising messages in the marketplace, it seems that there is still an opportunity to dominate in this territory. A recent survey¹ found that 69% of people could not name a brand taking a lead in tackling climate change.

2. Retention: Understand the ‘greeness’ of your base

As your existing customers start to live in a more sustainable way, offering sustainability as a business attribute will become a factor in customer retention. As a retention marketer, the big question you need to answer is ‘how green is your customer base and how likely are they to be motivated by environmental issues?’ There are a number of insight sources you could use to answer this question:

(a) Start with what you have in house – have you any existing research work that has touched on the issue? Could you include questions about sustainability in your current CSQs ? Are you about to commission new research that you could use to generate eco insights?

(b) Industry research/segmentation – there are a number of research reports and segmentation studies that may help to understand the general greenness of the UK population. See our Research section. These will only give you general insights, but may be helpful in preparing for something more bespoke.
 

(c) Green profiling – the Hive Green Segmentation Tool enables you to directly assess the greenness of your customer base using a simple email/online survey. You can then compare your green segment splits with that of the UK population – do you have more customers in the greener groups, or less? See Segmentation for more details.

(d) TGI can provide some insights through the questions it asks relating to the environment and it’s useful in the way this can be linked to brand and media consumption:

i. There Is Too Much Concern With The Environment
ii. Prepared To Pay More For Environmentally Friendly Prods
iii. Never Buy Toiletries/ Cosmetics Tested On Animals
iv. People Have A Duty To Recycle Products
v. Worried About Pollution/ Congestion Caused By Car
vi. The Ban On Smoking In Public Places Is A Good Idea (+10/06)

However, it’s fair to say with only limited questions on the environment currently it has its limitations.

(e) Use an Omnibus survey to ask questions about the green behaviour of consumers. Just be aware that, as with TGI, basing your assessment on just 5 or 6 questions could conceal the many complexities that exist in this space.

3. Defending a competitive threat

Your competitors may well be developing, or have already developed, green products, so there is a new competitive threat to market share. Every business sector has a potential sustainability story to tell. All of the products in the diagram below have run advertising that promotes their sustainability credentials.

The upside is that this creates new opportunities for your brand. But the downside is that your competitors may see the gap too, creating even more of a squeeze on market share. As this is neither a niche or temporary trend, it may prove best to expect developments. The best defence against which may be the advantage of making the first move.

4. Risk management

The great thing about strong brand values is that customers extrapolate and attribute positive associations to the brand. But that is also a curse. Sustainability is such a pervasive and popular trend now that customers don’t always stop to ask questions about a brand’s operations, they just assume they’re good and in line with the other positive associations they may have about a brand. These assumptions aren’t necessarily rational, so tough though it may be, it’s not enough to think that if a brand hasn’t communicated a positive stance, that consumers won’t have expectations – they will. And as the 380% year on year rise in complaints to the ASA demonstrates, they’re not keeping their thoughts to themselves.

5. Investor Expectation

The success of companies is no longer based solely on their economic performance. The best run organisations, large and small, are now looking beyond their effective and responsible use of financial resources, to those concerning the environment (air quality, water quality, energy use, waste management) and social impacts (labour practices, community impacts, human rights and product responsibility). This has become know as Triple Bottom Line accounting. Already they have shown how they can reap environmental and social rewards along with the financial ones.

Toyota develops the hybrid engine and the Prius becomes the world's fastest-selling car. Pepsico move to more sustainable production methods and at the same time make significant savings on energy and water costs. General Electric's wind energy business quadrupled in revenue since it was acquired from Enron.

The Triple Bottom Line by Andrew Savitz (it’s available on loan from our library).

6. Attract and retain staff

A company with a positive approach to sustainability is a positive attribute for staff. It acts to both attract employees and retain them more effectively.

Pureprint Group have done research showing:

• 79% staff satisfaction score in their 2007 satisfaction survey
• 43% of staff attracted to the company because of its social responsibility
• 52% of the Group's employees have changed their approach to the environment as a result of working at Pureprint

There are direct financial benefits that can be associated with staff retention (money saved on recruitment fees and training costs) but also benefits that are less tangible (staff are more motivated and believe in the company’s endeavours).

Sources

1. The Climate Group – Consumers, Brands and Climate Change Report, October 2007
2. Energy Saving Trust Green Barometer, April 2007
3. Hive Segmentation Research, April 2008
4. The Ethical Consumerism Report 2007, The CoOperative Bank
5. The Triple Bottom Line by Andrew Savitz