The Elusive Green Consumer

Idea in Brief The Challenge Most consumers report positive attitudes toward eco-friendly products and services, but they often seem unwilling to pay for them. Insights from behavioral science can help close this gap. The Solution Consider five approaches: use social influence, shape good habits, leverage the domino effect, decide whether to talk to the heart or the brain, and favor experiences over ownership. The Result People’s desire to conform to the behavior of others—and the habits they develop over time—influence the likelihood that they will consume sustainable offerings. The good news is that sustainable choices often lead to further positive behavior. On the surface, there has seemingly never been a better time to launch a sustainable offering. Consumers—particularly Millennials—increasingly say they want brands that embrace purpose and sustainability. Indeed, one recent report revealed that certain categories of products with sustainability claims showed twice the growth of their traditional counterparts. Yet a frustrating paradox remains at the heart of green business: Few consumers who report positive attitudes toward eco-friendly products and services follow through with their wallets. In one recent survey 65% said they want to buy purpose-driven brands that advocate sustainability, yet only about 26% actually do so. Narrowing this “intention-action gap” is important not just for meeting corporate sustainability goals but also for the planet. Unilever estimates that almost 70% of its greenhouse gas footprint depends on which products customers choose and whether they use and dispose of them in a sustainable manner—for example, by conserving water and energy while doing the laundry or recycling containers properly after use. We have been studying how to encourage sustainable consumption for several years, performing our own experiments and reviewing research in marketing, economics, and psychology. The good news is that academics have learned a lot about how to align consumers’ behaviors with their stated preferences. Much of the research has focused on public interventions by policy makers—but the findings can be harnessed by any organization that wishes to nudge consumers toward sustainable purchasing and behavior. Synthesizing these insights, we have identified five actions for companies to consider: use social influence, shape good habits, leverage the domino effect, decide whether to talk to the heart or the brain, and favor experiences over ownership. Use Social Influence In 2010 the city of Calgary, Alberta, had a problem. It had recently rolled out a program called grasscycling, which involves residents’ leaving grass clippings to naturally decompose on a lawn after mowing, rather than bagging them to be taken to a landfill. The city had created an informational campaign about the program that highlighted its benefits: Grasscycling would return valuable nutrients to the soil, protect the lawn, and help the soil retain moisture. What’s more, this sustainable behavior actually required less work from the individual. But initial adoption rates were lower than the city had expected. One of us (White) advised Calgary to try to change residents’ behavior using “social norms”—informal understandings within a social group about what constitutes acceptable behavior. Scores of studies have shown that humans have a strong desire to fit in and will conform to the behavior of those around them. To leverage this motivation, White and her colleague Bonnie Simpson worked with the city on a large-scale field study in which messages were left on residents’ doors: “Your neighbors are grasscycling. You can too” and “Most people are finding ways to reduce the materials that are going to the landfill—you can contribute by grasscycling.” Within two weeks this simple intervention resulted in almost twice as much residential grasscycling as did the control condition. Harnessing the power of social influence is one of the most effective ways to elicit pro-environmental behaviors in consumption as well. Telling online shoppers that other people were buying eco-friendly products led to a 65% increase in making at least one sustainable purchase. Telling buffet diners that the norm was to not take too much at once (and that it was OK to return for seconds) decreased food waste by 20.5%. A major predictor of whether people will install solar panels is whether their close-by neighbors have done so. And, in perhaps the most dramatic finding, telling university students that other commuters were ditching their cars in favor of more-sustainable modes of transportation (such as cycling) led them to use sustainable transport five times as often as did those who were simply given information about alternatives. Sometimes social motivators can backfire, however. If only a few people are engaging in a sustainable behavior, it may appear to be not socially approved of, thus discouraging adoption. In such instances companies can enlist advocates to promote the positive elements of the product or action. Advocates are most compelling when they themselves have undertaken the behavior. One study found that when an advocate related why he or she had installed residential solar panels, 63% more people followed suit than when the advocate had not actually installed panels. Lloyd Miller Social norms may also turn off certain consumer segments. For example, some men associate sustainability with femininity, leading them to avoid sustainable options. But if a brand is already strongly associated with masculinity, this effect can be mitigated. Jack Daniel’s, for example, embeds sustainability in many aspects of its business. Taglines such as “With all due respect to progress, the world could use a little less plastic” (accompanied by a row of wooden barrels) and “Even Jack Daniel’s waste is too good to waste” link sustainability to quality and great taste. Because the company sells waste products and unused resources to other industries, it sends zero waste to landfills. And whiskey fans can buy used charcoal from the mellowing vats in the form of barbecue briquettes for grilling at home, reaffirming traditional masculine values. All this highlights the company’s support for the work ethic, the land and the air, and the community in which Jack Daniel’s operates. To avoid losing its standing as a rugged, masculine brand, it has expertly integrated sustainability into its existing branding. In another example, people who lean right on the political spectrum are sometimes less open to engaging in eco-friendly behaviors because they associate them with a liberal political ideology. In the United States, for example, Republicans were less likely to buy a compact fluorescent light bulb that they knew was more energy-efficient than an incandescent bulb when it was labeled “Protect the Environment” than when that label was missing. A solution is to make communications resonate with Republicans’ political identity—for example, by referencing duty, authority, and consistency with in-group norms. In one field study Republican residents recycled more after being told, “You can join the fight by recycling with those like you in your community. Your actions help us to do our civic duty because recycling is the responsible thing to do in our society. Because of people like you, we can follow the advice of important leaders by recycling. You CAN join the fight!” That appeal didn’t resonate in the same way with Democrats, who were more likely to respond to messaging around social welfare. Another solution is to focus on values that everyone shares, such as family, community, prosperity, and security. Consumers often have negative associations with sustainable product options, viewing them as being of lower quality, less aesthetically pleasing, and more expensive. In one example, when people valued strength in a product—a car cleaner, say—they were less likely to choose sustainable options. One way to offset such negative associations is to highlight the product’s positively viewed attributes—such as innovativeness, novelty, and safety. For example, Tesla focuses on the innovative design and functional performance of its cars more than on their green credentials—a message that resonates with its target market. This also helps overcome the concern of some men that green products are feminine. Read more about Growing Green Social influence can be turbocharged in three ways. The first is by simply making sustainable behaviors more evident to others. In some of Katherine White’s research, people were asked to choose between an eco-friendly granola bar (which had the tagline “Good for you and the environment”) and a traditional granola bar (“A healthy, tasty snack”). The sustainable option was twice as likely to be chosen when others were present than when the choice was made in private. Other researchers have found similar effects with products ranging from eco-friendly hand sanitizers to high-efficiency automobiles. The city of Halifax, Nova Scotia, found that when residents were required to put their household waste in clear bags, thus making the contents of their trash (which often included items that should have been recycled or composted) visible to the neighbors, the amount of garbage that went to the landfill decreased by 31%. People are influenced to install solar panels by near neighbors who have done so. A second way to increase the impact of social influence is to make people’s commitments to eco-friendly behavior public. For example, asking hotel guests to signal that they agree to reuse towels by hanging a card on their room door increased towel reuse by 20%. In a similar study, asking hotel guests to wear a pin symbolizing their commitment to participating in an energy-conservation program increased towel reuse by 40%. And a study aimed at reducing vehicle idle time when children were being picked up at school asked some parents to display a window sticker reading “For Our Air: I Turn My Engine Off When Parked.” The intervention resulted in a 73% decrease in idling time. A third approach is to use healthy competition between social groups. In one example, communicating that another group of students was behaving in a positively viewed way (“We are trying to encourage students to compost…. Recently, a survey…found that Computing Science students are the most effective in composting efforts when compared across the student groups”) made business students more than twice as likely to compost their biodegradable coffee cups. When the World Wildlife Fund and its partner volunteer organizations wanted to raise awareness about sustainable actions for Earth Hour, a global lights-off event, they spearheaded friendly energy-saving competitions between cities. The program has spread through social diffusion: It began in Sydney, Australia, in 2007 and now reaches 188 countries, with 3.5 billion social media mentions from January to March 2018 and lights switched off at almost 18,000 landmarks during Earth Hour 2018. Shape Good Habits Humans are creatures of habit. Many behaviors, such as how we commute to work, what we buy, what we eat, and how we dispose of products and packaging, are part of our regular routines. Often the key to spreading sustainable consumer behaviors is to first break bad habits and then encourage good ones. Habits are triggered by cues found in familiar contexts. For example, using disposable coffee cups (a habit repeated a staggering 500 billion times a year across the globe) may be a response to cues, such as the default cup provided by the barista and a trash bin illustrated with a picture of a cup, both common in coffee shops. Companies can use design features to eliminate negative habits and substitute positive ones. The simplest and probably most effective approach is to make sustainable behavior the default option. For example, researchers in Germany discovered that when green electricity was set as the default option in residential buildings, 94% of individuals stuck with it. In other cases, making green options—such as reusing towels or receiving electronic rather than paper bank statements—the default increased uptake of the more sustainable option. In full-service restaurants in California, drinks no longer come with plastic straws; customers must explicitly request one. Another strategy is to make the desired action easier—by, for example, placing recycling bins nearby, requiring less complex sorting of recyclables, or providing free travel cards for public transport. Three subtle techniques can help shape positive habits: using prompts, providing feedback, and offering incentives. Prompts might be text messages reminding people to engage in desired behaviors, such as cycling, jogging, or commuting in some other eco-friendly way to work. Prompts work best when they are easy to understand and received where the behavior will take place, and when people are motivated to engage in the behavior. In one study just placing prompts near recycling bins increased recycling by 54%. Feedback sometimes tells people how they performed alone and sometimes compares their performance to that of others. Household energy bills that show how consumers’ usage compares with that of neighbors can encourage energy saving. If the behavior is repeatedly performed—driving a car in varying traffic conditions, for example—real-time feedback like what the Toyota Prius offers drivers about their gas mileage can be effective. Adopting a sustainable behavior makes people apt to make other positive changes. Incentives can take any number of forms. In the UK, Coca-Cola has partnered with Merlin Entertainments to offer “reverse vending machines” from which consumers receive half-price entry tickets to theme parks when they recycle their plastic drink bottles. Incentives should be used with care, because if they are removed, the desired behavior may disappear too. Another concern is that they may undermine consumers’ intrinsic desire to adopt a behavior. In a study in the Journal of Consumer Psychology, “Are Two Reasons Better Than One?,” researchers found that combining external incentives (“Save money!”) with intrinsic motives (“Save the environment!”) resulted in less preference for a sustainable product than did intrinsic appeals alone. The authors hypothesized that this occurred because an external motivation can “crowd out” an intrinsic desire. Even using these tactics, it is almost always difficult to break habits. But major life changes—such as moving to a new neighborhood, starting a new job, or acquiring a new group of friends—may create an exception, because such changes make people more likely to consciously evaluate and experiment with their routines. One study examined 800 households, half of which had recently moved. Half the participants in each group (half the movers and half the nonmovers) were given an intervention consisting of an interview, a selection of eco-friendly items, and information about sustainability. The movers were significantly more likely than the nonmovers to engage in environmentally friendly behaviors after the intervention. Leverage the Domino Effect One of the benefits of encouraging consumers to form desirable habits is that it can create positive spillover: People like to be consistent, so if they adopt one sustainable behavior, they are often apt to make other positive changes in the future. After IKEA launched a sustainability initiative called Live Lagom (lagom means “the right amount” in Swedish), it studied the sustainability journey in depth among a core group of its customers. The company found that although people may begin with a single step—such as reducing household food waste—they often move on to act in other domains, such as energy conservation. IKEA observed a snowball effect as well: People would begin with small actions and build to more meaningful ones. For example, buying LED light bulbs might lead to wearing warmer clothing and turning down the thermostat, changing curtains and blinds to decrease heat loss, insulating doors and windows, buying energy-efficient appliances, installing a programmable thermostat, and so on. It is important to remember that negative spillover can occur too: A sustainable action may lead someone to subsequently behave less sustainably. Termed licensing by researchers, this occurs when a consumer feels that an initial ethical action confers permission to behave less virtuously in the future. In one example, researchers found that people who had performed a virtual green shopping task were less likely to behave prosocially (in a game they were less likely to help others by allocating resources) than those who had performed a virtual conventional shopping task. In other examples, people use more paper when they can show that they are recycling and use more of a product (such as mouthwash, glass cleaner, or hand sanitizer) when it is a sustainable one. Similarly, car models with increased fuel efficiency may lead people to drive more miles, and more-efficient home heating and cooling systems may lead them to increase usage. Hope and pride can be particularly useful in driving sustainable consumption. Companies can take steps to lessen the risk of negative spillover. They can ensure that the first sustainable action is particularly effortful, which seems to build commitment. When consumers are asked to make smaller commitments, it is best not to publicize those actions, because that may lead to something researchers call slacktivism. In one study, participants who had engaged in token support for a cause that demonstrated to others that they were “good people”—such as joining a “public” Facebook group or signing an online petition—were less likely to engage in a private task later, such as volunteering for the cause. However, those who privately joined a Facebook group or signed a petition were more likely to see the cause as reflecting their true values and to follow through. Note that this differs from the earlier example of giving pins to hotel guests who choose energy-efficient options, because in that study wearing a pin was explicitly tied to a commitment to perform a sustainable action. Someone who sees a token initial behavior as engagement in a cause often performs fewer positive actions in the future. Decide Whether to Talk to the Heart or the Brain How companies communicate with consumers has an enormous influence on the adoption of sustainable behaviors. When getting ready to launch or promote a product or a campaign, marketers often have a choice between emotional levers and rational arguments. Either can be effective—but only if certain conditions are met. The emotional appeal. People are more likely to engage in a behavior when they derive positive feelings from doing so. This core precept is often overlooked when it comes to sustainability, for which ad campaigns are likely to emphasize disturbing warnings. Research has found that hope and pride are particularly useful in driving sustainable consumption. Bacardi and Lonely Whale cultivate hope in their collaboration to eliminate one billion single-use plastic straws, and they use the hashtag #thefuturedoesntsuck to promote events and call for consumer action. And when people in one study were publicly praised each week for their energy-efficiency efforts, thus engendering pride, they saved more energy than a group that was given small (up to €5) weekly financial rewards. Lloyd Miller Guilt is a more complicated emotional tool. Research by White and colleagues suggests that it can be an effective motivator but should be used carefully. In one experiment, when accountability was subtly highlighted (participants were asked to make a product choice in a public setting), consumers reported anticipating future guilt if they failed to shop for green products, and 84% chose fair trade options. However, when an explicit guilt appeal was used (“How can you enjoy a cup of tea knowing that the people who produce it are not being treated fairly?”), they became angry, upset, or irritable, and only 40% chose the fair trade option. Indeed, an abundance of other research confirms that activating moderate amounts of guilt, sadness, or fear is more effective than trying to elicit a strong reaction. This research suggests that charity or cause appeals that use particularly emotive images (such as explicit images of suffering children) may not be as effective as less heavy-handed ones. The rational appeal. In 2010 Unilever launched a campaign to draw attention to the fact that although some palm oil harvesting leads to rain forest destruction, its palm oil is all sustainably farmed. Printed on a photo of a rain forest was the tagline “What you buy at the supermarket can change the world…. Small actions, big difference.” The company was leveraging decades-old research findings that people are unlikely to undertake a behavior unless they have a sense of what researchers call self-efficacy—confidence that their actions will have a meaningful impact. Thus one key to marketing a sustainable product is communicating what effect its use will have on the environment. Although information about sustainable behaviors and their outcomes can be persuasive, how the information is framed is critical, especially for products with high up-front costs and delayed benefits. Recent research by one of us (Hardisty) found that consumers who are buying appliances or electronics typically don’t think about energy efficiency—and even if they do, they don’t care as much about future energy saving as about the up-front price. However, in a field study at a chain of drugstores, labeling the “10-year dollar cost” of energy for each product increased energy-efficient purchases from 12% to 48%. Such labels are effective for three reasons: They make the future consequences more salient, they frame the information in dollars (which consumers care about) rather than energy saving (which they often don’t), and they scale up energy costs tenfold. Indeed, people’s tendency to prefer avoiding losses over making equivalent gains—what psychologists call loss aversion—can help marketers frame choices by communicating what’s at stake. For instance, photos showing how glaciers have receded can be a powerful means of conveying environmental losses associated with climate change. White and her colleagues Rhiannon MacDonnell and Darren Dahl found that in the context of residential recycling, a loss-framed message (“Think about what will be lost in our community if we don’t keep recycling”) works best when it’s combined with specific details about the behavior, such as when to put out the recycling cart, what materials are recyclable, and so forth. That’s because people in a loss-framed mindset tend to want concrete ways to deal with a problem. Five Routes to Sustainable Behavior A variety of approaches can positively affect consumers’ product and service choices. Use social influence Link the desired behavior to relevant social norms. Show that others are engaging in the behavior. Make the behavior public. Create positive associations with the behavior. Foster healthy competition between social groups. Shape good habits Make sustainable behavior the default. Use prompts and feedback to create positive habits. Use incentives appropriately. Introduce sustainable behaviors during major life changes. Leverage the domino effect Make the first sustainable action particularly effortful. Encourage meaningful commitments to behavior change. Don’t allow consumers to signal that they are “good people” with an initial token act. Decide whether to talk to the heart or the brain Tap into feelings of hope and pride. Subtly activate feelings of guilt. Frame messages in terms of what can be lost. Offer concrete information and reference local impacts. Encourage experiences over ownership Consider business models that offer experiences rather than material goods. Think about how to repurpose your products when the consumer is finished with them. In addition, messages that focus on local impacts and local reference points are particularly powerful. That’s why New York City’s recent waste-reduction advertising campaign illustrated that all the garbage thrown out in the city on one day could fill the Empire State Building. Messages that communicate the concrete effects of sustainable consumer behavior change in other ways can also be effective. Tide encourages consumers to take the #CleanPledge and wash their clothes in cold water. Not only is this a consumer commitment, but the campaign communicates clear consequences, such as “Switching to cold water for one year can save enough energy to charge your phone for a lifetime.” Another tactic is giving consumers something tangible to display their support of a brand or a cause and reporting clear outcomes. For example, 4ocean lets consumers know that for every upcycled bracelet they buy from the company, one pound of trash will be removed from the ocean. Favor Experiences Over Ownership Along with working to change consumer behavior, some companies have found success with business models that seemingly make consumers more open to green alternatives. In the “experience economy,” companies offer experiential options as an alternative to material goods. For example, Honeyfund allows wedding gift givers to bypass cookie-cutter registries filled with typical household goods and instead contribute to destination honeymoons, gourmet dinners, and other adventures for the bride and groom. Tinggly, whose tagline is “Give stories, not stuff,” also lets consumers buy adventures rather than tangible products as gifts. In addition to the potential sustainability benefit, research shows, giving an experience makes both giver and receiver happier, leads to stronger personal connections, and cultivates more-positive memories. The sharing economy is enjoying similar success. Indeed, some of the leading growth models in recent years have involved businesses that neither develop nor sell new products or services but instead facilitate access to existing ones—which often means a much smaller environmental footprint. Businesses have sprung up to offer sharing and borrowing for everything from clothing and accessories (Rent the Runway and Bag Borrow or Steal) to vehicles (Zipcar and car2go), vacation rentals (Airbnb), and even on-demand tractors in Africa (Hello Tractor). However, sharing services can lead consumers to choose the easy-to-access option (such as an Uber or Lyft ride) rather than a more sustainable one, such as walking, biking, or taking public transport. Thus it’s worth carefully considering what impact the service a company offers will have on consumers’ ultimate behavior. Lyft has responded to this concern by committing to offset its operations globally, “through the direct funding of emission mitigation efforts, including the reduction of emissions in the automotive manufacturing process, renewable energy programs, forestry projects, and the capture of emissions from landfills,” resulting in carbon-neutral rides for all. Elements of sustainability can be built into the use and disposal of products. Other companies have won customers over by offering to recycle products after use. Both Eileen Fisher and Patagonia encourage customers to buy high-quality pieces of their clothing, wear them as long as possible, and then return them to the company to be refurbished and resold. Thus one way to encourage eco-friendly consumer behavior is to build elements of sustainability into how products are used and ultimately disposed of. Making Sustainability Resonate Despite the growing momentum behind sustainable business practices, companies still strive to communicate their brands’ sustainability to consumers in ways that heighten brand relevance, increase market share, and fuel a shift toward a culture of sustainable living. We have offered a menu of tools—informed by behavioral science—that can help. We recommend that companies work to understand the wants and needs of their target market, along with the barriers and benefits to realizing behavioral change, and tailor their strategies accordingly. We also recommend pilot A/B testing to determine which tactics work best. Using marketing fundamentals to connect consumers with a brand’s purpose, showing benefits over and above conventional options, and making sustainability irresistible are central challenges for businesses in the coming decades. As more and more succeed, sustainable business will become smart business.

The Elusive Green Consumer

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