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PracticalESG

PracticalESG.com

Keeping you in-the-know on environmental, social and governance developments

You’ve convinced your company to develop a new product with a better sustainability profile than competing products, or modified an existing product in the same way. It went to market with high expectations, but it just isn’t selling as predicted.

Why?

Isn’t the world clamoring about climate change, water shortages, and waste management? Doesn’t everyone want more sustainable products?

Here are five possible reasons why things aren’t going as well as you expected:

  1. Public concern about greenwashing. No matter how transparent companies are in product sustainability messaging, the public has grown cynical of green claims. Product sustainability certifications may hurt more than help. It is all too easy to overload customers with data that – while accurate, valid and credible – overwhelms and befuddles them. It is difficult to find messaging and product labeling that balances data, storytelling and credibility.
  2. Prices are higher than competing products. In the current economic environment, consumers are moving from value-based purchasing to price-based. Inflation, tariffs, economic uncertainty, talk of recession and corporate job cuts weigh on the average US consumer. Whether your sustainable product price differential is due to a greenium or simply higher production costs, now may not be the right time for that.
  3. Sustainability isn’t a key buying criterion for customers even though it may be a corporate initiative driven by a variety of factors. Sustainability brings many internal benefits for companies but those aren’t inherently valuable beyond corporate borders. Do you know what your customers need and why they buy? Are product attributes other than sustainability more important to your buyers? Which leads us to the next point …
  4. Real life consumer behavior doesn’t always follow survey results. This has been well studied and documented by behavioral economists and many others. In addition, survey design can nudge respondents toward the outcome desired by the survey sponsor such that the results aren’t objective, representative or valid. Relying too much on surveys to predict future buying behavior is risky.
  5. The product may not be positioned or supported appropriately within the company. Is the product seen as an afterthought internally? Maybe it isn’t reasonably close to your core products/brand/reputation and is therefore not fully understood or appreciated. Sales staff could be falling back on what they know (existing/core products) rather than actively pushing the sustainable product. There may even be commission incentives for them to do so.

There are few easy solutions to these obstacles, but consider these starting points:

  1. Learn your customers’ views, priorities and needs related to their decision to buy your products. Don’t take the easy way out and use quick surveys – especially those designed with a predetermined answer in mind. Find out how sustainability actually relates to their buying decisions. You may need to change your product messaging – or maybe the product misses the mark altogether.
  2. Don’t expect consumers to pay more for sustainability attributes – at least not for now. In 24 months the world may be different, but this is not the right time to increase prices at the check out counter if you can avoid it.
  3. Get to the heart of how sales departments function – what their priorities are, how they approach customers, their appetite for learning new products and what incentives are in place. If sales staff aren’t fully on board with the product, it probably won’t move.

Our members can learn more about the business value of sustainability here.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile