As humanity begins to feel the impacts of climate change and warnings from scientists grow more dire, companies are faced with a new challenge: putting sustainability at the center of their business and reaching greater numbers of consumers who want to make sustainable choices. Three partners with Boston Consulting Group (BCG), Kanika Sanghi, Aparna Bharadwaj, and Lauren Taylor, recently shared their strategies for growing sustainability-focused customers with Fortune.
The good news for businesses is that up to 80% of consumers say they already consider sustainability in their purchasing decisions, according to a 2022 survey by BCG; but only 1% to 7% report their willingness to pay a premium for more sustainable and environmentally friendly goods and services. Many companies are focusing on the smaller group, and failing to reach the far greater proportion of consumers who might be persuaded to make more sustainable choices.
The trio of BCG partners recommend that companies develop a greater understanding of the “funnel” of consumer views toward sustainability, focusing on different strategies for different segments of the market. For example, 49% to 80% of consumers report being concerned with climate and sustainability, with the greatest concern among consumers in the vehicle and electricity-provider categories. Up to 60% of consumers say they are adopting more sustainable behaviors, especially in electricity provision, home care, and dining out. Up to 18% of consumers report acting on their concerns by making sustainable purchases, with the highest percentages to be found in the dining out and home care categories.
While businesses have traditionally looked at the “bottom of the funnel,” where 1% to 7% of consumers are willing to pay a premium for sustainable goods and services, the BCG partners recommend looking beyond that group and using specific strategies to reach the broader audience of people who want change and are willing to act to achieve it.
Chief Marketing Officers (CMOs) will play a key role in reaching this larger consumer base by leveraging a deep understanding of consumers and the core needs that drive their purchasing decisions to break the barriers that cause hesitation to purchase sustainable products. They can also broaden the dialogue around sustainable products and services to touch upon related needs and drive purchases of sustainable products even when sustainability is not a primary motivator. In addition to tailoring products and marketing to consumer needs and motivations, CMOs and their teams can serve as internal advocates, sharing their view of the core market with other teams and speaking to that core market in direct and personalized ways.
With environmental concerns motivating a growing number of people to prefer sustainable products and services, companies would do well to focus on more than the small proportion of consumers willing to pay a premium, and learn to speak to the needs of a much larger market.