Archive for the ‘Sustainability’ Category
Marketing in a world of eco-intelligent consumers
Many marketers don’t feel obligated to know or otherwise take responsibility for the entire environmental and social story of the products they help develop, promote and sell. If they’re not careful, their customers may know the full story before they do, leaving them with a potential sales and reputation mess to clean up.
Daniel Goleman, author of the popular book “Emotional Intelligence,” explains the growing empowerment of eco- or social-minded shoppers in his new book “Ecological Intelligence: How Knowing the Impact of What We Buy Can Change Everything.” Goleman says consumers face an information gap that prevents them from easily knowing and comparing the personal, social and environmental health impacts of individual products they are considering for purchase. That gap, however, is closing, thanks to the emergence of new mobile and point-of-purchase information technology that makes it easier to access the accumulating ecological and social data and ratings of individual products.
The hope and the promise Goleman sees for these new forms of IT is “radical transparency.”
Ecological transparency becomes radical when its analysis encompasses the entire life cycle of a product and the full range of its consequences at every stage, and presents that information to a buyer in ways that demand little effort…Radical transparency means tracking every substantial impact of an item from manufacturing to disposal—not just its carbon footprint and other environmental costs but its biological risks, as well as its consequences for those who labored to make it—and summarizing those impacts for shoppers as they are deciding what to purchase.
Goleman credits the company GoodGuide for its pioneering efforts to equip the shopping public with “comprehensive and rigorous information at the point of purchase.” GoodGuide’s technology platform is still in beta form, but it shows potential for dramatically tilting the information playing field in the direction of the consumer. According to Goleman:
GoodGuide surfaces a product’s backstory. It can calculate the specific environmental impacts during manufacture, transport, use, and disposal. It can perform this calculation down to a single chemical among a batch of ingredients. On a macro level, it can rate how well a given company stacks up against others in its field on environmental, health, or social performance, as well as determine which brand or company has been getting better over time. GoodGuide can evaluate a company’s policies, its disclosure of key information on products, and ultimately a company’s impacts on consumers, workers, communities, and the environment.
And now GoodGuide offers a free iPhone app that provides mobile access to data on more than 70,000 products, according to its website. Goleman says GoodGuide has harnessed decades of industrial ecology research to provide precise metrics of various processes and products. Perhaps most significantly from a marketing standpoint, “GoodGuide cuts through greenwashing to the underlying facts,” Goleman says.
Although GoodGuide remains at beta stage, Goleman says the tool is nonetheless “a concrete example of how radical transparency might work” in the aisles of shoppers’ favorite stores. It may be a Microsoft or a Google that ultimately provides the transparency system that is most widely accepted. In any case, Goleman sounds confident it won’t be long before consumers have fast, convenient access to information that helps them align their purchases with their values at the place and time they’re ready to buy. I share his confidence.
For marketers, the takeaway is this: Your customers will eventually have all the credible facts they need to decide whether your company or product satisfies their health and sustainability values and how you compare to your competitors. At that point, you’ll have little choice but to ensure the stories you tell about your company and products square with the facts your customers will have at their fingertips. Do you know your products’ “environmental impacts during manufacture, transport, use, and disposal” down to a single chemical used in its ingredients? And how about the labor and trade conditions up and down your supply chain? It’s only a matter of time before not knowing or not caring to know that information will come back to bite the offending company either in lost sales or in damaged image.
The “radical transparency” Goleman describes won’t appear overnight and it may never be fully realized in the market nor embraced by the consumer, but the information trends are clearly working in favor of the customer, whether a business or an individual. One of the trend drivers is demographics. In an interview last month with public television’s Bill Moyers, Goleman said he believes the younger generations have the greatest motivation to preserve the world and their ever-expanding use of social media will accelerate the sharing of consumer knowledge. This, he says, will create a shift “that will make it not only feasible for companies, but actually essential for companies to do the right thing.”
Smart marketers will get ahead of the trend and make radical transparency their competitive advantage.
Update: As I was about to publish this post I came across Joel Makower’s review on June 17 of Goleman’s book. He isn’t nearly as optimistic as Goleman about the transformative potential of radical transparency, for either consumers or producers. “I can’t argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold,” Makower writes. Goleman responds to Makower here. He says, “I don’t believe the last 20 years offer apt data points for projecting the next 20. It’s the future I’m talking about, not the past.” I’d suggest you read the book and decide for yourself.
Update: Daniel Goleman references my post in a piece he wrote for Harvard Business here.
Starbucks or McCoffee? No thanks
Starbucks is spending big ad bucks to gain the upper hand in its coffee confrontation with McDonald’s McCafe. What’s important to me about this duel is the false — and ultimately unsustainable — choice this campaign sets up. (UPDATE: McDonald’s announces huge promotional blitz for McCafe.)
According to Ad Age:
The high-end coffee retailer is breaking a series of long form, full-page newspaper ads Sunday (May 3), designed to tell the brand’s “story” while warning consumers about the dangers of trading down. It’s all part of its effort to combat consumer perception about its prices and separate itself from McDonald’s expected mass-market assault for its McCafe launch. Starbucks’ print ads, designed on burlap-sack backgrounds, have headlines such as “It’s not what you’re buying, it’s what you’re buying into.” The ads lay out what separates Starbucks from the competition, such as its practice of buying fair-trade beans and providing health care for employees who work more than 20 hours a week.
Living in Portland, Ore., I can tell you that Starbucks doesn’t separate itself from the competition on the basis of fair-trade, health care or other laudatory practices. That is, if you consider Starbucks’ competition to also include the locally owned, independent coffee merchants and cafes, which we in Portland enjoy throughout our great city.
In the battle of national, publicly owned retail chains, mom & pop’s and larger independents are a complete after-thought. And yet they are the ones who suffer most, along with the communities that are so much better off for having them around. Think Wal-Mart and its devastating impact on local economies and small local businesses as it tries to mow down big-box competitors like Target. The loss of the local independents are simply collateral damage in the national and global business wars.
Assuming I had no other options, I would choose Starbucks over McDonald’s because it’s a more socially and environmentally responsible corporation. That’s what Starbucks wants to hear. What they don’t want to hear is that I actually have dozens of great coffee options and none of them involve McDonald’s or Starbucks. My choices are local and they’re sustainable. I don’t care to choose between who’s less bad. I want to support the business owners who genuinely care about my community because this is their community, too. Large publicly traded corporations ruled by the financial bottom line are “dead ends,” as one socially responsible investment advisor I know asserts. Starbucks may be more responsible than McDonald’s, but that doesn’t make them sustainable.
To borrow the Starbucks advertising punch line, what I’m “buying into” is local.
Time to retire ‘green marketing’
With Earth Day 2009 behind us, I have a suggestion: Let’s acknowledge “green marketing” has outlived its usefulness and put our energy into redefining marketing itself.
Green marketing had a good run. It has responded to the rising green demands of customers. And it’s helped raise the environmental conscience of many others. Unfortunately, marketing as it’s most widely practiced remains the fuel for unsustainable consumption. And green marketing doesn’t go nearly far enough to change that.
The American Marketing Association (AMA) defines green marketing three ways:
- (retailing definition) The marketing of products that are presumed to be environmentally safe.
- (social marketing definition) The development and marketing of products designed to minimize negative effects on the physical environment or to improve its quality.
- (environments definition) The efforts by organizations to produce, promote, package, and reclaim products in a manner that is sensitive or responsive to ecological concerns.
I added the emphasis to products to underscore the limitation of green marketing. Absolutely, we must develop and promote products that are ecologically sensitive and safe. And green marketing has encouraged more eco-friendly product consumption. However, it utterly fails to address two unsustainable conditions:
- Too much consumption by rich people and countries: According to the World Wildlife Foundation, the ecological footprint* of the United States in 2005 was 9.4 (global hectares per person); the world average was 2.7. For high-income countries it was 6.4; for low-income countries 1.0.
- Too little consumption by poor people and countries: Although progress has been made on reducing extreme poverty in recent decades, the World Bank estimates that 1.4 billion people still lived on less than US $1.25 a day in 2005.
Over consumption and inequitable consumption explain much of what troubles our world. If marketers really want to make a difference, they’ll look far beyond green products. And focus instead on how to curb the material cravings of the affluent and narrow the rich-poor gap.
We’re seeing signs of green marketing morphing into “sustainable marketing.” That’s an improvement. It situates marketing in a larger triple-bottom-line context: people, planet, profit. Sustainable marketing, however, implies there is something known as “unsustainable marketing” — which of course there is, most anywhere you look.
We need sustainability embedded in marketing. In other words, marketing — by definition — must be sustainable. There is no green marketing or sustainable marketing. There’s only marketing. And it’s sustainable. Or at least that’s the idea.
What does sustainability mean? I rely on the widely used definition from the Brundtland Commission**: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
The AMA, meanwhile, defines marketing (inelegantly) as “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”
So marketing newly defined could appear something like this:
Delivering value to customers and managing customer relationships in ways that meet the needs of the organization and its stakeholders without compromising the ability of all humans, present and future, to meet their own needs.
Still doesn’t roll of the tongue, I know. But this alternative concept of marketing is profoundly different. No longer will it be enough to satisfy our customers for their benefit and that of our organization and stakeholders (especially shareholders). This business-as-usual approach to marketing has created too few winners and too many losers.
The world could look very different if marketers accept responsibility for ensuring their organizations (or clients) are not jeopardizing the ability of others to meet their needs. In other words, doing our jobs can’t mean satisfying customers, shareholders or bosses at a cost to the health of individuals, communities and environments now and for generations to come. How we avoid that won’t always be obvious. The point is to acknowledge there can be broad social and ecological consequences to our actions and lines we don’t knowingly cross.
Don’t hold your breath waiting for the AMA and academia to get behind a new vision of marketing. They’ll follow the real practices of real marketers. Let’s show them the way.
*According to the World Wildlife Federation, “A country’s footprint is the sum of all the cropland, grazing land, forest and fishing grounds required to produce the food, fibre and timber it consumes, to absorb the wastes emitted when it uses energy, and to provide space for its infrastructure.” WWF also says, “If our demands on the planet continue at the same rate, by the mid-2030s we will need the equivalent of two planets to maintain our lifestyles.”
** Friend Brian Setzler at TriLibrium informs me two key concepts are usually excluded or overlooked when referring to the Brundtland definition: “the concept of ‘needs’, in particular the essential needs of the world’s poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.”
The endless lengths marketers go to get us to buy
Recession be damned. If there’s a way to get people to part with their money, by God, marketers are going to discover and use it. Today’s example? Neuromarketing.
Apparently there’s no recession in Martin Lindstrom’s business, Buyology, Inc. His firm takes its name from his book “Buyology: Truth and Lies About Why We Buy.” Consumer products companies are flying him around the world to learn what he knows about what Marketing News calls “the last frontier of marketing research: the consumer’s subconscious mind.”
Lindstrom’s book, published in 2008, sets him up nicely as an expert on neuromarketing, which he says “is to use the latest brain science to understand the consumer’s behavior.” Or as his book title says, “Why We Buy.” (I confess I haven’t read it.)
Nobel Peace Prize winner and neuroscientist Eric Kandel has said the ultimate remaining challenge of the biological sciences is to “understand the biological basis of consciousness and the mental processes by which we perceive, act, learn, and remember.” In the last five years or so, this pursuit has spawned neuromarketing.
Just as marketers teamed with psychologists after World War II to create the field of consumer psychology, the largest brands are now looking to harness the methods and technology of neuroscience to study our brain responses to marketing stimuli. Neuromarketing is just the latest chapter in a long history of marketers learning to produce better and better-targeted marketing messages that will lead us to buy.
What struck me most about Lindstrom’s interview in the latest issue of Marketing News (no article link available yet) is this comment:
“My intention was to write a book so, hopefully, the whole world could engage in a debate and say: ‘Are we going too far? And if we’re going too far, should we have regulations around this?’ Now, here’s the bad news on this one. The ethical debate has not appeared so far.”
Lindstrom is right. There’s been no debate. But he’s not going to be the one to spark it, given he claims to work with 17 of the world’s largest brands, 12 of which are using neuromarketing. His vested interest is in seeing this new field flourish, not in drawing attention to its questionable reason for existence.
I would love to see a thorough debate of neuromarketing. Just as I’d welcome a public debate on the ethics of word of mouth marketing. But my concern is less with neuromarketing itself than with what it says about the marketing industry: Will there ever be an end to the lengths marketers will go to get us to buy? After neuromarketing, what’s next? Cloning loyal consumers of our brand? If you want some answers read journalist Lucas Conley’s superb book, “Obsessive Branding Disorder.” Or if you’re intrigued by neuromarketing, read the blog.
If humans hope to have a sustainable future, they must consume less. A lot less. A recession is one way to put a stop to buying. A better way is for the choice to be voluntary. What the world really needs is to understand how to trigger or train the subconscious mind to reject the marketing stimuli that entice us to buy more crap we don’t need and can’t afford.
Here’s a book waiting to be written: “DoNotBuyology: Truth and Lies about Why We Shouldn’t Buy.” If you write it, I’ll buy it. No MRI required.