25 Feb Do consumers prefer eco-friendly companies?
Bottom line is: Consumers prefer people-friendly organizations and environmental protection
The days when consumers made a purchase decision based strictly on product quality and price are long gone. Today’s consumers are much more demanding, and they’ve shown a significant preference for the environment and people-friendly organizations. Not sure exactly what that means? The results of a 2014 Nielsen Study should shed some light on the topic:
- 55% of respondents reported being willing to pay more for products/services from companies committed to “positive social and environmental impact”.
- 52% of respondents reported purchasing at least one product/service in the past 6 months from a socially responsible company.
- 4 out of 10 respondents report they made a sustainable purchase in the preceding 6 months.
- 52% of respondents say their purchase decision was at least partially affected by social and environmental impact labels/notifications on packaging.
- 2/3 of all consumers choose sustainable products over conventional products.
What does this mean for your business? Simply put, if you’re not people-friendly and dedicated to protecting the environment, you have an ever-shrinking share of the market. What sorts of things make consumers more likely to purchase a product or service from a company?
Two of the single largest factors in terms of packaging are Fair Trade labelling and USDA-certified organic labels. Both of these (often in tandem, with coffee being a prime example) labels are used by concerned consumers to determine whether a product fits their ethical buying needs.
Of course, labelling isn’t the only factor here. A company’s reputation, based on their efforts in being both socially and environmentally responsible, play a significant role as well. For example, oil companies like BP have seen falling profits and market share due to their reputation for being unfriendly for both the environment and consumers (the horror stories after the Gulf Coast oil spill are prime examples).
For small businesses, the trend is clear – green, organic and environmentally friendly businesses dedicated to benefitting the community are poised for growth.