Every company has a role to play in ensuring business is done in a better way for the planet, communities, and people. This is not just because businesses are morally obliged to help in the UK’s effort to halve carbon emissions by 2030, but also because it can create strategic opportunities and will future-proof your business.
If becoming more sustainable isn’t on your agenda yet, it’s worth looking at some figures. As awareness of the need to become more sustainable increases, consumers are choosing to boycott companies that ignore their responsibilities. Ethical consumer spending and finance in the UK reached almost £122bn at the end of 2020, a 138% increase on just over £51bn in 2010, and there was an 18% rise in boycotts on ethical grounds, totalling nearly £4bn in 2020.1
And while some businesses may have concerns that being more sustainable will increase costs, figures from a global study show that on average, more than one-third (34 per cent) of the population is willing to pay more for sustainable products or services, and those willing to pay more would accept an average 25 per cent premium.2
It’s clear that by ignoring the rising demand for sustainable brands, businesses, whether they are B2B or B2C, will lose out to forward-thinking competitors.
Understanding what your customers want
But how do organisations understand what their customers want from products and services now and in the future? And how can the Customer Experience (CX) toolkit help us?
Today’s leading organisations are differentiating themselves by consistently delivering on their targeted customer experience and creating memorable moments that matter. While their value propositions and business models vary, they all have one thing in common: a deep understanding of their customers. They understand their customers’ needs, motivations, and behaviours today, and are constantly monitoring how these are evolving.
They do this by leveraging CX toolkits to explore what customers are trying to achieve, understand the outcomes they are looking for and the pains they are feeling. When we are working with clients that are looking to embed sustainability, here are the steps we take:
1. Gain a better understanding of the customer
Better understanding your customers requires some groundwork. Customer and user research will give you an understanding of their needs and behaviours. This research can include customer interviews, focus groups, field studies, diary studies, customer feedback analysis, product and service data analysis, click stream analysis, and A/B testing.
2. Segment customers and bring them to life
Bringing customers to life is done by creating customer personas and customer archetypes based on their motivations, needs, and behaviours. A portfolio of data-led personas that represent your key customer groups will help you better explore the problem you are trying to solve and ensure your solutions meet the diverse needs and expectations of your customers.
Leverage personas to conduct customer research in the context of sustainability, both for B2B and B2C organisations. One way to do it is by looking at the pressure your business buyer personas are experiencing in Legal, Operations, Marketing, Product, or Technology for instance. Or you could look at individual customers:
3. Reflect on the value proposition
Reflect on your value proposition by analysing the “jobs” that your customers are trying to get done, the outcomes and benefits your customers require, and the pain points they are experiencing in the context of the products and services that you offer. In particular, ask yourself how embedding sustainability into your value proposition can either:
- Help you meet a customer expectation when they clearly want to purchase sustainable products and services or engage in more circular business models
- Enhance the current product or service experience or decrease the current cost without sustainability being an explicit expectation for your customers.
Remember, customer research is not a one-off exercise. Once you have built a better understanding of your customer needs today, you also need governance in place to keep monitoring, testing and iterating to meet these needs. Once these fundamental processes are in place, you can move on to working out customer needs in the future. This will help you to stay ahead of the curve, drive innovation, and differentiate your business.
Establishing future customer needs
In order to establish future customer needs, you will need to consider the needs of your current customer base as well as the needs of the potential customer base you would like to serve (or could be serving) in the future. We have already looked at establishing current customer needs so let’s focus now on our potential customer base.
To identify potential customers, start by gathering the following information:
- Competitor research
- Market trend reports
- Legislation and policies
With this information in mind, and with the ambition to embed sustainability into your value proposition either by enhancing your current product and services or by introducing new ones, we want to focus on divergent thinking to broaden your current strategy. This will create the space to capture potential opportunities associated with the question: “who will our customers of the future be, what are their sustainability needs today, and how might these change in the future?” Leverage strategic frameworks such as the Ansoff matrix, PEST model, and Porter’s 5 forces to make sure you think outside of the box and start capturing assumptions on future customer needs and behaviours. This insight can be used to define a relevant set of “future customer personas” your organisation wants to serve.
To assist and test your strategic thinking, it is helpful to create three “future customer worlds” that focus on how sustainability might evolve in the next one to five years: one where there is little to no change, a middle ground in which things have improved in line with current trends, and a best case scenario where great strides have been made to improve how sustainability is embedded into society and into organisations’ value propositions. Now, we can project our customer personas into these worlds and test how their needs might differ and how your organisation’s experience, products, and services need to evolve to meet their future expectations.
Finally, do not do all these exercises in a hideout. Find ways to bring your current customers with you on this journey. Work hand in hand with them to identify their future needs and test your ideas on your current customer base. Make sure all your teams are aware of these learnings and use the information and data you gather to start enhancing your strategy and roadmaps.
Conclusion – sustainability is important
Eco-wakening is already well underway and is only set to accelerate. If you don’t already have a sustainability strategy in place, now is the time to start working on one. The earlier organisations understand customer needs today and in the future, the quicker they will be able to adapt their business models and rethink their value propositions to retain customers… and attract new ones.
To help kickstart your organisation’s sustainability transformation here is more of our experts’ thinking. Alternatively, to find out more about how our sustainability consulting can help you, get in touch.
References
- Ethical Consumer Report 2021 produced by Ethical Consumer in conjunction with the Co-Op Group
- https://www.simon-kucher.com/sites/default/files/studies/Simon-Kucher_Global_Sustainability_Study_2021.pdf
