Today we see that companies taking sustainability into account are more likely to outperform less sustainable competitors. This is very good news. It shows that sustainability is not just a buzzword, on the contrary, sustainability can create a competitive advantage if done right. In this article we look at how those companies outperform their competitors and give you the tools to do the same.
Let's start with being very honest. Although a lot of consumers are concerned about the climate and have the intention to buy sustainable products, their purchase intention is not always followed by an actual purchase. In a recent study published in Harvard Business Review, 65% of respondents say they want to buy purpose-driven brands that advocate sustainability, yet only 26% follow up on this with their wallet.
The fact is that sustainability is not a main driver in purchase decisions. However, Nguyen & Slater (2010) found that two out of three companies on Fortune’s “Global 100 Most Sustainable Corporations”- list outperformed their less sustainable competitors. So how do they manage to do that, even when sustainability is not a main purchase driver for their customers? Well, sustainability can be a competitive advantage if companies are actively looking for opportunities to make their offering more sustainable and at the same time, more effective at satisfying the needs of its customers.
The golden combination lays in finding that sweet spot where your sustainable offering is also creating an added value for consumers in other domains like convenience, product performance or design.
How to get there? Well, you need to understand your consumers and build products that satisfy their needs. And there is a catch. Like we said before consumers sometimes don’t know what they need, until they need it.
Business Design Thinking 2.0 will help you understand your consumers. We look further than what people say. We look at what they do, understand why they do it and then build kickass products to satisfy their needs, and all of that with a test-and-learn mindset.
Creating a sustainable product offering that will delight your customers with Business Design Thinking 2.0
Business design thinking is a human-centered approach to innovation. It’s a method to create better, more sustainable products while keeping the customers’ interest in mind.
It starts with a wish. In the first step, you as a company define what you want to achieve. In this case, you want to create more sustainable products or services that delight your customers. It is important that you state both requirements: the wish to add value for your consumer and the wish to create a more sustainable offering. The innovation needs to fulfill both!
In a second step, you conduct research. In normal Business Design Thinking, this phase consists of purely claimed data research: asking a customer what they would do. But as we said before, there is a gap between customer intention and behavior. As this gap is particularly larger in emotionally loaded topics, such as sustainability, the importance of integrated behavioral data increases. In Business Design Thinking 2.0, we look beyond what people say and look at actual behavior. And we even go a step further by looking at WHY people act a certain way with neuromarketing research. This step is essential when it comes to creating sustainable products. Knowing and understanding the purchase drivers of your consumers is the foundation of sustainable innovation.
If your customers are mostly driven by convenience, then you should create sustainable products that are convenient. If you say that is impossible, we say it is merely a challenge. Companies like SodaStream are a good example of a solution that is convenient and environmentally friendly.
The third step is the design phase. Based on customer insights, a product or service is created. Just like we did in the research phase, we add a layer of validation. A minimum viable product is tested on the market to see if it has potential. Only when there is behavioral data that shows purchase intent of customers, the product or service is developed.
Concretely Business Design Thinking 2.0 is a perfect method to create more sustainable products that delight your consumers because it goes beyond claimed data and tries to understand your customers’ purchase drivers. With that knowledge, companies can create products that are sustainable and add value in other domains for their customers.
If you want to talk about your sustainable innovation, contact one of our business design thinking experts and see how we can help you to delight your customers.
References
White K, Simpson B. When Do (and Don’t) Normative Appeals Influence Sustainable Consumer Behaviors? Journal of Marketing. 2013;77(2):78-95. doi:10.1509/jm.11.0278
Nguyen, D. K., & Slater, S. F. (2010). Hitting the sustainability sweet spot: Having it all. The Journal of Business Strategy, 31(3), 5–11
