Customer Experience

How Sustainable Businesses Drive Customer Loyalty

April 06, 2017

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Not all consumers are passionate about the environment. The consumers who are, however, care about how your company invests in environment-friendly practices.

According to a survey by Pew Research Center, 74 percent of adults in the U.S. say that the “country should do whatever it takes to protect the environment.” In addition, 4 in 10 Americans identify themselves as environmentalists.

Why does this matter to businesses?

Jeff Siegel, editor at Wealth Daily, says that being an environment-friendly company can help drive customer loyalty.

“You have folks that are very interested in seeing how a company is investing in the environmental footprint,” he says.

Catering to consumer interest in how a product or service is made — and not just what it is or what it does — can also enrich customer experience, which then leads to improved loyalty. Siegel cites as an example how hospitality organizations can create value through, say, more efficient supply chain management.

“One thing I find interesting is the food that hotels serve,” he says. “I know that a lot of larger chains use centralized distribution systems and centralized food companies. It’s very streamlined, but I’ve actually seen smaller hotels that utilize local food production. It takes a little more manpower, but they ended up saving money because by going local and buying in large numbers, they’re getting better deals.”

Not only do environment-friendly practices make a positive impact on a company’s corporate image and brand reputation; more often than not, it also leads to a better, higher-quality product for customers.

“Chances are you are going to get higher-quality food if you go to a local farm because it’s going to be fresher and more nutrient-dense, as opposed to stuff that grows on industrial farms,” Siegel says.

While customers can be more inclined to stay loyal to businesses that are environment-friendly, Siegel says it’s not worth implementing an operation that’s good for the environment but not good for the company financially.

“You don’t want to do something really great for the environment and really great for society but not be able to sustain it,” he says.

Sustainability Offers Customers the Opportunity to Advocate

Sustainability as a viable business strategy is validated by a number of research studies. According to a global corporate social responsibility (CSR) study by Cone Communications, people are less likely to do business with companies that are perceived as irresponsible. On the other hand, companies that are able to visibly demonstrate their ethics and show a commitment to the environment are more likely to have a stronger reputation and attract customers who care deeply about what a business stands for.

Planting trees or saving sharks isn’t the only way for companies to care for the environment; best practices can be tailored based on the business category or industry you’re in. Sustainable product or service design, for example, can make an impact on a company’s relationship with customers.

Marlon Kobacker, the director of Sustainable Future Group, says environmentally conscious consumers have the opportunity to advocate for environment-friendly practices when they choose a sustainably designed hotel.

“Due to reduced costs associated with sustainable hotels, owners are able to generate greater profits, even as customers pay less for staying at the environment-friendly hotel.”

Industry stakeholders are taking note. TripAdvisor, the world’s biggest travel reviews website, even has a GreenLeaders program that allows environment-friendly businesses to highlight their commitment to millions of travelers around the world, at no expense.

Given the wide array of benefits that environment-friendly practices can bring, companies must continue to stay focused on the products and services that are at the core of their business.

Pablo Solomon, an artist, designer, and futurist who was previously a science consultant at the U.S. Department of Education, says it’s important to know that being sustainable and friendly to the environment does not substitute for having a high-quality product or service.

“If (your customers) do care about the environment and everything else is equal, your going green will give you an edge,” he says. “However, people will not support a business that has overpriced, second-rate products and services — people will not support you just because you have floors made from sustainable materials.”

Driving Loyalty Through Education

Ryan Harvey, sustainability coordinator at the Oregon Convention Center, says the center’s team works to carry out environment-friendly practices. The team makes special efforts to recycle materials like Styrofoam and tablecloths. The custodial staff uses environmentally-friendly products, and the center even has a rain garden that naturally filters stormwater runoff so that the river flowing through the town is that much cleaner.

“When efforts like these are made, people notice,” Harvey says. “Guests appreciate that we work with event managers to minimize waste.”

Guests also appreciate the education they receive from the center.

According to the center, “We operate with a pledge to continually reduce our environmental footprint, and to educate staff, clients, and visitors on the importance of working together toward a sustainable future.”

It’s clear that environment-friendly practices and a commitment to sustainability serve as a powerful platform for your business, helping drive customer loyalty and galvanizing a community of customers who share the same values. Changing the way you do business in response to environmental situations can definitely change the way your customers do business with you.

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