In the previous post I examined the reasons why I believe customer experience has become vital for the long term economic sustainability of service organisations. I introduced the Triple Bottom Line of sustainability (balancing economic, social and environmental factors) and focussed on the economic element. In this post I am going to reverse the angle and explain why environmental and social factors are becoming increasingly important elements of the customer experience and thus contribute to economic sustainability.
Customer experience and sustainability now go hand in hand. Customers want to purchase ethical products and services; so much so that a company’s ethical credentials now contribute directly to the customer experience, because of how ethics affects the customers’ emotions.
As consumers we are better educated in environmental issues than ever before, particularly with regards to global warming. Most people now understand, or at least acknowledge, that to prevent irreversible damage to the planet we need to cut our carbon emissions right back. Recycling, walking or cycling to work and offsetting our carbon emissions all make a difference and should be encouraged. However, many consumers realise that to make the biggest impact they need to carefully select the businesses they purchase from, in terms of their environmental credentials, because business is where the greatest impact can be made. Little Joe Bloggs realises he can’t make much of a difference on his own, but if he can help influence a business that sells to millions of people it will have a great impact.
Furthermore the rising significance of social media platforms such as Facebook and Twitter have resulted in greater transparency, so it is very difficult for organisations to hide harmful practices from their customers.
Customers are beginning to favour ethical brands and ethical consumerism is a growth area. This means consumers are actively seeking out the products and services that have done minimal harm to society, animals and the natural environment. According to a study by Co-op, in 2009 64% of consumers in the UK avoided a product or service because of a company’s behaviour and 60% chose a product or service because of a company’s ethical behaviour. These figures were up from 44% and 51% respectively from 1999. Furthermore, 59% of consumers had recommended a product or service to a friend because of a company’s ethical behaviour.
Sustainability is becoming part of the customer experience as it has a direct effect on the way a customer feels and hence their experience of a product or service. Customers can be affected by guilt if their consumption of a product or service has a detrimental impact on any of the above, and likewise organisations have an opportunity to create a feel good factor for the customer if they know their consumption has no detrimental impacts, or perhaps even a “Wow” factor if they have done a lot of good. The addition of these elements of sustainability to the overall customer experience are depicted in the graphic below:
Elements of sustainability are becoming part of the Customer Experience
This means that organisations not only need to ensure their development doesn’t compromise their own future, but also that they are not doing any harm to society, the economy or the natural environment – so they must follow a path of sustainable development. Organisations that don’t find this balance will face extinction as customers turn their backs on them and they are no longer economically sustainable.
There have been many examples recently of organisations that have attracted terrible press for the way they treat the environment, society or animals. Nestle came under much criticism for using palm oil in their products, which contributes to the destruction of rainforests and not only costs the lives of animals losing their natural habitats, but increases the effects of global warming because rainforests help to cool the planet. Nestle managed to turn not only Greenpeace and hardcore environmentalists against them, but also Internet communities and normal people who 10 years ago might have been none the wiser. Although the true impact on Nestle’s sales is yet to be revealed, a lot of damage has been done to their reputation.
A great comment after my previous post by Barry Dalton gives us another high profile example of where poor environmental performance has affected the customer experience:
A very topical example – BP:
It is becoming evident that they have had pretty low regard, institutionally, for environmental sustainability from what we’re learning of their safety practices. This led to Deep Water Horizon. This will impact customer perception of the company and cause customers to defect as this accident negatively impacts their experience with the brand (boycotts and all are admirable but a bit hypocritical unless of course you ride a bicycle or walk everywhere, but that’s another discussion). This loss of sustained/repeat customers and the lack of concern for environmental sustainability led to a $17b quarterly loss announced yesterday, destroying a huge chunk of value which may, in the end, lead to BP not sustaining itself as an on-going concern.
An excellent article written by Steve Cohn on the Customer Management IQ blog offers insight into why disasters like the BP oil crisis affect the customer experience – because customers feel helpless. This may also explain the reason that customers have begun actively seeking ethical products and services. Just like Joe Bloggs earlier, we feel helpless to make a difference on our own and so turn to the organisations we know can make a difference. If we vote with our wallets and purchase from organisations we trust to act in a responsible manner then we know we can make a difference.
As ethical consumption becomes the norm, organisations like in the examples above will find themselves becoming even more outcast for acting in an unsustainable manner.
What do you believe? Do you make a difference by purchasing from ethical companies? Does this give you greater satisfaction and thus improve the customer experience? And do you have any examples of companies who are prospering or wilting because of their sustainable credentials? I would love to hear from you in the comments section below:
