Why Eco-Friendly Products Keep Failing

0:00From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

0:22Eco-friendly products have a problem. Consumers say that they want sustainable products. In fact, surveys show that up to 70 % of people are willing to buy them, but only one to 5 % actually buy them, which is a serious disconnect. So what is the solution? We can just use savvy marketing to convince consumers to go green. This is Ed. Hi, I'm Ed Stafford, and I'm a marketing professor at Utah State University. I've been studying green marketing for over two decades. And here's a fun fact. Usually before I start recording a podcast, if someone's in a room that's very echoey, I will ask if they can move to a different room, a room with some carpeting maybe, which absorbs sound so that it doesn't bounce around and give that echoey sound that Ed has in the background.

1:13But Ed said, in his case, not possible because... I live in an environmentally responsible house and we have no carpeting in the house. It's all hardwood floors and tiles. And if you're wondering, why can't there be carpet in an environmentally friendly home? We're on a little bit of a side note here from the marketing that we will get back to in a second. But anyway, I wondered that. And so? Yes, because carpet will trap all sorts of dust and all sorts of particulate matter and things, and it really can't be cleaned. So the rule of thumb is when you build a green home, or at least when we did in 2008, was that you had all flooring that could be easily cleaned and vacuumed and would not collect particulates.

1:59So in short, cleaning carpet is not especially eco-friendly, certainly not compared to the ease of cleaning hardwood floors. And also it collects and then kicks up all this crap, which is bad for your health. So anyway, there you are. As a result, we're going to just have to deal with an echoey Ed, which is okay because what he has to say is so fascinating. Here is the thing to get back to it. A lot of people say they want eco-friendly products, and yet not a lot of them actually buy eco-friendly products. So what are you supposed to do? Well, Ed says, and he's been studying this for decades, the answer is in marketing.

2:36A growing body of research says we have it all wrong. Although consumers say they want green products, they don't actually respond well to traditional eco-friendly messages. So if you have something green to sell, you need to think differently about the story you tell. That is what we're gonna be talking about today on Problem Solvers. Ed is gonna walk us through some really interesting research that he has done and some other research that I happened to find on the internet that I was so curious about that I wanted to find an expert to speak to. And that is how I found Ed in the first place. The conversation with Ed Stafford about how to market green products in a way that people will actually buy them coming up on this episode of Problem Solvers.

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5:31I've been studying green marketing for over two decades. Indeed.com slash problem solvers. Terms and conditions apply. Need to hire? You need Indeed. All right, we're back. I'm talking with Ed Stafford of Utah State University about the marketing problem in the eco-friendly product space. And we're going to hit on a whole bunch of different problems and interesting solutions and research. But to start, let's begin where, well, I began just a moment ago, which is this strange gap between what consumers say they want, that they do want eco-friendly products and what they will actually buy. We have this, what we call the behavioral gap.

6:12Consumers will say that, yes, I do want to buy green or I do want to buy socially responsible products. But when we actually see their behavior, we don't actually see them behaving in that way. There's been some studies to suggest that maybe only one to five percent of consumers will actually buy green. And so one of the one of the things that I've been studying for the last 20 plus years is how do we get mainstream consumers to buy the greener products? Evidence of this, I think, is that if you look at the market, there really are no green products that command significant market share in the marketplace.

6:52There's one exception, and that is LED bulbs. But as you might have read just this past week, there's been a lot of controversy because incandescent bulbs have basically been outlawed because of efficiency standards mandated by the Environmental Protection Agency. And also there was a law signed back in 2007 that kind of put these efficiency standards in place. And so what's happened now is incandescent bulbs, you just can't find them anymore. And people don't realize, I know there's culture wars out there saying, oh, I want my incandescent bulb, but they're incredibly energy guzzling. And so really, there are benefits of having the LED bulbs to replace them because they're so much more energy efficient.

7:34They can last for 10, 15 years. So there's a convenience with them. But other than that, not even organic foods really command a significant market share. So there is a, you know, there's definitely a gap between what consumers are saying they want and versus what their actual behavior is. Yeah, it's funny with the incandescent bulbs. My suspicion is that nobody actually cares about incandescent bulbs. They just don't like being told that they can't buy incandescent bulbs. And that's where I think marketing comes at. If we make these products more appealing through marketing, then it doesn't have to be mandated.

8:14We can just use savvy marketing to convince consumers to go green. And that's the perfect transition into what we're talking about. So I'd like to talk about the research that you've done, but before we get there, I just want to get your reaction to this study that I had found from McKinsey and Nielsen IQ. There were two specific things in there that just really jumped out at me, that they had found that more hyper-specific claims, like that a product is vegan, drove more sales than generic claims, like that a product is environmentally sustainable, that exact language. And that also when multiple claims were combined together, they drove more sales than individual claims.

8:58Both of these, to me, feel like they're basically making the same point, which is that terminology like environmentally sustainable is so commonplace as to be meaningless or easy to overlook or not trustworthy. Like, you know, you just feel like everyone's slapping that on there. But when it becomes more specific, it grabs your attention more and you contemplate it more. Am I drawing the right conclusion there? Yeah, no, absolutely. And I think a couple of things are going on here. For example, you know, when it says that if it says it's vegan or if it's climate or carbon neutral, I think consumers now are becoming more knowledgeable about these issues.

9:38And so if you say something is environmentally sustainable, It's kind of vague. And so if you can be hyper specific about what your product has that makes it more environmentally responsible, that's going to give it the authenticity that people are looking for. Of course, there is a potential danger. And one of the things that we've seen in some of my past research is that if you say something is green, that might actually turn consumers off. And sometimes consumers are concerned that maybe the quality might not be there. There was a Wall Street Journal article just earlier this summer about Allbirds.

10:14And one of the challenges that Allbirds has is that, well, I shouldn't say a challenge. I mean, one of the noble things is that they try to be a green athletic shoe, but they use this thing called vegan leather that just wasn't durable enough. And according to the Wall Street Journal, some athletes within six months were getting holes in their shoes. And they said that, you know, they want to be green. But if the shoe doesn't perform like regular leather or rubber, they weren't going to use those particular products anymore. And so I think that's something that you have to be very careful with is that you want to make sure that you are green.

10:49But it also performs as well as kind of the non-green products that are out there. And I suppose that's actually a good tee up for your research, because as I was reading the study you had sent me, I think that really jumped out at me. Well, actually, before I, because I'd rather have you set up this research than me, the research that you sent me is oriented around solving this problem that we've been talking about, this gap between what consumers say they're interested in and what they're actually purchasing. And the advice that you orient this around is that companies have to do a better job of turning towards the consumer.

11:30Can you explain that? Yeah, and I think one of the big challenges that you have is that there are many barriers that kind of prevent consumers from going green. And I think what we're seeing now is that businesses get it. They're trying to go green and they're getting their supply chains greener. They're working to create better, more environmentally effective products. But consumers are leery of them. And there's a number of reasons. For example, performance. Are the products going to perform as well? Some of them can center on just being more expensive. Why go green if it's going to cost me too much?

12:05And sometimes green products are just inconvenient. In fact, what we find really in consumer behavior are two things. Convenience and price really are what determine people's ultimate purchasing of specific products. And so that means that we need to make green products to be more affordable. We need to make green products more convenient. And of course, we need to make sure that they perform effectively. And so that's, I think, really important. And there's a lot of reasons why businesses want to go green. So, for example, if I can get you to get your bank statements online as a bank, I can save money and not have to print up all these statements, mail them, all those types of things.

12:45If I can get you to use your towels again in the hotel or to not have your bedsheets changed, that saves businesses money. So there are incentives for businesses to want to get their consumers to go green. And I know we actually put in that report that there's some research to suggest that how consumers use or misuse products actually determines the carbon footprint for a lot of these companies. So companies that are trying to reduce their carbon footprint, they find that it's the consumers that are the problem in terms of not being able to be controlling that particular aspect of the consumption process.

13:25Yeah, so that makes me think of this thing here. So I'm just going to read a bit from your study. You wrote principle number one, promote the consumer value of green products. Now, I think some people might hear that and think, oh, so, you know, another thing about how, well, this is how much carbon we're not emitting into that. But no, no, no. What you read out here are the consumer appeal of green. Number one, money savings. Number two, health and safety. Number three, performance. Number four, status. Number five, convenience. And number six, bundling, where consumer value is added to green products.

13:57In other words, correct me if I'm wrong, but what I'm reading here is consumers may say they want green products, and they do. but what they're actually going to prioritize is, is this a good product? And so the first thing that you need to do really is make sure that you are communicating that, communicating the value of it. And to the degree that you're talking to them about green products, particularly if you're thinking about like the kind of all words example and the way that some consumers might think that green products, great as they are, are also inferior and therefore maybe not the thing that they actually want to buy, that you have to also start to address and overcome the trust gap where someone says, oh, this is green, maybe it's not as good.

14:39So you have to be building in this marketing that's really about performance and money savings and the kind of just meat and potato things that consumers care about. Is that right? Absolutely. You're absolutely right. So back in 2006, we published an article called Green Marketing Myopia. And what we found was, And again, this is 15, several years ago. What we found was that a lot of companies were so focused on the greenness of the product that they were kind of overlooking the fundamentals of marketing. And that is, what do consumers want? And what consumers want are products that are going to meet their needs.

15:14I don't buy light bulbs to save the planet. I buy light bulbs to illuminate my room. And so this becomes a really kind of an important thing. In fact, just the light bulb issue, let me just go back to Phillips to their credit back in the early 90s. They came out with this light bulb called the Earthlight, and they were extremely proud of it because it was a super energy efficient bulb. And they found that consumers just weren't connecting with it. And so to their credit, they did some research amongst their consumers and they found that consumers saw that environmental responsibility was like number four or five on their list of why they buy light bulbs.

15:53But number one was convenience. You know, one of the big problems is you have high ceilings and you've got to put light bulbs in. And if you've got to change them every year, that's a real hassle. So it turns out that these earth lights, which were compact fluorescents, again, this is back in the early 90s before LEDs became more popular. They found that if they could leverage the convenience of compact fluorescents, that compact fluorescents can last five years or more, that was what was really going to impact consumers. And so they changed the name from Earthlight to Marathon. And just the name Marathon seemed to suggest that, hey, this was going to last a long time.

16:32So, you know, for me, this is a really important case of an example of how a product was dying because of green marketing myopia. They were so myopically focused on the greenness of the product that they didn't realize that, hey, what consumers really wanted was a bulb that lasts a long time. And what's nice about LED bulbs is that they last even longer and they are even more energy savings. And so I think LED bulbs in the long run are going to be a big success. But, you know, until we get over some of the culture wars about, oh, you know, give me back my incandescent bulb. Until we overcome that, I think people are going to find that the LED bulbs are seriously much better.

17:12And I have LED bulbs in my house and I love them. I think they're amazing. I will die before I have to change some of those bulbs. I mean, that's how long they're going to last.

17:26When you first started saying that, it sounded like you were just kind of putting your life on the line to make a point. No, what you mean is that the lifespan of these bulbs is literally longer than your remaining life expectancy. Yes, it's amazing. Some of these bulbs are expected to last 20 or 30 years. I mean, it's amazing. And since we don't use them every day, they're like faucets in your house. They're something that's going to last for decades, literally. Right. And if you're thinking about an entrepreneur with a smaller, medium-sized business producing something that is sustainably minded and they want to improve their chances as best they can of convincing consumers to buy this because it's a good product, also because it's environmentally mindful.

18:16What else should they be doing in their marketing aside from the things that we've pointed out here, which is, you know, the kind of hyper-specificity of the language, prioritizing communications about the kind of regular consumer value over just the eco value? What else might they be overlooking? Yeah, no, and I think that, you know, in order to be authentic, you know, you definitely want to make sure that whatever claims that you're making, you want to make sure that you have the data to back it up. And that may mean that you're going to have to have a website that's going to actually go in detail about how your product or your packaging is more sustainable or it's more recyclable, those types of things.

18:57What we have found in marketing of green products is that normally the greenness is almost kind of secondary. You need to definitely have a product that's going to capture the hearts of your customers in terms of performing adequately. And then the greenness becomes secondary. And maybe an example of this would be Tesla. What was interesting about Elon Musk and the early marketing of Tesla and their cars was that he didn't focus on the greenness of the product. You look at some other electric vehicles from 10, 15 years ago, many of them kind of looked like some kind of junior high experiment or some kind of golf cart or something.

19:40But what Elon Musk did was is that his Model S in particular, he made it into a muscle car and they focused on speed and performance. And the very first people to adopt Teslas or at least to kind of explore them were speedsters, people who were interested in speed. And so the greenness of the product really was kind of secondary. But the idea that these electric vehicles were fast and that you had race car enthusiasts driving them and putting up YouTube videos showing that they could go faster than similar muscle cars on the marketplace, that's what really gave the authenticity of the product.

20:19And then it was easy then for other people to say, yeah, I'm going to buy the Tesla simply because it's a performance vehicle. It's not just an experiment or some kind of car that, you know, that Will Ferrell would make fun of in one of his movies kind of thing. And so this, I think, is really important is that you need to kind of focus on what makes your product authentic. So if you're going to come out with some kind of organic food, that's wonderful. but make sure it's really wonderful tasting and that it is special in some way. And so I think that's going to be more important. And then the environmental aspect will be kind of secondary.

20:56And the reason why this is important is that, you know, if you're going to come up with a green product, you don't want just one to 5 % of the people adopting it. You want to get that other 95 to 99 % of the customers to buy that product, because if it's going to have impact, you got to get everybody on board. And so that means you do have to kind of focus on those mainstream values. And so if you're promoting a non-toxic carpet cleaner, it's better to frame it as pet friendly or baby friendly, because now what you're going to get is you're going to get every parent on board or every pet lover on board to buy that particular carpet cleaner.

21:33And then people start to make the connection that, oh, boy, you're right. A lot of carpet cleaners have a lot of toxic chemicals in them. And my baby is crawling on that floor. And my dog is sleeping on that floor. And so, you know, framing it in a way that's going to capture the hearts of those customers is going to be mainstream customers is really going to be important. One other thing I wanted to ask you about picking up on mainstream there was another principle that you laid out, which I thought was really interesting, was that companies with green products should leverage mainstream social media influencers.

22:06You know, that's funny because a way you could imagine that sustainable brands pursue their consumers would be to go through channels that are reaching consumers that are sustainably minded. And there's no shortage of that. You can find all the websites and all the influencers in the world that you want that are really seeped in that culture. And you would think, well, that's good because then you're going to reach the people who really care about this. They're a self-selecting group of people. But I suppose the problem with that is that, number one, it's a smaller group of people. And number two, your sustainability claims don't sound very special when you're in an environment where that is the baseline for being involved.

22:51So can you talk to me a little bit more about what you found and why sustainable brands should really be thinking about mainstream ecosystems and mainstream social media influencers? Absolutely. And so and I think you hit the nail right on the head is that what happens is, is that, you know, if you're going to be focusing on sustainability oriented influencers, their target audience or their followers are basically going to be people who are already into sustainability. And so what I think is more compelling is that when you have kind of these non sustainable or non sustainably oriented influencers and then they suddenly do talk about sustainability, they're potentially going to reach a broader audience.

23:33I just want to bring up kind of interesting after we published our study, Unilever actually came out with a study this year that found that 78 percent of people say that influencers have the biggest impact on their sustainable behaviors. And so it's interesting. Here's Unilever, who is looking at trying to bring in more sustainable products. they say 78 % of consumers say that influencers have the biggest impact. And what we think is, is that from a marketing perspective, this is kind of social proof. What social proof means is that, you know, if other people are doing it, I feel I should do it.

24:10And so there's that kind of social pressure that we tend to take cues of what other people are doing and we want to mimic them. And so social media influencers are basically a reference group and people look to them in terms of fitness and health and makeup and food and all the different things that they promote. And so if those social media influencers are promoting this and they're not your green ones, they're just your kind of mainstream social media influencers, then that becomes much more credible and a more authentic message that consumers are more likely to adopt. And if you could zoom out for a final thought, as entrepreneurs think about sustainability, bringing sustainable products to the marketplace.

24:53And they think about the marketing that they should be doing. And we've talked very tactically for the last 25 minutes about what they should be doing. But philosophically, I guess, what's the lasting impression or lasting message that you think they should have as they try to take their products out into the world? I think one of the hottest issues right now in marketing is the whole notion of storytelling. And so I think what entrepreneurs need to develop in terms of developing their product is they also want to have a story as to what are the values that your company adheres to. And consumers increasingly are buying on their values.

25:33And so if you can come up with a compelling story that is going to capture people emotionally. So you think about it, why do we buy products? Very often it's the emotions that are behind it. You Beyonce or any of those cool brands that are out there that we gravitate to, it's because they've got a compelling story and values that we want to buy into, that we want to hold on to. And so I think what really is important for entrepreneurs, if you're coming up with a sustainable product, make sure that you've got some story behind it that people can think about, understand the values, and that they will even share that story with others.