How Companies Can Break Through the “Green Premium”

How Companies Can Break Through the “Green Premium”

Effective sustainable storytelling can overcome consumer reluctance and skepticism.

While the number of consumers who claim to be willing to spend more with socially and environmentally responsible companies is growing, the number who actually do so is progressing at a slower pace. In a recent Nielsen study, 50 percent of global consumers surveyed said they would be willing to spend more for more responsible and green products. However the percentage of consumers that had actually done so was frequently far lower—as low as 22 percent in some countries. Many regions reported lower-than-expected percentages of consumers willing to pay more for green. Somewhat surprisingly, in Europe, which is widely recognized as being at the forefront of green business practices, only slightly more than 1 in 3 consumers (~36 percent) expressed a willingness to spend more for more sustainable products.

Why the disconnect between “green attitudes” and “green purchasing behavior”? Even when there isn’t a “green premium” involved, some consumers are reluctant to make changes. One reason is brand loyalty. Whether it is consumer packaged goods, business products and services or even generic medications, many consumers are hesitant to switch from trusted brands, even if there’s a more responsible alternative available at a similar cost.

“Green fatigue” is also on the rise—some consumers have had bad experiences with brands pitched as sustainable, have been turned off by past false starts, or are simply tired of hearing too many cookie-cutter, undifferentiated claims.

This challenge is often best confronted by positioning sustainability as one benefit among many. Don’t ever assume that it’s enough to be responsible and eco-friendly. Your brand will require the same strategic planning and tactical positioning as any other product or service. If possible, try to win customer loyalty by demonstrating that your offering is the best possible choice on the basis of its other merits, with sustainability as an extra benefit to tip the scales against less-responsible competition.

Ultimately, how you tell your “sustainability story” will play a critical role in breaking down the wall separating rising sustainability awareness and consumer buying behavior.

Ready to start identifying the key components of your own sustainability story? Download our Sustainable Storytelling Worksheet to get started. And if you don’t already have a copy of our latest parathink briefing—Beyond Green: The Expanding Role of Sustainability—then click here to get your free copy.

Want to review your own sustainability strategy—or anything else that’s on your mind? Set up a complimentary 30-minute strategy session with us by clicking here.

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