Are you targeting the correct green consumers?

Vnunet_jpeg Originally posted Jan. 25, 2008
by Danny Bradbury, BusinessGreen; vnunet.com

Why do you market your company as ethical? Do you do it because you have to,
or because you want to?

Some companies might do it as a form of self-preservation, because they are
afraid of what customers will say if they don’t. Other, more progressive firms
may do it because they realise that there is an opportunity to target customers
who feel strongly about the issue.

In the UK, the Co-Operative Bank’s 2007 Ethical Consumerism report, published
in November, showed that ethical spending in the UK had jumped by 81 per cent
since 2002. At £29.7bn, the market is still relatively small compared to the
annual consumer spend of over £600bn, but that presumably means that there is
plenty more headroom for market growth. Meanwhile in the US, the
Natural Marketing Institute (NMI), a
market research firm that focuses exclusively on this area, classifies the whole
target market under the banner of lifestyles of health and sustainability
(LOHAS) – the sector is worth $209bn on that side of the pond.

Who is buying these ethical products and services, and how can companies
reach these customers effectively? Trying to pigeonhole the green consumer by
pointing to a single demographic was probably naive 20 years ago. Today, it
would be extremely foolish.

Types of green consumer…
Analysts suggest that there is a slight demographic bias, but it is far from
conclusive. In his November 2007 report In Search of Green Technology
Consumers
, Forrester analyst Christopher Mines found that the bright
greens – a small contingency of serious green consumers representing 12 per
cent of the US market – were likely to be primarily female and from slightly
older age groups. Aside from the bright greens, the greens (those with a
moderate interest in green issues) and browns (those who could not care less)
that Mines identifies are tricky to accurately characterise.

Identifying a slight demographic trend in bright greens might give companies
a hint at the age range and gender they could pursue. But according to LOHAS
business director at NMI Gwynne Rogers demographics are notoriously difficult to
pin down. Instead, NMI has developed a segmentation model that is behaviourally
driven, which reveals that "behaviour tends to be driven uniformly across
demographics". Dividing consumers by behavioural traits rather than demographic
characteristics makes the LOHAS consumer base is more predictive, Rogers says.

However, this scattered distribution of green consumers makes purely
demographic targeting more difficult and as result marketers have had to focus
on what people think and feel, and how they behave, rather than how old they
are, or where they live. NMI revised its market segmentation in 2005, settling
on five different behaviourally-defined consumer categories: LOHAS, Naturalites,
Drifters, Conventionals and the Unconcerned.

LOHAS consumers map onto Forrester’s bright greens. They are early adopters
of green products, and extremely brand loyal, but very demanding. "LOHAS
consumers ask more questions about how the ingredients of materials were sourced
and how they were processed and shipped, which is why you see them interested in
things like fair trade," explains Rogers.

Naturalites also exhibit strong green attitudes, but they are focused more on
personal health issues. Expect the holistic living, yoga-practising consumers to
inhabit this space. Drifters are what NMI calls "trend sensitive". They are the
type of consumers that are more worried about image than actual execution, and
are eager to be seen in trendy eco-supermarkets such as Whole Foods partly
because it’s the hip place to be. Conventionals are a group of consumers that
have an interest in green issues but are driven by practical concerns. They want
to conserve energy and water because it saves money and makes good old-fashioned
sense. Finally, the unconcerned consumers correlate directly with Forrester’s
‘brown’ group. Green issues simply aren’t on their radar.

Reaching the masses?
But how can companies reach these various green consumers? In keeping with the
mainstream nature of green and ethical issues, Nate Elliott, senior analyst at
Jupiter Research, says that some companies have simply begun folding green
messaging into their general branding, without trying to create distinct
marketing messages for specific groups. Then, when consumers come to them
through channels such as the web, companies can guide them into specific areas
focused on green topics.

Similarly, Ted Ning, director of the LOHAS
conference
, notes that the days of the organic ghetto aisle in the
supermarket are over. Instead, companies are folding green and ethical concerns
into their product propositions at a more fundamental level. Organic products
have made their way onto every shelf in the supermarket, because a broader range
of consumers is becoming interested in such things.

This broad brush approach is useful if you are a company with the marketing
budget to address a wide market with your brand, but for those who are more
limited will need to focus on smaller markets, where other techniques are
necessary. For example, Perry Goldschein, managing director of specialist green
marketing company SRB Marketing, relies on email campaigns for direct response
marketing. That requires a partnership with websites and publications read by
green users. He advises trying to avoid the larger, better-known ‘green portal’
sites, because they are more expensive. "Some sites charge quite a bit, but if
you can do your homework and find those lesser-known sites still reaching
hundreds of thousands of people, you can get good deals and still reach a lot of
people in your campaign," he advises.

Jupiter’s Elliott also recommends using social marketing tools that sit well
with the concept of green purchasing as a consumer lifestyle choice. Using
social networks to engage these customers, along with frequent, informative
messaging about green issues, can help build the type of brand loyalty that
LOHAS consumers are known to have. However, such activities are still relatively
new for many companies, and many marketing professionals are feeling their way
in the dark.

Taking advantage of social media may be one of the most labour-intensive
forms of marketing, but it could also build the type of brand value that
companies crave. If the message is sincere, and companies can demonstrate that
they practice what they preach in their operations, then the signs are that
LOHAS consumers will be more than willing to listen.

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