2014-05-14

Co.Exist

A Radical Strategy For A Hotter, Scarcer World: Tell Customers To Use Less Of Your Product

It's one of 10 strategies that make up a new way of doing business, given the coming realities of a hotter, scarcer, and more transparent world.

A few years ago Patagonia ran ads asking people not to buy their products. The Don’t Buy This Jacket campaign was part of a larger initiative to question consumption entirely. The company has proposed a new social contract: "We make useful gear that lasts a long time. You don’t buy what you don’t need." Patagonia followed this up with a more recent attempt to promote a "responsible economy."

Patagonia is merely asking us all to examine what "need" means and to buy something of quality when we do need something. This company, along with a handful of other leaders, is challenging the normal models of business. The business world and society are facing unprecedented challenges. Two in particular—climate change (with extreme weather) and resource constraints (with rising commodity prices)—are game changers on a profound level. In a world of increasing costs and extreme physical volatility, the regular cycles of consumption and resource use will get expensive, if not impossible.

Asking your own customers to use less of your product is one of ten strategies that make up what I’m calling "The Big Pivot," a new way of doing business to navigate the realities of a hotter, scarcer, and more transparent world, where everyone can see how your business operates. The other strategies include fighting short-termism, setting goals based on science, redefining ROI to make better investment decisions, and collaborating in radically new ways with even your fiercest competitors. But perhaps the most heretical strategy is to actually inspire your own customers to challenge their consumption habits.

This approach is rare in consumer-facing businesses, but is not uncommon in the business-to-business world. When companies like Xerox and HP sell organizations multi-function printers to replace dozens of regular models, or offer devices that add wi-fi capability to older printers, they are satisfying evolving customer needs, but they are also reducing demand for the core product. In a business world increasingly concerned about wasting resources and saving money, offering these kinds of solutions before competitors do is just good business. Doing this right provides deeper value to customers, builds stronger relationships, and helps companies hold onto market share.

But it’s easier said than done. How can a company execute a delicate balancing act of profitably filling customer needs while helping them reduce the impacts of their consumption? A few suggestions:

  • Understand the value-chain impacts of your product or service. Where can reduction really make a difference on resource use (and ultimately the costs of delivering that product)?
  • Think about the core brand promise of your product or service and figure out how it connects to the world’s mega challenges. Using these first two steps, Unilever has identified water use as the core impact of its shampoos and body washes and worked to connect to conservation in brand-appropriate ways (running water-saving "turn off the tap" campaigns around Suave and fun "showerpooling" videos to suggest users of Axe body spray share shower time with significant others).
  • Consider product end-of-life as an opportunity to connect with customers and solve a problem for them. Can you create a closed-loop or circular process with your suppliers and customers? Marks & Spencer has collected millions of used garments with its "Shwop" campaign, donating most, but turning some into new products made from recycled fiber that cost less than new items.
  • Map out what a "use less" approach to your core product would mean. If customers start wanting less of your core product, how can you still make money?
  • In the B2B world, work with customers on joint business planning to tackle mega challenges and reduce resource use together.
  • On the consumer side, ask everyone for their ideas on how to reduce impacts or handle big challenges. Leverage the connectivity and open innovation tools out there to access the group brain.

But while the balancing act can seem tricky, it’s good for business. Offering products and services that help customers reduce energy, carbon emissions, water, and resource use does not necessarily equal pure altruism, tree hugging, or sacrifice (either financial or in quality or usefulness). The best innovations lead to products that do more for customers while reducing impacts. Consider the simple example of LED lighting: LED lights may cost more up front, but use drastically less energy and last much longer than old incandescent technology, saving homeowners and businesses a lot of money throughout the years.

Or look at what buyers of a Patagonia jacket get—a quality, long-lasting product (with lifetime repair guarantee) made from recycled material. The jacket reduces overall demand for resources, while still providing consumers with all the functionality and style they need.

Leading companies can take this a step further. What if they offered products and services that are "regenerative" and actually improve the world? For example, European home retailer Kingfisher has set a goal to help people build homes that generate more energy than they use. In this scenario, companies can help customers use less of the world’s resources precisely because they buy more of their product.

It’s time to do business in ways that accept and deal with tough realities and ever-changing demands from customers. Paradoxically, this strategy can lead to more business growth, mostly at the expense of competitors. Patagonia continues to sell more and more of its high-quality, longer-lasting, recycled garments. And as Unilever’s North America president Kees Kruythoff explains, "our purpose-driven brands that deliver something to society are growing twice as fast as the rest of our portfolio."

That doesn’t sound so radical after all.

[Image: Abstract via Shutterstock]

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