Greg Andeck manages Corporate Partnerships for the EDF Innovation Exchange, a dynamic global network facilitating the widespread adoption of environmental innovation in business. The EDF Innovation Exchange is also a 3p sponsor.
The world’s leading companies all conduct extensive research to determine what their customers want and how they want it. Whether they hire firms like Synovate or Millward Brown, or do consumer research in-house, companies know the value of crafting products that fit their customers’ needs and desires.
This is why it’s so perplexing that companies don’t do the same when developing substantive sustainability strategies. All too often, companies launch campaigns that are later accused of greenwashing or limit their efforts to indirect efficiency improvements, when it’s their core product that really needs the greening. It turns out that by paying more attention to their customers, companies can unlock solutions for true environmental innovation and get richly rewarded for doing so.
Taking a Page from Environmental LCAs
Environmental lifecycle analysis (LCA) is quickly becoming a popular tool with leading companies that want to ensure product design and material choices are a significant improvement over the status quo and don’t have perverse environmental outcomes [think biodegradable packaging that goes to landfill (30kb pdf) or the recent haphazard rush to biofuels]. By conducting a holistic examination of a product’s impacts – from material extraction to product use to disposal – environmental LCAs can help companies make better material and design decisions to improve their environmental performance.
However, while environmental LCAs are a great tool for creating greener versions of existing products, they are not as good at creating truly transformative products. For example, they will show that recycled paper packaging is better than virgin paper, but won’t necessarily prompt companies to come up with paper-free products in the first place. This is where the consumer LCA comes in.
Introducing the Consumer LCA approach
The consumer LCA is a research framework I use to track the actual customer use of a company’s product: how a product is advertised to consumers, where it’s purchased, how it’s used, and how the product is disposed. By repeating this process for different types of consumers, companies can get a full window into their customers needs and identify opportunities to craft game changing environmental innovations.
I’ve had direct experience using the consumer LCA approach with the companies we advise here at EDF and it’s a tool that companies can use directly or with the help of consultants and NGOs. Here are two examples of companies whose products have significant environmental impacts that could use this tool to more deeply embed sustainability into product design:
Example 1: Bottled Water Company
Suppose you’re a bottled water company that has been criticized for the waste associated with your product and the energy used to manufacture and transport it. It turns out that there’s a segment of the population – no one knows exactly how large – that refuses to regularly drink bottled water for these reasons. Essentially, they’re willing to pay for clean, refreshing water, but not the guilt associated with drinking it in bottled form.
By conducting a consumer LCA, bottled water companies can identify these customers and craft products that meet their needs for clean, refreshing water with less waste and carbon impact. These firms will realize that there exists a market opportunity for new personal filtration products (think Britta) in the home and office that convert tap water into a more appealing format with less environmental impact. No longer is the company just a bottled beverage firm; it’s a hydration company that seeks to provide all consumers with clean, refreshing water and a small environmental footprint.
By listening to their customers needs, this hypothetical bottled water company is now able to capture additional market share and revenue, jumpstart its slowing growth, and introduce a more sustainable product offering.
Example 2: Cell Phone Carrier
With an average life span of two years or less, several hundred million cell phones are disposed of in landfills each year, leaving a trail of toxic waste that future generations will be forced to deal with. A better approach would be to use fewer toxic materials in phones and to extend their life creating less waste and fewer adverse environmental impacts. The conventional thinking, however, is that this approach is counter to the consumer’s desire to have the latest, flashy new phone.
Interestingly, what mobile phone carriers find when they scratch below the surface is that a significant portion of their customers don’t desire a frequently updated, flashy new phone. They just want a phone that works, is easy to use, and is durable. That said, why do customers get new phones so often? One reason is that battery performance is poor and often lags the lifespan of the rest of the phone. Therefore, wouldn’t it be better to provide a battery service that gives customers the freedom to refurbish the phones they already have and enjoy instead of ditching a perfectly good electronics item?
There will always be early adopters who want the newest technology. But, by identifying this discrete block of customers that doesn’t need consistent product turnover, this phone carrier is able to offer a new phone refurbishing service, keep their customers longer, and reduce the number of phones going into landfill.
Changing the Focus
Although hypothetical situations, these two examples reflect real opportunities being missed by today’s leading companies? By taking a consumer LCA approach, companies can go beyond eco-efficiency improvements and glitzy green projects that lack substance and instead completely rethink their business model and product offerings. Only then will companies truly integrate sustainability into the core of their business. It turns out that it pays to listen to the customer after all.