Commentary: Green Customer Service

Lead Author: Dr. Jeff Howe

Publish date: 12.01.2004

 

 

Serving Customers in the Green Marketplace

 

There is an old saying in business that the customer is always right. While this mantra has been around for generations, the implications become more significant in the face of increasingly educated and experienced consumers with very definite expectations and abundant alternative sources. This scenario is playing itself out in the forest products marketplace.

 

Today, the forest products industry faces two major issues: foreign competition from developing countries (e.g. China) and growing concern over "green" products. These issues are linked. The solution to both is to build intimate customer relationships. The companies that are thriving in the face of major challenge are doing so by linking closely with the needs and desires of their clients.

 

So what are the needs and desires of the consuming population today? Well, over the last ten years surveys consistently suggest that almost everyone (95-100%) is concerned about the environment. In addition, recent Roper polls indicate that almost 85% of the population describe themselves as “environmentalists.” There have also been a number of studies that have attempted to describe subsets of this group.

 

These studies suggest that 3-5% of American consumers could be termed “rabid environmentalists.” They will do almost anything to purchase products that are “green” and will sometimes pay significantly more to get what they want. In addition, they are often willing to forego a purchase until an acceptable version is available.

 

Next, there is a market segment often described as “cultural creatives,” representing an additional 8-10% of the market. This group will educate themselves in detail before they buy, proactively seek environmental solutions, and shop through unusual channels to get what they want.

 

Those consumers that don't use products unless they're “green” and those that are willing to find answers to environmental concerns combine to represent the 14% of consumers that are proactively seeking environmental solutions. In general, these two groups combined are extremely suspect of the motives of industry, and their inability to find trustworthy wood solutions makes them susceptible to falling prey to environmental sales pitches by producers of other materials. (save a tree buy steel, save a tree use hemp paper, etc).

 

Next is a group of individuals (about another 15-20% of the population) that are very concerned about the environment, but aren't likely to go out of their way to act on their concerns. Some will pay a premium for some goods (e.g. energy efficient furnaces), but not always. They aren't going to run from store to store to find the perfect environmental option - but they will read labels and advertising, and the environment is a consideration. Because of their reliance on labels and advertising, they are susceptible to material substitution literature, and are highly influenced by the choices made by the “ don't use” and “ find answers” segments.

 

The final segment represents between 25-50% of the green marketplace, and these consumers are significantly influenced by the negative information of the “ don't use ” segment, but their attention level depends on the specific product and its importance to them. In addition, it appears that for this group, environmental purchasing is less about seeking out good products than it is about avoiding risky materials.

 

In summary, about 25-30% of the population is regularly and proactively making decisions based on environmental information for a wide variety of products. In addition, there is a larger group of between 30-50% that is actively avoiding some products (e.g. some just avoid aerosol spray cans). Finally, about 10-15% of the population is still concerned about the environment, but just doesn't know what to do about it and thus, generally, doesn't act.

 

Now, when you ask the 50-75% of the population that is either actively seeking green or actively avoiding controversial materials the question "Why do you think the use of wood is bad?" you consistently hear: deforestation, clear cuts, loss of big old trees, loss of natural forests, and species extinctions (not necessarily in that order). ( It is valuable to point out that surveys of thousands of wood products employees have shown that a third of this group believes wood use to be bad for the environment! So it is not just the public at-large with concerns. )

 

In addition, the more educated of them may link forest loss to decreased water quality and global warming. An important point here is that these concerns are significantly different than those that initiated the forest management plans of a hundred years ago. At that time the driving need was to preserve the supply of timber and game animals for the future. Today, supply is perceived as less of an issue and the more complex components of the forest are at stake.

 

One solution developed to address the concerns of these consumers, and to improve the perception of wood in general, is certification. Certification is meant to be a voluntary means by which customers can identify wood from forests that protect those things people care about. Interestingly, certification could be described as a solution initiated by an influential segment of consumers to address their own unmet needs. Several key industry leaders, e.g. IKEA and Hayward Lumber (ProSales Magazine's 2003 National Dealer of the Year) have recognized this consumer interest and are successfully including certified wood products as part of their business strategy.

 

Yet resistance to environmental solutions remains. The difficult thing to understand is how today, in an environment where competition is so fierce, we still hear stories about situations when a customer asks for certified materials and the companies still ignore these needs. It is clearly a missed opportunity to build a stronger relationship with the customer by working together to address a complex problem. Not only are many wood businesses ignoring these requests, but some have also gone so far as to ridicule customers for even broaching the topic! When a customer presents a solution to a supplier and says "I will buy your product if …" the industry is significantly hurting itself long-term by disrespecting both the process that came to that solution and the customer that asked them about it. This failure to respond constructively compounds customer distrust of the wood products industry and reinforces tendencies to shift purchasing to alternative products.

 

There is a legitimate concern that the adoption of certified wood will, by inference, suggest that non-certified is wood is bad, leading to increased shifting of purchases from wood to less environmentally friendly solutions. To the extent that there is a significant delay between awareness and availability of certified in the marketplace, this is true. There is also legitimacy to the statement by some industry members that “no one is asking for certified.” The key is in recognizing that at least part of the reason consumers aren't asking rests both in the fact they aren't even aware certification exists and that many simply can't envision the wood industry as a green solution.

 

To me, the excitement about certification is that for the first time the debate changes from “if wood is harvested” to “how wood is harvested.” This creates an exciting opportunity for industry to address many broadly held misperceptions. If embraced, certification opens the market to that 85% of the population that has concerns, and wood can become the environmental solution.

 

Both foreign competition and environmental concerns are real threats to wood use. Yet, there is ample evidence that good companies survive competition. Perhaps the solution to both concerns is for industry to embrace certification fully, and clearly get consumers and industry on the same side.

 

Dr. Jeff Howe