Commentary: Market-Based Certification Systems

Lead Author: Dr. Jeff Howe

Publish date: 05.01.2006

 

Addressing the Real Interests of the Market

 

Forest certification has been in place now for over a decade and after that fairly short period of time has achieved an awareness level in the general marketplace that probably hovers somewhere around zero, statistically speaking. Sure, there are thousands of individuals globally that have heard of forest certification. But if that group is considered as a proportion of the planet's billions, or even simply as a percentage of those residing in developed nations, the number is extremely small. Beyond basic awareness, the actual proportion of people who are knowledgeable enough to correctly identify variations between two or more of the 60 or so forest certification systems existing around the world today shifts from statistically irrelevant to effectively nonexistent. There are probably fewer than several hundred people in the world today that can discuss the specifics of more than one forest certification system. In fact, there may even be fewer than a hundred people in the world today that can discuss with authority the specifics of even one forest certification system.

 

Yet one goal of certification has always been to provide customers with a choice – to, in fact, offer them the opportunity to direct their purchases toward products that have the least negative impact on the environment. In other words, certification has the goal of rewarding good environmental behavior and providing an alternative to boycotts that are designed to punish the bad (e.g., the old carrot versus stick approach). However, the complaint commonly heard from companies that have put the effort and expense into becoming certified is “our customers are not requesting certified.” So the question arises, is this perceived lack of customer demand a result of a general lack of interest or awareness, as discussed above, or due to some other cause?

 

A key component of selling any product to a potential customer is to be able to satisfactorily answer the customer's questions about it. Sometimes those questions are straightforward, such as how much does it cost and when can you deliver it? At other times those questions are more subtle. In the case of wood products, issues known to be on the minds of consumers, even if unspoken or at best poorly articulated, include concerns about wildlife and endangered species, clearcutting, and rainforest destruction. One common issue – that related to recycled content - has been addressed by certification programs for reclaimed and recycled wood and paper products. However, by and large forest certification systems are designed to evaluate forest management and a wide range of economic, social, and ecological issues that are complex and that don't provide straightforward answers to questions of importance to consumers.

 

To a certain extent certification systems further complicate the issue of addressing concerns about the environmental impacts of wood by increasing the gray area to include the science of the forest management process and decision-making. Now even the data are no longer black and white. Instead of demystifying the forest industry we have taken it to a level of detail well beyond the average consumer. So, from the environmentally conscious consumer's point of view, it is not only a decision about whether the wood is from a sustainable forest or not, but also about “sustainable according to whom and under what conditions.” This is not to say that certification systems are bad; quite the contrary. But it is to say that the current approach does not lend itself to easy translation to the average consumer. Hence the large gap between those markets that theoretically should welcome certification and those that are actually requesting certified products. The gap is as much about the marketing message as it is about the market.

 

So the question might be asked, is there a way the existing certification process can better address the interests and hot-button issues of target groups such that participating companies can increase their financial benefit from certification? A prerequisite to success in this case requires that the industry truly understand the interests of those target markets and is also willing to try to address those interests. Note here the use of the word “interests” rather than “concerns.” Too often firms today address a customer's interest in, for example, wood that “does not come from clear cuts,” by trying to convince them that clear cuts are not bad, even when those firms may have wood in their inventory that does not come from clear cuts (e.g. cherry, maple) . The result can be both a firm and a customer that are frustrated – and perhaps no sale takes place even when the firm has what the customer wants!

 

Marketing 101 tells us that the hardest thing to do is change a customer's perception (remember the old mantra “the customer is always right?”). An alternate approach in the above example would be for the sales person to say, “Why yes I have wood that doesn't come from clear cuts; I have both species X and species Y. What are you using it for?” Thus a more positive conversation is initiated, and by agreeing to the customer's interest and then pursuing their specific need the salesperson furthers a conversation that can lead to a higher quality understanding of the nature of forests, and perhaps ultimately result in both a sale and a satisfactory relationship between customer and supplier. If the customer is looking for dimension lumber, the differences in forest management practices can be explained for those species that NEED clear cuts (of some size) and those that don't. Of course this assumes a certain level of understanding of forestry on the salesperson's part.

 

Developing a basic understanding of consumer interests is not really that difficult; marketing firms have been doing it well for decades. And the major interests of consumers regarding forestry issues have been relatively consistent for many years. These interests include:

 

  • Desire to protect old-growth
  • Dislike of forest clear cuts
  • Concern over perceived loss of forestland
  • Fear of the use of chemicals
  • Fear of the use of genetically modified organisms (GMOs)
  • Concern over the loss of biodiversity

 

Perhaps rather than being THE answer to customer's concerns, certification should be recognized as simply ONE answer, and not the marketing silver bullet we might like it to be. Perhaps wood products firms need to supplement and complement certification with a clear understanding of what their customer's interests truly are, and the way that their products might address those interests and the ways the various certification systems address or don't clearly address these interests. Perhaps the education of sales professionals at wood products firms should be a high priority for those firms trying to compete in environmentally sensitive markets. Last month's newsletter included a report on the level of misperceptions students have regarding forest conditions. Unfortunately, research suggests that employees of wood products firms often harbor the same misperceptions. Knowledgeable sales people would enable the kind of discussion with a customer described above.

 

From a broader perspective, perhaps wood products firms should look at their own product lines and their customer's interests and put together marketing messages that better mesh with both. As an example, most wood grown in America could be called “old growth free” and most hardwoods could claim to be “clear-cut free.” Both those things would/could also be verified through certification.

 

In the end, the wood products industry could take a lesson from the food industry. Organic foods are the fastest growing segment of the food industry. Right beside them on that growth curve is the category of meats that includes “hormone free” and “antibiotic free.” For some, the organic label is essential. For others, the hormone-free and/or antibiotic-free message is sufficient – that is it addresses their primary concerns. And both the certified organic and the hormone free message may be essential to identifying and growing those markets where individuals are willing to pay a premium for the benefits they perceive from these claims. The key to gaining that elusive premium for the certified wood products industry may not be as simple as providing certified wood as “the solution.” It could be in first figuring out “the problem” by understanding what's important to the customer!

 

Dr. Jeff Howe

May 2006