The Role of Sustainability in Customer Loyalty

January 4, 2021
The Role of Sustainability in Customer Loyalty

It’s no secret that cultivating loyalty from your existing customers is lucrative: it costs five times more to recruit new customers than retain current ones, and customers are known to spend 67% more in their third year than new patrons. But how do you make sure your customers stand by you? Nowadays, the answer points overwhelmingly towards sustainability.

In times gone by, you could rely on the quality of your product or service alone to do the heavy lifting to ensure customer loyalty. Nowadays, the pressures of commoditisation, globalisation and market saturation means incorporating sustainable values is a key success factor. In this article, we’ll look at the ways sustainability can help cultivate a long-lasting and gainful relationship with customers.

Role 1: Sustainability Aligns with Customer Values

For your customers to become loyal, they have to like you. And like any long-term relationship, it helps if you have shared values.

Obviously, the value we’re talking about here is sustainability. This is far from a niche passion: research shows more than two-thirds of consumers consider sustainability when purchasing. 47% of consumers would pay more for a sustainable product, and over one-third would pay 25% more. That number is only going to rise: Gen Z is a relatively new buying group, yet 68% made an eco-friendly purchase in the past year, and they are more concerned about sustainability than any previous generation.

But does that translate to loyalty? Short answer, yes. According to a 2020 survey, customers are most likely to return to a brand for the product’s quality, but sustainable business practices come a close second. In fact, 68% of consumers say they’re motivated to be loyal to a brand by knowing that they share the same values.

To drive loyalty, you need to identify with your customers on an emotional level. Emotional involvement is a key factor in good customer experience, and sustainability addresses a range of sensitive, complex and serious issues that modern consumers care deeply about.

When you consider that by the end of 2020, customer experience is predicted to overtake price and product as the key brand differentiator, delivering that emotional common ground in the form of commitment towards sustainability is the obvious step for fostering genuine customer loyalty.

Role 2: Sustainability Helps Customers Uphold Personal Values

Sustainability isn’t just about switching your own business practices to become greener: modern customers want you to help them behave more sustainably, too.

As more brands wake up to the emotional pull of sustainability, consumers are becoming increasingly savvy about “green washing”- i.e. when a company gives the false impression of environmental positivity to boost sales. Customers are looking for authentic brands, and the brands that stand out are ones that don’t simply promote their own sustainable practices, but help their patrons make their own difference.

An example of this is curbing single-use plastics. Before the coronavirus pandemic, eight out of 10 consumers were trying to reduce their plastic waste, and that number hasn’t faltered: in a covid survey, 85% of consumers said they were committed to turning down plastic utensils, while willingness to use long life bags rose by 21%. Companies that are able to support this behaviour by minimising customers’ contact with single-use plastics are poised to foster the strongest connection with them.

One example comes in the form of food and drink companies who switch to high-grade paper straws instead of plastic straws for drinks. Choosing a high-standard spiralled design that lasts up to 3 hours when immersed in liquids is a clear quality differentiator from outdated soggy straws, but it also matches the customer’s personal commitment to cut out single-use plastics as much as possible.

Another example is packaging, where brands are stepping up to use recyclable materials – or using packaging smartly so it has another purpose for the customer beyond protecting the product.

For these companies, supporting their customers’ choices doesn’t just demonstrate that their beliefs align, but it allows loyalty to become an outward manifestation of their customers’ own personal values.

Role 3: Sustainability Helps Customers Become Brand Advocates

Brand advocates are big proponents of customer loyalty. Shoppers who are referred to your brand by a friend’s recommendation are known to have a 3-5 times higher conversion rate, with a 16% higher lifetime value. They’re also four times more likely to refer yet more customers to your brand.

Sustainability plays well into this. Demonstrating shared values and helping the customer act sustainably enhances the emotional aspect of customer experience, and 72% of customers will share a positive experience with 6 or more people. Incorporating sustainability therefore increases the likelihood of customers becoming brand advocates – but as a sustainable company, there’s even more you can do to foster genuine brand advocacy and lasting customer loyalty.

It comes down to something called “social proof”. This is a psychological phenomenon where people incorporate others’ actions to reflect desired behaviour. This is often what’s going on in successful customer recommendations – but being a demonstrably sustainable brand also makes purchasing from you a desirable behaviour in itself; a signifier of positive characteristics.

In English? More of us than ever care about sustainability. Buying sustainable products or patronising sustainable businesses demonstrates what you value – or traits you find desirable. And that makes it something you’re more likely to flag to peers.

Ethically-produced menswear label Taylor Stitch puts their mission front and centre: “10 years ago we set out to make a better-fitting shirt. We did that. Today we’re interested in building a better, more responsible company.” This makes it easy for customers to align – and makes sharing the message with others attractive. The brand goes a step further by offering 20% off a new customer’s purchase and rewarding brand advocates with a voucher.

There are currently over 3.7 billion active social media users, and the explosion of connectivity combined with rapid news coverage means global issues are impossible to ignore. Today’s customers are researching the impact of their purchases. Demonstrating authenticity as a sustainable brand engenders trust, but also can also capture the imagination: did a shift towards sustainability result in a positive environmental impact? Do your new straws reduce single-use plastic?

By clearly conveying these changes to your customers, you help them take ownership of your sustainable changes, and give their brand advocacy tangible positive effects.

Conclusion: Sustainability for Longevity

In volatile times, sustainability offers a future-proof strategy for businesses that’s attractive to everyone, from record numbers of investors looking for resilient growth, to customers hoping to make a difference.

It goes without saying that a long-lasting company is a prerequisite to lasting customer loyalty – and reliable revenue streams are a good way to make sure of that. Making sustainable changes now offers a way to genuinely connect with customers through shared values and create a positive relationship with them that can be very lucrative, from increasing conversion to multiplying referrals.

It boosts customer loyalty in the short term – and as your company endures into an ever-more environmentally-aware future, it ensures lasting customer loyalty in the long term, too.

Photo by Joshua Rawson-Harris on Unsplash

This article was previously published at CustomerThink