Becoming a ‘for purpose’ or purpose-led business can elevate your brand above your competitors in the mind of the conscious consumer. But not all conscious consumers are the same. Some consumers may be totally committed activists for the cause, while others are sympathetic and would prefer to do the right thing, but their purchasing decisions are still primarily driven by other factors such as price or convenience.
The Conscious Consumer Report 2021 reported that 62% of Australians surveyed say they have re-evaluated their priorities in life as a response to the pandemic. According to the report, Australian consumers want companies and brands to not only address their impact on society and the environment, but be agents for change. The Consumer Insights Report for 2022 from the Commonwealth Bank revealed that 33% of Australian consumers are more likely of purchasing from purchase-led brands than before the pandemic. The Commonwealth Bank report also stated that 53% of consumers are prepared to pay more from a purpose-led business.
Carolyn Butler-Madden, Chief Purpose Activist from the Cause Effect, points out, however, that factors such as pricing and quality will always have an impact on the purchasing decisions made by a consumer, though ethics is becoming an increasingly important factor in choosing one product over another. She comments, “In any purchasing decision made by a consumer, pricing and quality are non—negotiable. There are people who will pay a premium for things like Patagonia and similar brands. But pricing and quality are non-negotiable, they’re the entry point in considering what products and services we as consumers will buy”.
There is an increasing need for Australian companies to take notice of the rise in consumer or ethical consumerism. Unfortunately, when it comes to engaging the conscious consumer Australian companies are behind compared to their US and international counterparts, though that is changing slowly. Butler-Madden says, “In the US conscious consumerism and for-purpose business are growing exponentially. It’s really picked up steam in the last couple of years. Here in Australian we’re a bit behind. It’s changing, but it’s not happening as quickly as in other parts of the globe.”
“But the interesting thing is, when you start looking at where consumers think businesses should focus to enhance their reputation, there is more emphasis being placed on social purpose than factors such as convenience”.
Butler-Madden in collaboration with Digital Storytellers has developed a purpose maturity curve that can evaluate where an organisation is on its purpose-led journey, “We use this tool to help organisations understand the huge opportunities in moving up the purpose curve; the risks in relation to not moving up; and the myths which keep them at the level that they already are. Unfortunately, a lot of big businesses are stumbling on their purpose-led journey and are failing to meet the current expectations of customers around social purpose and impact”.
Who is the conscious consumer?
Conscious consumerism refers to consumers making purchasing decisions that they believe will have a positive social, economic, and environmental impact. Elisa Adams, CEO of Sprout Strategy says, “a conscious consumer is somebody who is consciously thinking about what their consuming and how they’re consuming, and how their purchasing decisions are impacting society and the planet. 80 – 90 % of people we survey in Australia have some level of intention to consume consciously”.
Conscious consumers want products that are environmentally friendly, ethically made, and socially responsible. They may also be interested in learning more about the companies and products they purchase and supporting those that align with their values. Additionally, conscious consumers may be more inclined to purchase products that are locally sourced, organic, and non-toxic. Madden-Butler says, “Conscious consumers are people who seek out and choose brands based on ethical considerations, whether that’s how sustainable they are or how much they’re contributing to positive social impact. Or how well aligned the brands’ values are with their own.”
What motivates the conscious consumer?
When creating experiences and crafting messages brands need to understand the different categories of conscious consumers as well as the differences in the factors and motivations guiding their behaviour and purchasing decisions. Adams says, “From our research, we’ve identified two categories of conscious consumer. There’s the one whom we have called the activist, who is very driven by the cause they support and will actively seek out the businesses and organisations who support their values. And there’s another, much larger group, who are more passive. They want to do the right thing but the real motivation for them is more, ‘what it says about them’, rather than a commitment or espousal to the cause.”
“As opposed to being an activist, who is really about supporting the cause to make the world better, the second category, yes, they want to do the right thing, but it is more about how it makes them look to be seen supporting the cause. How you engage with these two groups needs to be different. For the first group, it’s about what the brand is doing to support the cause, for the second group it’s about how using the brand’s products or services makes the consumer appear. This second group is unlikely the effort to seek you out based on your commitment to a cause.”
“The second group needs messaging around what it does it do for them and we need to find ways to make it really easy for them to engage. They’re borrowers rather than activitists who will use the brand of a business – actively engaged and promoting their involvement in a cause – to make it look like they’re doing the right thing. They want the brand to do all the heavy lifting so they can borrow the credentials from the brand.”
One brand that is very effective at engaging and creating messages for the second group of followers is Who Gives a Crap. Their messaging constantly prompts customers to think about their positive impact on sustainability and solving the world’s problems. Rather than talking about what they are doing to make the world better, they cheer their customers on for participating in their mission in a way that’s informal and humorous.
Butler-Madden believes that understanding what the conscious consumer wants is fundamentally tied to identity or what people want to think about themselves and how they want others to perceive them. She says, “Even for the most ardent activists who want to hold brands to account, it’s about their identity and how their behaviour defines their self-perceptions concerning the values they profess.”
How to engage the conscious consumer
To engage the conscious consumer, brands need to demonstrate a genuine desire to do good in the world as well as communicate this. The Commonwealth Bank research revealed, however, 55% of consumers believe purpose-led firms are intent on making money rather than advancing a genuine purpose.
Greenwashing, a company’s attempt to promote false or misleading information about its commitment to the environment, can have a very detrimental impact on a brand’s reputation and the loyalty of customers who made their purchasing decisions based on fake ethical credentials. Butler-Madden advises, “You have to be careful of greenwashing. Being caught out can lead to a PR nightmare. Companies need to take action in as many places as they can within the business. It can be operationally, it can be through marketing, and it can be in all sorts of different ways through their products and innovation. And they need to help their customers start making the shift as well”.
There are a number of specific things, according to Adams and Butler-Madden, your organisation may do to engage and attract conscious consumers, including:
- Transparency: Provide clear and detailed information about the products, materials, and manufacturing process, as well as any certifications or standards the company adheres to.
- Sustainability: Offer sustainable options, such as eco-friendly packaging, energy-efficient manufacturing processes, and products made from recycled or biodegradable materials.
- Social responsibility: Communicate about the company’s commitment to social and ethical responsibility, such as fair labour practices, community engagement, and charitable giving.
- Certifications: Obtain certifications from recognized organizations, such as Fair Trade, Rainforest Alliance, or B Corp certification, that demonstrate the company’s commitment to ethical and sustainable practices.
- Education: Offer educational resources, such as blogs, videos, or webinars, that inform and educate conscious consumers about the impact of their consumption choices.
- Community engagement: Create a community where conscious consumers can connect and share information, and also provide an opportunity for them to give feedback and suggestions.
- Personalised customer experiences: Offer personalisation options, such as customised products and subscriptions, that allow conscious consumers to create a unique product that aligns with their values.
- Invite your customers to contribute to the positive change you’re creating in the world. Instead of telling people what good you do, give them ways to contribute to your movement of change.
- Reward and promote customer efforts and commitment: Reward conscious consumers for their sustainable choices with discounts, rewards, or loyalty programs.
Customer-centricity and customer experience success are fundamentally about a brand living up to its promises and aligning its values and mission around the needs and expectations of its customers. With conscious or ethical consumerism on the rise, there is an increasing need for brands to understand the behaviour, motivations and expectations of the conscious consumer.
Acting ethically has the potential to improve customer loyalty and lifetime value as well as being a critical way of differentiating the brand’s value proposition from competitors. But it needs to be based on an authentic commitment to transparency and doing the right thing.
About Carolyn Butler-Madden
Author, speaker, podcast host and Chief Purpose Activist at B-Corp certified Purpose Consultancy, The Cause Effect, Carolyn Butler-Madden believes in a world where business is a force for good and brands drive profit through purpose. Her mission? To make social purpose, a vital part of business in Australia and beyond.
About Elisa Adams
Elisa is curious and passionate about understanding Australians and using this knowledge to build a better tomorrow. Having spent over 30 years studying Australians and consulting with some of Australia’s largest organisations, she enjoys bringing the latest thinking on research, strategy, behavioural science and tech, to our shores from around the globe.