The Green Customer Imperative

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Green and eco-friendly policies were once on the fringe, but demand has risen dramatically and created a cycle of affordability, which in turns increases demand even further. Millennial customers in particular have a new set of expectations, and are increasingly demanding eco-friendly policies before handing over their cash. Companies ranging from fast-casual restaurants, to home builders and energy companies are responding to this demand with new goods and services and a “green” strategy geared towards driving new customers and retaining existing ones.

The Smart Energy Consumer Collaborative (SECC) analyzed its consumer surveys to learn more about millennials and what they think about energy efficiency, renewable energy sources and other issues. According to the study, millennials are more willing to pay higher prices for environmentally-friendly services, and are more willing to invest in renewable energy programs compared to non-millennials.

The growth of solar and other alternative energy sources for example, is being driven not just by customer demand for it, but by new legislation. Recently, California became the first state in the U.S. to require all new homes to install solar panels. The California law, while somewhat controversial, still underscores how solar has moved firmly into the mainstream. According to the California Energy Commission, the move will add about $9,500 to the price of a new home, which is causing some worry in a state which has already some of the highest real estate prices in the country. However, the Commission also notes that the higher sticker price would be offset by an estimated $19,000 in energy and maintenance savings over 30 years.

Those buying new homes are especially attuned to eco-friendly policies, in terms of energy-saving construction, and things like smart thermostats and other devices. According to the U.S. Green Building Council, $224.4 billion in green construction is projected for 2018. Solar is playing a big role in meeting these customer demands, and in marketing, too. Companies are seeing a triple benefit from going green – they are meeting a burgeoning customer need, they often are able to save money and take advantage of tax credits, and they are able to use their new policies as part of their branding and marketing campaigns. Sustainability sells, and smart public-facing companies make sure that they are not only using green practices, but that their customers and potential customers are aware of it.

At Outdoor Solar Store, based in environmentally aware Golden, Colorado, that’s meant more business from small and mid-sized companies too. “They’re not just looking to greenwash operations to keep clients and consumers happy and protect their profits,” said Dan Kennedy, of Outdoor Solar Store. “They want their stores and fitness gyms and restaurants to walk the walk, and they want the benefits that come with that for everyone. What’s really taken off is the degree to which customers drive transformation but B2B is delivering it.”

Newer startups are getting into the act as well, driven by the environmental awareness of younger startup entrepreneurs, as well as the growing consumer demand. Startup Sheets & Giggles‘ founder Colin McIntosh saw an overwhelming demand and filled it, launching his line of bedsheets made with eucalyptus fibers instead of cotton on Indiegogo. “By launching with a crowdfunding platform, we were able to tap into a collective mindset of consumers who have a new set of expectations,” said McIntosh. “The need is obvious. We met our initial funding goal within four hours of launch. In younger audiences especially, environmentally-friendly practices play a larger role than ever in buying decisions.” McIntosh notes that eucalyptus is far more sustainable than cotton, which requires large amounts of water and agricultural pesticides.

Even fast-casual restaurants, often seen as a source of tremendous volumes of waste, are getting into the act. “There are two things that are powerful that we do to bring customers back,” said Seth Hirschel, co-founder of franchised Salsa Fresca Mexican Grill, a chain of fast casual restaurants in New York and Connecticut. “Obviously, they love the food. But they really care about the dedication to what we’re doing towards the planet. And we see that in every store.” Salsa Fresca’s eco-friendly policies range from compostable bowls and forks made from plant starch, to the buildings themselves, which use energy-saving lighting and HVAC units.

The Small Business Administration agrees – customers want green, and small business owners are using green policies to control costs, attract customers, and become socially responsible. In the franchising sector, there are several ways to take full advantage of the movement. Organic food sales for example, are growing faster than mainstream food, and green franchise opportunities are leading the way.

Customer demand is there, and companies must respond as we move into a new normal of eco-friendly business practices. Today’s customers want more than a good product at a fair price – they want to save the environment, too. That must be factored into every marketing plan in the years to come.

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