How to reduce the sustainability price premium

A majority of consumers are willing to pay a premium for sustainable products. But while people are prepared to pay up to 12% extra, the reality is that these products cost on average 75% more than standard goods. This ‘green gap’ cuts out a large group of customers who can’t afford to shop ethically.

Right now, the cost-of-living crisis is driving people to deprioritise ethical consumption, and a sustainable future is becoming even more remote. As marketers, it is on us to act immediately to reduce the sustainability premium, and make sustainability the norm rather than the exception.

Georgina Murray-Burton, Head of Strategy, and Frank Lawley, Commercial Director, have co-authored an insightful piece for WARC outlining how this can be done.

The full piece is behind a paywall, but our key takeaways are here to enjoy:

1: Create demand for your sustainable product by building your brand, not just pushing your product. This will help address the price-to-value equation so consumers are prepared to pay more of a premium.

2: Look beyond sustainability as your sole selling point when building your brand according to your values. Meet the more far reaching and fundamental needs of consumers. What makes you meaningful to them and what sets you apart from others?

3: Once you’ve increased demand for your product, use the extra sales to reinvest in creating value for customers. You’ll reap the benefits through opening up new customer segments.

4: Align your customer benefits with benefits to the environment. Customer experience can open up new sources of value for them while supporting your brand’s promise and deepening your credibility in the sustainability space.

5: The planet needs collaboration between businesses, not competition. To create the shift we need to see, bigger brands have the power to give smaller ones a leg-up.

The whole piece is on WARC’s website here:https://www.warc.com/content/paywall/article/warc-exclusive/how-to-reduce-the-sustainability-price-premium/en-GB/155581