Increasingly, customers want corporations to:
A major shift has taken place in the relationship between corporations and their customers. Customers no longer just care about a basic transaction; they want to feel good about whom they give their business to. And they can give more of their business, and feel more loyal, to companies they feel share their own commitments to preserving the planet, treating people positively and to conducting business with integrity.
It begins with primary and secondary research. Consider the data you have about the customers and the data you need to truly understand their behavioral and attitudinal preferences. Consider leveraging first party data and engage with loyal customers to see where their preferences lie. Supplement that with third party data to more deeply segment your current and future customers.
You’ve done the research and learned what matters to every segment of your customer base. Now, it’s time to see where your ESG commitments align with their priorities and create seamless programs and experiences that differentiate you from competitors and endear you to your shoppers. Strategies must be a part of your everyday business to demonstrate a genuine commitment to these principles.
(less than 1 in 4) of consumers say the main reason for ESG pledges is to "do good."
For more information on how your ESG programs can help increase customer loyalty,
Effectively articulating your ESG investments to customers can drive loyalty and increased engagement through value alignment.
Values +
Those sentiments dovetail well with government and investor requirements that corporations report on ESG commitments. Companies that properly communicate their commitment and their corresponding action can not only strengthen loyalty with their existing customer bases, but also attract new like-minded customers.
of consumers believe that companies should be actively shaping ESG best practices
The Basics of ESG
Good citizens want to do business with good citizens.
What does ESG include? Many companies have already implemented environmental strategies to reduce carbon emissions, manage water use and ensure their products and services can be sustainably maintained. Social issues revolve around diversity and inclusion, employee relationships, health and safety and social justice. Governance comprises ethical business practices, including complying with regulations, sourcing, data privacy and honesty.
It’s about running a responsible and responsive business for the long term. It’s about connecting your business to societal impact to create sustainable business advantage and value.
of the 2,000 largest publicly traded companies in the world by revenue have committed to a net-zero strategy (Net Zero Tracker)
What Customers Want
Companies need to consider where their ESG investments are and determine how to engage customers in a conversation that resonates.
The generational transfer of wealth to millennials, who are more concerned about corporate sustainability and governance than their parents and grandparents, had already compelled a focus on ESG. COVID-19 demonstrated to all how interconnected the planet is. But not every component is important to every customer. For some, diversity and inclusion may matter more than environmental concerns; for others, the opposite may be true.
Then decide which criteria apply most closely to your business and align with your own brand positioning, messaging and positioning in way that can make the most impact on your audience, be they customers, employees or investors.
into ESG-impact funds in 2020.
Take Action
Once a company learns what matters to its customers, it must determine a plan of action.
Then, you must communicate these to your customer by creating a dialogue, which leads to community. Traditional media, social media, loyalty programs all can be used to communicate your plans, actions and results, especially if done in an entertaining manner. Lead by example, ask their opinions on and to participate in you plans, and reward them when they do. In that way, you won’t just create a loyal customer, you’ll create a life-long partner. Authenticity helps build trust.
Align with its own and its customers’ values;
Believability
Communication and authenticity can be key to overcoming skepticism and building loyalty.
Recreation
With this in place, the programs will encourage shoppers to deepen their relationship with your company. They’ll be proud to do business with your company — which gives you another opportunity to reward them in various ways through loyalty programs that offer discounts, bonuses and more that matter to them. The cycle will continue to the benefit of all.
With so much access to information (and disinformation) today, customers can easily find out if a company is half-heartedly committed to environmentally friendly production (or even greenwashing by false sustainability claims) or diversity and inclusion. Consistent action, reporting and communication is critical to building and maintaining loyalty.
Act today.
Protect the Earth
Treat their people (including suppliers, employees, customers, communities and others) fairly and with respect; and
Operate their business ethically regarding leadership, executive pay, internal controls and shareholder rights.
of consumers said they are more likely to buy from a company that stands up for environmental causes.
of consumers say companies should do more about corporate governance (PwC survey)
of millennials are interested in being rewarded not just for purchases from brands, but for engaging with them. ESG is an opportunity to engage customers around a set of shared values.
say that the motive for companies is self-interest: to build trust with them, the consumers.
Deliver on quality.
Plans must...
of consumers say they will stop buying from companies that treat the environment or people poorly.
83%
76%
622
54%
$51 BILLION
Investors poured
80%
Be achievable, measurable and communicable; and
Be accurate.
80%
24%
39%
Only
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Communication
Loyalty
Act and be seen fulfilling those values.
Employ initiatives that embrace multiple aspects of ESG at once.
4 Keys to Believability:
Build a strong identity that customers can share.
83%
76%
80%
A leading athletic apparel brand based on its belief that sports benefit the world, promotes diversity and inclusion, invests in their communities and offers shoe refurbishment and recycling. It has published targets for its sustainability and inclusiveness initiatives and linking their progress to the same efforts its athletes shoppers are trying to achieve.
A top manufacturer of “clean” cosmetics and skincare, advocates for responsible sourcing and sustainable packaging. It has created a list which delineates 1.800 questionable or potentially harmful products that are never used in its formulations, was just one effort that educates its consumers and drives even greater belief in its commitment to healthy beauty.
One prominent footwear company has long said that its purpose was less about selling footwear than creating a business that improves people’s lives. It continues its “One for One” tradition of donating footwear and eyewear/eyecare services for each item sold, donates one-third of its profit and reports the numbers.
An outdoor living retailer has achieved its 14-year carbon neutrality agreement and plans to half its carbon footprint by 2030. Even more important, it actively communicates its goals and success to its shoppers/members by issuing yearly updates, working with entrepreneurs, and each year rewarding its members with a share of its profits.
Athletic Apparel
Beauty
Footwear
Discover how companies in some of today's top segments are managing ESG to their advantage by clicking below:
It is also critical that these programs have clear benchmarks and goals so that their success can be measured and communicated consistently to stakeholders and customers. The results will be greater efficiency in your operations and more goodwill from your customers, building their loyalty.
It is also critical that these programs have clear benchmarks and goals so that their success can be measured and communicated consistently to stakeholders and customers. The results will be greater efficiency in your operations and more goodwill from your customers, building their loyalty.
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into ESG-impact funds in 2020.
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(less than 1 in 4) of consumers say the main reason for ESG pledges is to "do good."
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© 2022 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general purposes only, and should not be used as a substitute for consultation with professional advisors.
Sources: 1 Beyond Compliance: Consumers and Employees Want Business to Do More on ESG (PwC); 2 https://zerotracker.net/, 3 PwC, Future of CX, “Experience is Everything. Here’s How to Get It Right”, https://www.pwc.com/us/en/zz-test/assets/pwc-consumer-intelligence-series-customer-experience.pdf; 4 Morningstar; 5 PwC and Salesforce Usher in New Era of Customer Loyalty Programs with Focus on Experience; 6 The Complexity of Trust: PwC’s Trust in U.S. Business Survey.