Customer Segmentation in Sustainability Does Not Work and Here’s Why

Customer Segmentation in Sustainability Does Not Work and Here’s Why
x
Understanding Fashion Sustainability

When developing new products and services targeted to customers who value sustainability,  traditional segmentation strategies may not help us develop a persuasive communication approach. This is because the way customers respond to sustainable causes may be very personal, and connected to our own life experience. These are traits that can’t be narrowed down to a simple slogan, and in order to successfully convey our message, as marketers we need to broaden our vision on the matter.

In this post, we’re going to look at some of the most common approaches to segmentation and discuss if there may be better ways to understand customer behavior when it comes to promoting social-impact causes.

Rather than spending too much time speculating on the problem, we’d like to focus on possible solutions. As a result, we’re going to briefly survey the traditional segmentation categories that can be used to profile sustainable stances and expand on them using Jobs to Be Done theory and much more. 

The Traditional Approach: Using Customer Types

Let’s start with a quick disclaimer, traditional profiling approaches are a good starting point to approach the problem, but if used incorrectly they can easily draw us away from an understanding of our market. 

The “Personas” approach, as it’s usually called,  is a customer profiling framework that tries to create life-like images of our customers. 

Marketers try to paint an accurate picture of their target consumer using descriptive demographic data and use this information to understand customer patterns and habits that can draw insights into possible market behaviors.

Using personas can be a great way to get the conversation started within your marketing team, and share ideas and visions that need to be discussed in order to work together productively. 

Understanding your customer and his\her value system is a key component in developing a cause-marketing campaign and a foundational aspect of developing your brand positioning.

By compiling sufficient data we can create customer types, which we can use as models of behavior to be used in strategic marketing decisions. 

Following this approach the Natural Marketing Institute has created the following categories:

  • Lohas. For these customers, personal and planetary health is a priority, as sustainability is entrenched in their lifestyle. These are the heaviest purchasers of green products and many of them are early adopters and influencers.
  • Naturalities. The customers are health-driven but also consider planetary health, as a result, they qualify as strong secondary targets for natural/green consumer packaged goods brands.
  • Drifters. These customers are more green-followers, and they are newer to the “green” marketplace. Their motivations are connected to their desire to be seen “doing their part” and look for easy green changes.
  • Conventionals. These customers are practical and rational, they are driven by cost savings. They consider eco-benefits but they are secondary.
  • Unconcerneds. These customers are simply less concerned about the environment and society.

These customer types provide a lot of interesting insights that have to be acknowledged. 

  • First and foremost, this analysis shows how nuanced customer stances on sustainability can be.
  • This framework is also able to show, that in sustainability, personal health is the biggest driver of sustainable goods, as environmental issues are a not-so-close second.
  • The most responsive and lucrative sustainable customer is the LOHAS which, however, is not even 25% of sustainable customers.

These elements should be considered a foundation for reflection on a marketing strategy, and not a pre-packaged tool to assess the chances of success of a sustainable product launch. These data sets need to be complemented with a more behavioral understanding of the sustainable customer.

So, what can we do, to use this information more productively? Well, we can start by not spending too much time and effort on the customer and start spending more time on understanding the job. This is also what is argued by Clayton Christensen in the Jobs to Be Done Theory. 

Want to know more? This is what we’re going to discuss next in our post. 

Use Jobs to Be Done Theory to Focus on the Job, Not on The Customer

Jobs to be done theory provides a very insightful understanding of market behaviors by acknowledging a fundamental truth. 

For as much as we can understand our customers, their descriptive traits are –  at best –  a weak predictor of their market behavior. 

If instead, we try to understand in depth the problem they are trying to solve, then we are going to understand much better how to develop our products and how to communicate them effectively. 

Jobs to Be Done is also very effective in simplifying the types of motivation that bring customers to market, by identifying three essential jobs that customers are trying to get done:

  1. Functional Jobs. These are practical problems that we are going to overcome by employing practical tools. 
  1. Social Jobs. These are problems connected with the customer’s role in society, and with the social currency that comes with it. 
  1. Emotional Jobs. These jobs are instead connected to the emotional rewards that customers get from owning or accessing a product. 

The truth about sustainability is that unless we understand how our sustainable goals fit with the jobs that our customers are trying to get done, it will be very difficult to influence their behavior. 

This is because, in the light of the NMI segmentation –  discussed in the previous paragraph – only a minuscule percentage of our potential customers would act against a cost-benefit approach to support a sustainable or social cause. 

If instead, our sustainable goals are well-aligned with the goal that customers are trying to achieve, sustainability is not a sacrifice, but an improvement of the solution. This as a result will allow us to have a much more impacting campaign, which will resonate with a much broader audience. 

As many customers are now becoming more and more desensitized from the harsher, guilt-oriented communication patterns, marketers really need to rethink the way they convey their sustainability messages to stop focusing on negative emotions and show how sustainability is an enhancing feature of any product or service being offered. This is better able to get customers behind a cause, where they want to be part of the solution.

The lack of effectiveness that is usually connected to social or environmental impact-oriented communication strategies may also come from a misunderstanding of the types of communications that interplay within the customer journey, and how each message, tone of voice, and content typology has a precise place in the customer’s experience of a brand.  Managing all these overlapping communications can be a challenge.

We’re going to address this next in the next paragraph.

Sustainability Messages Are Not Effective At the Customer Journey Stage

In order to deliver an effective marketing strategy, we need to take into account the fact that customers approach their purchase decisions following a simple 3-step process: awareness, consideration, and purchase.

At each stage of the journey, customers are more likely to respond to specific communication types. We can break down this concept as follows.

  • At the Awareness Stage. Customers want to be informed and entertained. At this point, in fact, any sales-oriented communication would be wasted as customers are not actually willing to buy anything, but are instead simply trying to understand a problem better. This is where the bulk of sustainable cause communication can be found. However, this is only the beginning of the communication strategy and many other communications will interfere with the customer’s decision process.
  • At the Consideration Stage. This is when customers have shortlisted the companies or products that could potentially solve their issue, and a comparison can take place to choose the one which is better suited to fit the job. In this case, however, we need to remind ourselves that customers are looking to solve a problem, not buy a product. The problem can be solved in many different ways, with products coming from different industries. A need to show off status, for instance,  can be satisfied by buying a luxury car, or by purchasing a tailored suit. At this stage, sustainability can still have an influence on communication, as customers could consider the support of environmental causes a point of difference between competing brands.
  • At the Purchase Stage. This is when the situation can become problematic as every economic model in business suggests that customers – according to classical economics – look for the best cost-benefit relationship when spending money. This is where economical convenience, despite our best efforts,  can steal our customers away and have the last word. This is why our message needs to be so well aligned to the values of our customers that we can attempt to downplay the price, and have them respond “inelastically” to our product\service offer – which means that they would buy from us regardless of the cost of the purchase. 

Getting customers to buy regardless of the price can be done with excellent marketing, by leveraging and packing together all the needs customers can have: functional, social, and emotional so that the value being offered can overcome pricing issues. It’s a challenge but can be done. 

However, there may be customers, that – still according to NMI segments listed above – are still “unconcerned” with sustainable issues. What then? 

Well, in that case, we need to change a habit, and we’re going to do that through the use of incentives, which we are going to discuss in the next paragraph.

Also, if you’d like to explore better how the development of a brand strategy can take form, using the customer journey as a marketing framework, we’ve got the perfect resource for you: Develop a Branding Strategy for Your Fashion Brand in 4 Steps. 

Change Needs to Be Incentivised

Last but not least, as we’ve discussed in the previous paragraph, if we need to get customers out of their habits and long-term patterns, we need to incentivize them to change. 

Incentives can come in many different forms, examples include cost reductions, buyback programs, social badges, and more. 

Breaking a bad habit is really hard to do and brands who want to change customer behavior need to be creative. Nudie Jeans and their 6-month-no-wash jeans “challenge” is a brilliant example of how this can be done creatively, and how rewarding, meaningful, and memorable the experience of changing can be for your customer. Nudie Jeans, in fact, by posing this challenge to customers, is trying to change their perception of cleanliness and water consumption. If customers are able to refrain from washing their jeans for 6 whole months, their jeans will pick up a series of nuances and discolorations which will be unique to the user, because of the normal wear and tear. This will make sure each pair will be unique.

In marketing, we say that it’s much more expensive to acquire a customer, rather than to retain one. The reason why acquiring a new customer is more expensive is because of the soft or hard lock that can keep a customer from changing a habit. A soft lock is connected to simple psychological motivations, which essentially relate to laziness. A hard lock is instead friction which is due to some material obstacle that prevents us from switching service or product providers.

If you’re in the market of changing habits, then realize that change needs to be incentivized. That’s the challenge. Don’t worry though, if you get it right, the rewards can be really remarkable and can take very interesting forms, like being able to run a no-budget marketing campaign. 

Great, now that we’ve covered all bases, it’s time to draw some conclusive remarks.

Conclusions

As we’ve seen in this post, sustainable marketing strategies connected to descriptive segmentation and profiling are quickly becoming a thing of the past. 

In order to push such relevant and urgent causes like the ones connected to the environment and society, marketers need to hone their tools and move past the guilt-oriented communication which over time has desensitized customers or in some cases moved away entire groups of users by making sustainable choices look like lesser options for customers. 

In cause-related marketing, we need to start portraying the right associations between brands and broader social and environmental issues by:

  • Using profiling and segmentation as the beginning of a conversation that focuses on understanding the jobs that customers need to get done, rather than understanding who our customers are, as this latter piece of information is not very helpful or predictive of their market behavior.  
  • Making sure that marketers are planning their communication strategy based on the customer journey so that sustainable causes are communicated at the right point of their brand experience. This should also make us think about how difficult it can be to override the low prices that come at the purchase stage.
  • Following the previous advice, to “fight fire with fire” we need to acknowledge the importance of incentivizing change. This – however – can come at the cost of our own profitability as a company. As a result, our organization is the one that really needs to commit to the cause, if it has any hope of changing customer behavior and bring long-lasting change. 

This is why in order to escape the trend set by greenwashing companies that only follow sustainable causes for the sake of their communication strategy, organizations who are serious about making change happen, need to build a business model which is impact-first. 

If you’d like to read more about impact-first business models, here’s an article that discusses impact-first organizations in more detail: Five Business Models to Pursue Social and Environmental Change. 
If you’re interested in learning more about cause-related marketing, sustainability, and much more, don’t hesitate to take a look at our blog, which is filled with free resources for you to discover. Enjoy!

Was This Helpful? 🤓 

Customer Segmentation in Sustainability Does Not Work and Here’s Why In this article, we move past the traditional 'customer profiling' approach in order to understand what types of marketing approaches really work.
5 1 5 1

Sources and Further Research

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest

MORE ARTICLES FROM OUR BLOG