An interview with Philip Graves, our expert in consumer behaviour

Paula Papp, an associate director in our strategy practice, spoke with Philip Graves, our lead expert in consumer behaviour, about people’s perceptions of sustainability and the implications for the design of an economically sensible sustainability strategy.

Philip is a consumer psychologist who founded the behavioural insights agency Shift Consultancy in 2005. He has been an associate of Frontier Economics for over a decade.  Philip’s 2010 book Consumerology has been translated into eight languages and was named one of Amazon’s top ten business books of that year.

Paula: Sustainabilityis a hot topic for many companies now. They’re not only trying to reduce their environmental impact but also dedicating lots of resources to showcase their efforts to stakeholders. As a specialist in consumer behaviour, do you believe making sustainability efforts as salient as possible is a good business strategy?

Philip: The short answer is no. In this age of fragmented media and where consumers have the attention spans of fruit flies, it’s already difficult landing any message with your target audience. So trying to promote an additional message around sustainability further reduces the chance that others will cut through. To be productive, a sustainability message needs to connect with what matters to most consumers making a purchase decision, but it is rarely of paramount importance: do people want the most sustainable chocolate bar or the tastiest? Are you buying that £10,000 watch to signal your concern for the planet or your elevated status as a human being? Do you want those headphones because they use recycled components or because they make it sound like Taylor Swift is singing inside your head?

Beyond that, sustainability messages are fundamentally complex. In modern developed economies, most consumer purchases are much more about desire than genuine need. Unless there is behavioural evidence of a strong consumer desire to prioritise sustainability in a particular category, conveying exactly how and why your product or service is more environmentally virtuous is often very difficult to do. And it’s even harder to do in a way that is engaging to people who have 24/7 access to TikTok!

Paula: What sort of associations do you expect consumers to have in relation to “green” or “sustainable” products? And what are the factors that explain why these associations can be positive or negative depending on the specificsof a product or service?

Philip: The associations that green or sustainable products have vary enormously from one market to another. In some instances they are so far removed from the motivations, drives and desires involved in a purchase that they are irrelevant to most consumers at inflluential points in the purchase journey. In these situations, the way the mind works is to unconsciously filter out things that don’t connect to what it is seeking; so an inappropriate message can work like camouflage!

In other instances, however, green may connect strongly with desires that do influence a large proportion of consumers. For example, when ‘green’ credentials are linked with energy saving, they are often associated with cost saving. Connecting with this psychological desire broadens product appeal well beyond those who are motivated by the idealism (in a psychological sense) of sustainability.

And sometimes consumers will associate sustainable products with greater expense. In these situations we tend to see these products performing relatively well when the economy is strong but being discarded quickly in favour of better-value alternatives when times get hard. However much people can appreciate what’s happening on a global level, it’s understandable from an evolutionary psychology perspective that they are focused much more on what one might call their "personal environment".

Paula: We’ve discussed on many occasionsone of the premises of behavioural economics: “Do not ask your clients, observe them”. The underlying reason for this is that in a significant percentage of our decision making we do not think and then act, but just act. And if we’re asked, we’ll provide an explanation that post-rationalisesour behaviours, or fits in with the response that we think is expected of us. But if we can’t ask these questions, how can companies tell if it’s good or bad for them to highlight their sustainability efforts?

Philip: It’s certainly the case that asking consumers is perilous. For good reasons, we hear a lot about environmental issues in the mainstream and social media. As a consequence, if we’re asked about the topic’s importance the associations that come to mind are strong, and we’re likely to say that we are concerned. This availability bias also results in people claiming to consider and prioritise green values in consumer contexts. However, if you observe behaviour you usually see that people aren’t making purchase decisions with sustainability in mind.

I recommend considering the following three questions to identify whether or not promoting an organisation’s sustainability activities with consumers is worthwhile:

1. Does it have the potential to differentiate you from your competitors in a motivating way?  If the answer is “no” I would argue that you don’t need to consider the remaining two questions. There’s nothing to be gained by being known as a sustainable brand if you're losing market share!
2. Is it something your target audience demonstrably thinks about at the moment of purchase, as opposed to when you ask them about it in the artificial context of a survey or focus group?  If they don’t think about it you may have a significant behaviour change challenge, particularly if there’s a lot of habitual buying behaviour around your product or service.
   The place to start here is with an analysis of existing behaviour. What does the behavioural data show people are doing and, with the right insight techniques, what can you unpick as driving that behaviour at an unconscious level?
3. Can you actually convey what you’re doing in a sufficiently simple and/or engaging way to land that message in any given communication context? It’s one thing to have a goal for communication, but all the evidence from behavioural economics points to the fact that how you communicate something is as important as what you communicate. This requires a careful approach to testing for the availability bias reasons mentioned previously. It’s easy for consumers to say they would appreciate a message, but quite a different thing for that message to actually influence a purchase decision. Ideally, live trials with different messages would be used. If this isn’t possible, qualitative techniques that recreate purchase contexts and simulate buying decisions offer a more psychologically valid approach than standard research.

One other point that’s perhaps helpful to consider is that, often, behaviour drives attitudes. So if you can make it easy for consumers to act in a way that is more sustainable and then let them know that that’s what they’re doing, you may be able to shift how people think about what they buy in a particular context.

Paula: Some people claim that companies have a moral responsibility to do whatever it takes to be as sustainable as possible. Do you agree?  

Philip: I don’t agree because I think that’s far too simplistic. Of course, being environmentally responsible is important, but that agenda can’t be pursued at any cost because the impact of doing so will ultimately be borne by the consumer. If that makes a product unaffordable to some people - your most disadvantaged customers - you’re not only creating a different negative impact, but the overall sustainability objective may be undermined by the alternatives people are driven towards. Put another way, the economics of behavioural economics are of paramount importance.  

Provided organisations approach the question of sustainability in a balanced, objective and strategic way, it shouldn’t be too hard to strike the right balance. However, if this topic (or any other not directly related to a company’s commercial goals) is disproportionately elevated internally, there is a high likelihood that mistakes will be made because people believe it would be frowned upon if they took a different point of view.