A growing movement against plastic products and irresponsible consumption is just one of the signs that sustainability is becoming more and more important to buyers. But what does that mean for your business, and how can you create – or shift to – a sustainable business model?
The dictionary definition for “sustainable” is “able to be maintained at a certain rate or level.” Wikipedia is a bit more helpful: “Sustainable development is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” But we need to dig a little deeper to understand how the concept of sustainability is relevant to business development.
No business can succeed or scale unless it attracts customers. What is your value proposition? Why is your business valuable, and what niche are you filling?
A trendy business or one that relies on limited resources may be profitable for a few months, but how will it fare in a year or two? Resources’ availability and pricing are never guaranteed or fixed – it’s best not to build your castle on a sinking rock.
Obviously, you can’t have a sustainable business model without using sustainable resources. Many business activities are limited by finite resources or exceptionally high prices. On the other hand, some resources may be easily available yet environmentally harmful. Palm oil is a famous example of a cheap and plentiful resource, but farmers are razing acres of land and causing severe environmental destruction by continuing to cultivate the crop. Cheap resources may be tantalizing for business, but think about the big picture rather than taking a shortcut now.
One theory is that a truly sustainable business model is one that gives as much as it takes. This concept is called the cyclical borrow-use-return model. Bob Willard, a business expert and author on quantifiable sustainability strategies, contrasts this with the current “linear take-make-waste model” that so many modern businesses are built upon, which he states is “culpable for contributing to [this world’s] unsustainability.”
Rather than taking from the earth, a sustainable business will “borrow” resources with the intent to replenish them. This concept of responsible consumption is one that both businesses and consumers can promote and practice.
There are plenty of ways to approach the issue of sustainability, but the simplest one, which can unite all stakeholders, is this: Kinder businesses attract more customers. Use your sustainability as a selling point: 90 percent of U.S. shoppers prefer cause-based products and companies.
It’s OK to be open about your sustainability goals. Customers will ask, and the friendlier you are about it, the more likely they are to share that news with their friends.
But maybe you’re not entirely motivated by money. Perhaps you’re driven by the desire to be the change you’d like to see in the world. After all, the larger a business grows, the greater its impact on the world and people around it – and it’s better to start sustainably than to make the switch 10 years down the line, or when stakeholders begin pushing back on unreasonable business practices.
Whatever your motivation, if you don’t start with a sustainable business model, there will be consequences down the line. They may not be present during your lifetime, but isn’t it only right that the generations that come after us benefit from the same richness, variety and opportunity that we have? Like Willard said, is a system that promotes waste and manipulation really one that should be defended?
Your dedication to sustainability may result in higher prices for your consumers, and that’s OK. Let your customers know why they’re paying more for your products in a compelling blog post, series of posts or dedicated brand story page. Including your customers in the decisions is one way of serving them and giving them more power over their dollars. Americans are willing to pay 17 percent moreto do business with companies known for great customer service, and cause-based spending is also on the rise.
You might choose to engage customers by pledging a percentage of revenue to a certain charity or organization, for example, or offering different shipping or packaging options. Customers who love your product can be converted into evangelists when you create messaging that resonates with them. If you can involve your consumers in the discussions about sustainability, they will become more invested in your company’s success and your products. You could also consider crowdsourcing sustainability ideas from consumers through a forum or online group.