Sustainability, CSR and protecting the environment are key elements of any business strategy, from SMEs to global corporations, but is that translating to the customer experience? What does a responsible, sustainable customer experience look like – and what are the keys to successfully creating one? We spoke to ESCP Professor Isabella Maggioni to find out.
Hello Isabella! It seems fair to say that today, customer expectations are higher than ever when it comes to who they choose to spend and engage with. Would you be able to give some context about this modern focus on sustainability and ethics?
Isabella Maggioni: It’s clear that issues surrounding sustainability and ethics are playing a critical role in driving consumer behaviour and choice in today’s markets. Consumers definitely expect brands to share their values and concerns. If we look back over the last three decades, historically, the term ‘sustainability’ almost exclusively referred to the protection of the environment.
Today, it has a far more holistic meaning. This is encapsulated in what we call the ‘triple bottom-line approach’, which asserts that modern sustainability develops across three key dimensions: economic, social, and environmental. This has gradually translated to today’s plethora of Corporate Social Responsibility (CSR) programmes.
A great example is climate change – over the past few years, consumer sensitivity towards climate change has skyrocketed. Other key issues today include reducing the environmental footprint of business activities, supporting social causes by fighting against injustice and assisting communities facing hardship or discrimination.
The modern focus on sustainability and ethics places human beings at the centre of business.Prof. Isabella Maggioni
Can you shed some light on how issues surrounding sustainability can have an impact on CX (Customer Experience) specifically?
From a marketing perspective, sustainability has to be fully incorporated into a brand’s values and promise, becoming part of the brand identity and a point of differentiation that can impact the perceived image of the brand and its performance.
This shift in business mindset needs to be supported by the entire organisation and requires a clear strategic direction, often leading companies to transform their business models entirely over a period of months or years.
Although the implications of sustainability at a strategic level are clear, the implementation of sustainability efforts and initiatives can at times be very complex. When designing customer experiences, it’s fundamental to analyse and identify the moments throughout the customer journey in which the inclusion of a sustainable element could deliver additional value.
Unfortunately, there’s often a lack of knowledge with reference to the effects and implications of creating a sustainability-driven customer experience. In spite of the rising trend in favour of holistic sustainability, many companies are still failing to respond to it in a meaningful way.
A difficult challenge – but an important one. Is it fair to say that today, brands’ survival depends on being committed to transparency with their customers?
A strong commitment to sustainability is what customers expect from the brands they would like to engage with – but it’s important to highlight that sustainability is a bottom-up trend which is, fortunately, valued by both customers and employees!With that said, today, the stakes are higher than ever.
The Covid-19 pandemic and the very recent international turmoil in Ukraine have prompted companies to further rethink their purpose and role in the society. In general, there’s a strong desire among the public for brands that step up and contribute to sustainability and societal issues.
Transparency is key to a successful CSR strategy: it breeds business accountability, improves brand perception and is foundational to building trust and meaningful relationships with customers.
As consumers and society push for more sustainable and ethical offerings, it’s critical that companies share with the public their initiatives in a transparent way.Prof. Isabella Maggioni
Today, brands are often criticised on social media for reasons going above and beyond the traditional customer experience (inclusivity and diversity, greenwashing and cultural appropriation, to name just a few current issues).
Can you share any examples of when brands have adapted to make their customer experience more responsible following this kind of criticism – or indeed the opposite?
Pressure surrounding greenwashing is still very much a trending issue. Brands are constantly scrutinised for evidence of unethical practices.
Recently, the European Commission reported that national consumer protection authorities believe that 42% of online claims about sustainability are exaggerated, false, or deceptive, while in 37% of cases the claim is vague (using terms such as “eco-friendly”, “sustainable” or “conscious”) while lacking evidence to support them.
Back in 2011, Greenpeace began a social media campaign to put pressure on several toy companies for sourcing packaging materials from the questionable supplier Asia Pulp & Paper (APP), with leading players such as Mattel being forced to disable comments on their Facebook accounts for days.
The companies responded to this call to action in different ways, with Lego managing to successfully leverage the crisis – shortly afterward the company published a new policy to reduce total packaging and employ recycled materials as much as possible while using only Forest Stewardship Council certified sources.
Several fashion brands have been called out for greenwashing due to the lack of information provided to the public about the real sustainability of the textiles used to produce their collections – even when they appear to be taking steps towards sustainability. An example is H&M’s Conscious Collection, which claims to offer sustainable and affordable fashion options.
However, the Norwegian Consumer Authority (CA) pointed out how this new product line could potentially mislead customers, as H&M does not provide adequate information about why these garments are less polluting than others, going on to ask H&M to be more specific in describing the environmental impact of the new collection.
Can you outline the key components of the customer experience and share your golden rules for making them successful AND responsible?
The overarching aim of designing a successful customer experience is to build unique, memorable and satisfying experiences, with the goal of activating positive cognitive and behavioural responses across all touchpoints where customers and potential customers can interact with a specific brand.
When designing a customer experience, managers must consider the entire customer journey and at the same time they need to evaluate its evolution over time, with a relation perspective in mind.
Of course, customer-centricity and a tailored approach through customisation and personalisation are critical in delivering a successful customer experience.
On the other hand, customers are increasingly looking for convenient and efficient experiences across the online and offline channels. The competitive pressure to deliver the best customer experience possible and the increasing sensitivity of customers to sustainability issues can’t be examined in a vacuum.
Designing sustainable customer experiences means delivering holistic value that goes beyond the one-off transaction and creates benefits at the environmental, social and economic levels.
Several technologies that are currently used to improve the effectiveness of customer service can play a critical role in improving a business’s sustainability.
One key aspect revolves around the opportunity of providing information and offering sustainable choices to customers – for example, many companies have started working on the impact of their supply chain and offering more sustainable delivery options to customers, offering more sustainable products or reducing the carbon footprint of their supply chain activities.
This effort could be taken even further by educating customers and influencing their consumption behaviour. Among the brands that stand out in this space is Patagonia, which has thoroughly worked on shifting customers’ habits toward a more sustainable direction through its long-wearing clothing philosophy and offering the opportunity to repair and recycle garments through the Warn Wear initiative.
Their philosophy is a great example of a customer experience that can balance the opportunity to empower people, to transform communities and to safeguard the environment.
The critical importance of sustainability requires companies to find new ways to assess the customer experience while effectively measuring sustainability performanceProf. Isabella Maggioni
Finally, what are some key indicators that suggest a positive customer experience?
Traditionally, the quality of a customer experience is measured using a series of metrics: the Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), Customer Effort Score (CES) and the Customer Retention Rate, among others. These data-driven indicators represent an efficient way to assess the level of customer-centricity in creating a successful experience.
With that being said, the critical importance of sustainability requires companies to find new ways to assess the customer experience while effectively measuring sustainability performance.
This approach has to balance social, environmental and economic indicators, which themselves need to be embedded in the analysis of the different stages of the customer journey to identify pain points that can be rectified and highlight positives that can be leveraged in the future.
As a starting point, continual tracking of consumer sentiment, with a focus on perceived sustainability of different CSR initiatives, would offer essential insights to creating and refining a sustainable customer experience.
The digitalisation of the sustainability process will also be one of the major thresholds for success in the future – we only need to look at the current trend towards annual sustainability reports, now a widespread practice for global corporations.
The need for transparency has been further increased by digital technology that allows for real-time tracking and assessment of the impact of production and consumption activities. Through big data, blockchain and artificial intelligence companies can generate actionable insights to tackle sustainability matters, while at the same time giving access to reliable and clear information to consumers.
More than ever before, the choices we make about sustainability are shaping the way we interact as consumers and entrepreneurs. From greenwashing to education about climate change at work, questions surrounding the environment are beginning to influence data and digitalisation in an unprecedented way.
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