Marketing needs an upgrade, and this starts with rethinking demand, says Leo Rayman, CEO of EdenLab, a sustainability innovation and clean growth company.
This opinion piece is part of WARC’s Future of Strategy 2023 report.
Whether or not you’ve really accepted it, you can feel it; the smoke-hazed skies, the baking temperatures, the forest fires, the flooding. Companies can feel it too, in boardrooms, on the capital markets, in their consumer research, in their dealings with regulators.
The shift to a post-carbon economy, which we call the “Great Transition”, will be even more disruptive than the digital transformation of the last few decades. Global spending on physical assets alone for this transition will reach a staggering $275tn by 2050, according to McKinsey.
That’s trillions of dollars into wind farms, solar power, smart grids, new pylons, retooling factories, retrofitting buildings, replacing vehicles, switching out oil-based chemistry for biology, the list goes on and on. To rework an old phrase, your company is either helping drive the transition or its part of the problem.
At EdenLab we see that there are really only two types of companies in the world:
- ‘Thrivers’ that are still going to be in business in the post-carbon world, hustling to make the transition real now.
- ‘Zombies’, who appear alive but are actually already dead because they’re not turning their climate pledges into implementation fast enough.
‘Thriving’ companies are growing faster, more efficient, more investable and more attractive to talent and of course to customers.
Source: Sustainability as a transformation catalyst, IBM, January 2022
Apple’s recent ‘Mother Nature Needs a Status Report’ film is a key moment. Whilst there is much for Apple yet to do with regard to product obsolescence and circularity, when the world’s most valuable and forward-looking company goes big on this, you can be sure the world is changing around you. Don’t get left behind.
That’s just one reason why Apple’s Price to Earnings P/E Ratio, a measure of a company’s future value, is around 30 whereas BP’s is nearer six. The P/E ratio is set by the market and a lower number indicates a company with little growth potential or one that will decrease in size in the future.
There’s a bug in the system, Marketing needs an upgrade.
So where does Marketing sit in all that? Currently Marketing is on the wrong side of history. Generating demand for products and services with little or no care for the greenhouse gas pollution, or displacement and misery of people that can come with it.
It’s hardly surprising that climate activists have until now seen Marketers as ‘dirty’, part of the problem rather than the solution. But even that is starting to change. Recently, Christine Figueres, architect of the Paris agreement and its 1.5 degrees commitment said, “In the climate movement in the past we’ve stood back from marketing because it’s sort of tainted, maybe it’s ‘icky and we’re too good for marketing and too righteous, we’re on the right side of history… but maybe [inspiring people to take action] it as simple as basic marketing.”
The skills of the marketer have a vital role to play in securing the transition. The marketer superpower that is shifting aspiration and changing behaviour is sorely needed.
Marketers have the ability (and perhaps the duty?) to help inspire people to make better choices, better for nature, better for their communities, better for others around the world.
We’ve done it before, from campaigns against drunk driving, to getting your five a day, to selling the switchover to electric vehicles. Admittedly, coming off our addiction to fossil fuels will be harder and require really creative systems thinking not just a smart creative TV ad.
Demand Generation is dead. Long live Demand Switching.
Demand Switching is how Marketing shows up in the 21st century. Fundamentally it’s switching demand from unsustainable, highly carbon-intense products to clean, green ones – or indeed to not buying a product at all.
This is the core of the work we do at EdenLab and in doing so, we’ve identified the six ways to deliver demand switching:
This means replacing a dirty, polluting product with a clean (or cleaner) one. For example, an EV instead of a diesel car because even over a whole lifecycle an EV produces two-thirds less impact. It might also mean shifting from a chocolate bar that has child labour in the supply chain to one that hasn’t, e.g. Tony’s Chocolonely.
Many companies don’t (yet) have a superior sustainability product or proposition. That’s where we help them. But for those brands that do have a superior product with a lower impact on Nature, then it deserves to be number one in the market and if it isn’t, marketers need to help them sharpen up their go-to-market strategy.
Reducing the volume of a product (compaction) and/or making it more potent can reduce transport emissions, so a bottle of fruit squash drink that makes 20 litres is better than shipping in 20 litres of juice. The same is true for laundry detergent sheets over bulky powder or liquids, e.g. The Green Company.
3. Save (from landfill)
We love this one, what if rather than junking consumer electronics or white goods we repaired them. There’s a lot of work to do to make repairs easier and parts accessible but changing legislation is beginning to help, e.g. the UK’s new Right to Repair law. People also get a surprisingly joyful kick from fixing a toaster. As an example. Dr Martens are launching a repair service.
Why own an electric drill, or car, or power washer if you can borrow one? The growing networks of Libraries of Things shows how this can work at a local level. A great opportunity here for a business to help facilitate community sustainability, for instance Bosch power drills.
5. Stick (around)
Holding on to something you’ve bought is a brilliant way to slow consumption and emissions. It’s the ‘wardrobe classic’ of the great transition. If you can afford it, buy less but better. Clearly there’s a social justice/affordability issue here. But planned obsolescence, e.g. in phones, will one day be a criminal act. The new Fairphone 5 is a good example of a product built to last.
How about switching demand away from buying anything at all? There’s joy to be had in other ways than hitting the shops, unboxing or posting a haul; for example, Parkrun the free, community event where people get together to run every week is all about connection and competitive fun where the kit you’re in is of no concern. It’s sponsored by Health Insurer Vitality. As people search for new forms of post-consumer meaning, how might companies support their journeys into, e.g., learning, connecting and finding deeper purpose?
There’s more to the opportunity ahead than just getting good at Demand Switching. The level of the change required means that creativity is going to be more valuable than ever. But creativity needs to move up and out from the world of communications into the world of business reinvention and behaviour design.
This presents a once-in-a-generation opportunity for strategists who can imagine alternative futures for brands to go upstream and actually help businesses do well by doing good. Now that is a proper future for Strategy.