U-M Study: Consumers’ Conservation Efforts Depend on Company’s Green Credentials

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A consumer’s decision to conserve resources — acts such as turning off lights, using fewer paper products, etc., which can help firms save money — is affected by how green they perceive the company making the request, says a new study from University of Michigan marketing professor Aradhna Krishna.

“When conservation requires effort on the part of the consumer, there’s an inclination for consumers to ask themselves if the company is being green or greedy,” Krishna says. “If they don’t see a visible green effort by the company, the request to save resources might backfire.”

In Turning Off the Lights: Consumers’ Environmental Efforts Depend on Visible Efforts of Firms, Krishna and her co-authors worked with a hotel chain and a Chinese company on a field study to test the effect of a company’s green efforts on its customers.

Employees of the Chinese company were assigned to stay at either a high-priced hotel or a low-priced hotel. Some of the rooms had notes asking the customers to turn off the lights, air conditioning, and appliances when not in use, along with suggesting a temperature range for the thermostat.

As part of the test, randomly assigned rooms had either an environmentally friendly and more costly bamboo toothbrush, which meant to signal a company’s commitment to conservation, or an environmentally unfriendly and cheaper plastic toothbrush.

Customers in rooms with the bamboo toothbrush used less electricity when asked to do so in both the high-priced and low-priced hotels. Customers in the high-priced hotel who received a plastic toothbrush used more electricity when asked by the note to conserve power, while those in the low-priced hotel didn’t change electricity usage.

The study also suggests that spending extra to show environmental commitment can still produce a net savings. In the hotel test, the bamboo toothbrush cost about 12 cents more than the plastic one, but electricity savings offset the cost.

“Our study shows that with a little effort, companies can create an all-around win since they can save money and reduce consumption, which helps the environment,” Krishna says.

To view the full study, click here.

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