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Inspiring Green Consumer Choices with Michael E. Smith

Friday, April 22 is Earth Day. While many profess a desire to help fight climate change by engaging in more sustainable behaviors, there’s often a gap between people’s expressed intentions and their actual behaviors. Applied consumer neuroscience expert Michael Smith joins us to discuss his book, Inspiring Green Consumer Choices. Hear what Michael believes marketers and advertising creatives need to do to encourage more consumers to purchase sustainable products and services.

Episode Transcript

Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:

Michael E. Smith: There’s a great need for brand advertisers to educate consumers about the real personal and societal benefits of sustainable products and environmental behavior.

Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising produced weekly by Bigeye: a strategy-led, full-service creative agency, growing brands for clients globally. Hello. I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us today. This Friday, April 22nd is Earth Day, which marks the anniversary of the birth of the modern environmental movement in 1970. The website at earthday.org chronicles how, over the decades, hundreds of millions of people have been brought into the environmental movement, creating opportunities for civic engagement and volunteerism in 193 countries. Of course, the fight for a cleaner environment continues as the impact of climate change becomes more apparent every day. So to mark earth day, our podcast this week is an Encore episode, featuring the author of a book exploring the ways in which our consumer economy affects the ecosystem we inhabit and explains why efforts to mitigate humanity’s impact have to start with an improved understanding of consumer behavior. The book is entitled, Inspiring Green Consumer Choices: Leverage Neuroscience To Reshape Marketplace Behavior. Its author, Michael E. Smith, is an applied cognitive neuroscientist and management professional experienced in consumer research, neurotechnology research, development, and commercialization. Michael was a senior partner in Nielsen’s NeuroFocus consulting practice, president of Cortech labs, vice-president of Nielsen’s consumer neuroscience practice, and is the founder and principal scientist of Adaptation Research. Currently focused on challenges at the intersection of psychology, behavior change, and environmentally sustainable products and services, Michael joined us for this interview last October from his home in La Jolla, California. Michael, welcome to IN CLEAR FOCUS.

Michael E. Smith: Adrian, it’s a pleasure to be with you.

Adrian Tennant: So, Michael, what prompted you to write Inspiring Green Consumer Choices?

Michael E. Smith: Well, several things. First, it integrates two topics I’ve had a long interest in. One of those is the emergence of the discipline of consumer neuroscience over the last decade or so. That discipline attempts to better understand consumer decision-making through advances in neuroscience, experimental psychology, behavioral economics, and other disciplines. As you noted in the introduction, I had been working in this field for many years and watched it grow from a niche discipline to something that’s become much more mainstream. The second topic was a growing interest in the expanding effort of marketers to both reduce the environmental footprints of the products and services they are creating and to promote those efforts and their marketing communications, there didn’t seem to be much overlap and the related literatures on these two issues. So I recognize that gap in the discussion and identified a need to introduce the fields to each other. Of course, another proximal backdrop that motivated me, was the growing impacts of extreme weather across the globe and evidence that increasing numbers of consumers were voicing both greater recognition of environmental problems and greater desire to adopt more sustainable ways of existing in the world.

Adrian Tennant: Well, the first chapter of Inspiring Green Consumer Choices includes some eye-popping stats reflecting American consumerism. You write that the average individual living in a modern home now has over 200% more personal space in which to stretch out, consume media and store their personal collections of stuff than someone would have done just a few generations previously. And yet, even with all this extra room, often including one or two car garage is filled to the brim with more stuff, almost one in every 11 Americans pay for storage facilities outside their home, fueling the $40 billion a year self storage industry. Michael, how did we get here?

Michael E. Smith: Well, slowly and then much faster. following world war two and more developed nations and especially in the US which suffered much less than the Homeland from the war, consumer behavior grew to become an increasingly large component of GDP. this mainly reflected the growth of the middle class in the U S with increasing prosperity and increasing availability of consumer goods. After a slow and relatively steady growth and demand for consumer products, essentially from the beginning of the industrial revolution onwards, beginning in the 1950s demands for such goods, enter a period of essentially exponential growth. that has put unsustainable impacts on the resources available to meet such demand and on the ability of planets, physical systems to absorb the polluting byproducts of meeting those demands. The period from around 1950 to the present is sometimes referred to by resource management experts and economists as the great acceleration. And while one might assume that much of this increase in environmental impact simply reflects population growth, in fact, most of the growth of the consumer economy has occurred in developed nations, which haven’t witnessed that much population growth. Whereas much of the population growth instead has occurred in less developed nations that are least responsible for the growth and consult.

Adrian Tennant: What are the psychological factors behind our seemingly irrational consumption and hoarding behaviors?

Michael E. Smith: Well, this is not fully understood. So let me just be clear on that. But we have inklings of what’s driving it. It is clear that the same reward systems in the brain that are involved in more extreme and pathological psychiatric aberrations, such as compulsive shopping, gambling addiction, extreme hoarding behavior, and also physical addictions to substances. Those same mechanisms are also engaged when clinically normal people buy things. the process of shopping for and purchasing attractive products, engages deep brain structures involved with reward anticipation. Which provides a bit of a dopamine rush to the shopper, you know, when they select the purchase and decide to buy it. This is a very transient effect and our emotions regressed to a kind of equilibrium after a purchase. And, you know, in a pretty, rapid fashion. As a result, the last shiny new thing we purchased is no longer quite as exciting anymore. And we step back on what is sometimes referred to as a hedonic treadmill and pursuit of other goals and desires and in a largely unconscious effort to reinstate the positive feelings we experienced on previous shopping occasions. Over time, based on that reinforcement, we develop automatic habits that drive purchasing of preferred products in a relatively autonomous fashion. We don’t give it much thought once it’s become a habit. And because we live in a social world, we tend to model our own behavior around what we see others doing and those others are also busily out there shopping. And because of that it becomes a societal norm to do exactly that behavior. and to some degree, because people are concerned about how they are perceived by others, some purchasing relates directly to an effort to convey taste and status to our peers, you know, to look good in the eyes of others.

Adrian Tennant: This is the concept of self where what we choose to buy is really an expression of how we want others to perceive us?

Michael E. Smith: Very much so.

Adrian Tennant: Michael, in Inspiring Green Consumer Choices, you describe mental models of the relationship consumers have with the environment and the history of earth day, which has been celebrated in April every year since 1970. Could you just briefly explain the roots of the circular economy movement?

Michael E. Smith: Sure. So it’s this acceleration beginning in the 1950s, by the early 1960s, people were becoming more aware of the growing problem than many forms of environmental pollution. And by 1970, as you note, there emerged widespread concern about the impacts we were having on the planet and hence the emergence of the earth day phenomenon. Accompanying this concern was a growing realization that planetary resources were not unlimited. If we are to have a long-term future on the planet, we would need to move beyond the traditional. What sometimes referred to as a linear take use, dispose of view of consumption to end, that was less wasteful and that better mimics what happens in nature and in nature, nothing is really wasted or use it up, but rather materials are cycled through ecosystems, such that the outputs from one use becomes the inputs to another process. Since this period, was also the dawn of the space age, late in the 1960s, the sociologist and economists Kenneth Boulding characterize this the emerging difference in worldview, as essentially on the old perspective, he is the metaphor of a cowboy exploring and exploiting a limitless frontier versus the emerging relatively closed system of a spaceship astronaut dependent on life support systems that minimize environmental contaminants and that recycles limited resources in more recent decades, this notion has evolved to a discussion of a circular economy, largely building on those metaphors one where waste is minimized, and the end of life of one product cycle provides resources for the next or for some new upcycled phenomenon.

Adrian Tennant: All of us engaged in quantitative and qualitative research know that pro-social biases often result in marked differences between what survey respondents and the focus group participants say they’ll do and what they actually do in real life. Environmentally conscious behaviors are no different. The problem which you lay out in your book is the gap between what consumers say about the importance of sustainability considerations in the purchase decisions and their actual choices and post-purchase, pro-environmental behaviors they engage in. Can you explain this intention action gap?

Michael E. Smith: Pro-social response biases undoubtedly play some role in explaining the gap. Additional influences may be at work as well and some of those influences may be inherent in the psychology of the consumer, while others may reflect a market failure of one form or another. On the consumer side, people just aren’t very good accountants of their own behavior. They may lack insight into how often they actually engage in pro environmental behaviors. And because they’re well-known to rely on a variety of mental heuristics, one such being the availability bias, or how easy something comes to mind when you try to think of it, they may overweight the frequency by which they engage in such behaviors, especially if it is easy to remember instances where environmental concerns weighed on their decision-making, if that comes easily to mind, it’s easy to assume that you do that more often than you actually, frankly, do. People also tend to discount some benefits such as environmental benefits if they promise to pay off only in the future, we discount future rewards to a great degree, whereas when they are trying to satisfy some immediate need, state hunger, thirst, a need for a new pair of shoes, they may be more attuned to immediate functional benefits rather than sustainability claims of more environmentally friendly products. And generally consciously considering the pros and cons of environmental benefits typically require more mental effort on their part. They might not fully understand a potential benefit and they may be skeptical of brands emphasizing such claims, and they may not really be willing to spend the extra mental effort to think through that problem. I’m reminded of a frequently cited quote, usually attributed to the Nobel Laureate, Daniel Kahneman: ” thinking is to humans as swimming as to cats, we can do it, but absolutely hate it!”. So part of the gap may be intrinsic to human psychology. but another part of that gap may be attributable to problems brought on by marketers themselves. They have made claims that are difficult to understand in the first place. And those claims may in some cases, be rightly viewed with suspicion as there is a long history of brands engaging in greenwashing and purpose, washing, activities of that nature. And it’s well documented, so it’s not really controversial for me to say that, and I should be obvious. marketers tend to price more sustainable products at a premium to more traditional products. Yeah, many consumers may not be able to afford that differential. And a third part that might contribute to this is that some barriers that are more institutional and structural in nature, a pro-environmental consumer may sincerely want to engage in a behavior such as say, purchasing organic foods are recycling packaging, but if they live in a place where organic foods aren’t widely available or where recycling infrastructure is underdeveloped or undeveloped, they may not have the opportunity to engage in the behavior despite their desire to. So while the intention action gap is real, I think there are many things that contribute to it.

Adrian Tennant: Hmm, that’s interesting. Because the limitations of research instruments that rely upon respondents and participants self-reporting are generally well understood within the industry, there are also researchers and suppliers that offer implicit methods, including biometrics, like eye tracking, facial expression analysis, galvanic, skin response, and electroencephalography, or EEG that aim to decode consumers non-conscious thoughts. Michael, you’ve gone a lot further than most in understanding the shopping brain. Could you tell us a little about your experience as a leader in Nielsen’s consumer neuroscience practice and how the learnings could inspire brands to make it easier for consumers to make green choices?

Michael E. Smith: Happy to, and, I will say that of all the types of tools you described, it is the case that much of the applied research I’ve been involved with, and commercial endeavors I have relied heavily on those tools. my experience in the domain actually precedes my being a direct, employee of Nielsen because I previously worked for many years, and a startup that Nielsen, subsequently acquired much of that work focused on traditional, market research associated with evaluating, commercial communications about brands and their benefits and, their, attempts at persuasion in the marketplace. But such tools can serve the same purpose for the sustainability market as they do for traditional marketing. In fact, the portion of the research agenda I was directly responsible for at Nielsen examined how the brain measurement tools frequently employed in the field for optimizing commercial marketing in general could also be used to optimize communications, promoting different types of prosocial behavior. Some of the tools are really good for identifying what grabs your attention and what fails to. Others are good for estimating whether communication imposes too high of the mental workload to be effectively processed and which in turn can lead to negative emotional response. And still others could help identify whether a communication promotes a positive emotional response, and whether it’s memorable. And the commercial world, these tools can be used to pre-test communications in order to evaluate what is working well and what requires some creative optimization before it’s unleashed into the media sphere of one form or another. I’m sure you’re well acquainted with that process. Yeah, for example, for an application in this domain, I’m reminded of one project that we did on behalf of a non-governmental organization that was developing public service advertisements to promote recycling behavior. We were able to identify parts of, you know, a 32nd ad or a 62nd ad under development, that was either eliciting confusion as to what the point was or failed to elicit an emotional connection. And in turn the feedback from that measurement exercise provided information to the creative team, working on the spot that they were able to use to increase the degree by relatively minor edits and the advertising copy to increase the degree to which viewers engaged with the advertisement. So applying these tools to sustainability marketing really are not intrinsically different than marketing in general.

Adrian Tennant: And the other title by which some of these tools go, of course, is neuro marketing. I’m wondering how you feel about that term.

Michael E. Smith: Well, I have mixed feelings about it. neuro-marketing is really in my mind, the difference between consumer neuroscience and the use of the term neuro-marketing is I think of the, term consumer neuroscience applying more specifically to evaluating brain responses in response to marketing materials, whereas neuro-marketing, and my mind is more. Well, it sounds scarier to some people, rightly so in some instances, but it’s also really the application of the insights that come from consumer neuroscience to marketing strategy. So it really, those insights may help a brand marketer or an advertising team construct effective communications. And if you rely on neuroscience inputs to construct those communications, and you’re the person putting those communications out into the wild, well, that’s more of what I conceive of as neuro-marketing per se. Many other people would just equate the terms.

Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.

Adrian Tennant: Each month, in partnership with our friends at Kogan Page, The Bigeye Book Club features interviews with authors who are experts in specific areas of marketing and consumer research. Our featured book for April is Paid Attention: Innovative Advertising for a Digital World by Faris Yakob. IN CLEAR FOCUS listeners can save 20 percent on a print or electronic version of the book with exclusive promo code BIGEYE20. This code is valid for all products and pre-orders and applies to Kogan Page’s free e-book offer. To order your copy of Paid Attention, go to KoganPage.com – that’s K O G A N, P A G E dot com.

Adrian Tennant: Last October, Bigeye published a market research report, entitled Retail Disrupted: What Shoppers Want From Brands Today. We surveyed consumers across America to find out how their shopping behaviors had changed as a result of the pandemic. In a special Bigeye video event, we’re joined by four experts who reflect on the study’s findings and explore the implications for retailers and brand marketers in 2022. 

Doug Stephens: It’s logical to assume that as we see this metaverse constructed as we as individuals spend more and more time in these virtual worlds, the adoption of things like virtual apparel might start to make more and more sense. 

Ingrid Milman-Cordy: I think being channel agnostic and just making sure that you are you know meeting your consumer, where they are is important. To not think about channels as competitive to each other, thinking about them as complimentary.

Andy Sheldon: When you’re watching something as a live stream, that’s linear, there’s no choice but to watch what’s going on at that moment on the shopping television.

Syama Meagher: I see NFTs as an invitation for consumers to join brands on a digital journey and for brands to invite consumers to spend their cryptocurrencies and their time into building a relationship with the brand. 

Adrian Tennant: Join us for a lively discussion about the future of retail and marketing. Bigeye’s Envision 2022, coming soon.

Adrian Tennant: Welcome back. You’re listening to an Encore episode, featuring Michael Smith, author of the book, Inspiring Green Consumer Choices: Leverage Neuroscience To Reshape Marketplace Behavior. Due to the pandemic, many US consumers had no choice but to order products online and have goods delivered to the homes. As previous guests on this podcast have noted, while we like the convenience of home delivery, it presents us with a lot more packaging waste to dispose of. Michael, you write about the important roles that habit and intent play in consumer behaviors. Could you explain why these are so important if we want to change how we shop in order to be more sustainable?

Michael E. Smith: Well, let me first say something about the first issue and then talk about habits, which are indeed very important. the other side of increased packaging for deliveries is that you’ve dramatically decreased, the human time resource and the, you know, vehicle miles traveled by everybody going out, driving to the supermarket. and then when they’re wandering around in the marketplace, maybe buying things they never intended to in the first place. So I think there are pros and cons on the sustainability front, in terms of e-commerce and further, there’s a lot of pressure on the major e-commerce providers to clean up their act as much as possible, so there’s that going for it. but to get to your point about habits, Psychologists have documented that habitual patterns of behavior influence a significant fraction of all consumer choices, especially if those choices are about products, typically purchase frequently or routinely and purchase and the context of your favorite shopping center that you’ve been to many, many times shopping for many of the same products. mainly because during the habitual behavior is relatively easy: it requires a little thought and has fairly predictable rewards associated with it. You do the same thing over, you’re likely to have the same outcome that you did in the past, whereas doing something new has the risk of remorse associated with the purchase, something that you short circuit by relying on habits. For highly ingrained behaviors, such as habits, explicit intentions, to do something different or to do the same thing more frequently, appear to have relatively little influence and academic research on this topic, if you compare the strength of an existing habit versus an individual’s explicit claims about their behavioral intentions, habit, strength in general appears to be a better predictor of actual behavior than stated intent is. One way to overcome that: habits are driven by a familiar contexts, providing cues that activate the habitual behavior. So one way to get around that is if you’re a marketer who wants to overcome existing habits is to disrupt the context in some way. And by disrupting the context, you’re more likely to give people the mental space to adopt new behaviors. and sometimes you don’t even need to disrupt the context. Sometimes life does that for you. So for example, if someone’s starting a new job, going to a new school, moving to a new neighborhood, they have to recalibrate all their routine behaviors to better adapt to the new environment. And if you can identify people, who’ve switched the context on themselves, you can approach them when they’re in a state of mind to actually try something new, with greater acceptance than they might otherwise.

Adrian Tennant: Michael, you cite a McKinsey and Company study that found that consumers feel that it’s largely the responsibility of companies and governments to reduce barriers to green consumption. What do brand marketers need to do to adjust to consumers’ growing intentions to shop more green?

Michael E. Smith: Brand marketers need to make their sustainability claims more trustworthy and transparent if people are going to be more accepting of those claims. They also need to focus more on highlighting the immediate and concrete, functional benefits of their products. And then more as a secondary consideration, focus on the more long term and abstract environment, mental benefits, because at the end of the day, if we’re not getting our needs satisfied, by a particular product or service, we will explore other ones. So, shoppers need to be convinced that whatever their primary need is be it taste or health or identifying something aesthetically pleasing. they’re not going to go after the secondary needs. They also need to ensure that their offering has some degree of mental and physical availability. Byron Sharp, in his book, How Brands Grow, emphasizes that, having something top of mind as a brand, and have it physically available where you’re shopping, are the keys to increasing, sales and growth,of your brand within the broader category. And this is as true for sustainable brands, as it is for any other brand. And then I think marketers really need to get comfortable with letting go of the notion that just because somebody filling out a survey says they’re willing to pay more for more sustainable products. Doesn’t mean when the rubber hits the road, that that’s true. some people can be distracted by a discount on a neighboring product that they find at the shelf. and many people, the majority of the population, really, especially these days don’t have the resources to spend more money on fulfilling their product needs. And so I think there needs to be a greater emphasis for marketers marketing, more sustainable products to do everything they can to achieve price parity with the competition if they want to have more success in this sphere.

Adrian Tennant: Hmm, that’s a great point. What are the kinds of adjustments that those of us working in the advertising industry will need to make to support green consumption and adoption of a post consumerism mindset?

Michael E. Smith: There’s a great need for brand advertisers to educate consumers about the real personal and societal benefits of sustainable products and environmental behavior. More generally, there’s a growing body of evidence that more informed consumers tend to be more receptive to sustainable marketing efforts. Whereas less informed consumers tend to be more skeptical. so advertising and creative development teams really need to work with marketers to convey, where we’re headed and, fashion that is informative, without eliciting so much despair that people just give up and try not to be,more sustainably thoughtful, beyond that, I think the advertising community needs to help marketers to build more trust with their consumers. They need to rely more on things like trusted third party verifications of claims. especially on topics such as sustainable sourced and fair trade bonafides rather than promoting claims that lack such certification, or that may seem otherwise self-serving, You know, the creative agencies need to be conscious to avoid communications that smack of greenwashing. Consumers will be quick to detect it and will be turned off by it. And we’ll be more likely to engage in negative word of mouth to disparage it. and finally, I think one thing that’s really critical and that’s missing and a lot of sustainability marketing, is a failure to highlight the immediate, personal benefits that a product might convey, rather than focusing on abstract environmental benefits that might be remote and in space, because if you’re not helping people to, satisfy their immediate needs, they’re not going to have the bandwidth, to try to aspire to help to satisfy a future generation’s needs. 

Adrian Tennant: When it comes to beliefs and attitudes about climate change here in the US there is polarization among the general public, as the topic has become as politicized as mandatory precautions against COVID-19.Michael, how can marketers address those skeptical of climate change? 

Michael E. Smith: You know, the first thing to realize, trying to rationally argue this point With extreme deniers it’s likely to get you nowhere. They’re likely to just harden their position because they’re not reasoning about it in a rational way, but rather in an emotional way, that may be based on their values, that may be based on their peer group, and the place of that peer group or many other factors. So, you know, one way to address this is, personalized to the extent possible communications, that makes sustainable goods and services more personally relevant to climate skeptics. And you can do that by not focusing on carbon emissions, but rather focusing on the functional and personal benefits of the sustainable products. For example, Tesla, they didn’t become a trillion dollar company. By highlighting environmental benefits. In fact, they do little direct advertising at all. And you very seldom hear Elon Musk tweeting about, you know, their impact on, carbon emissions. Rather, in a variety of ways, they try to highlight their cars being cool, sexy, high performance, and fun to drive. Their cars are an offering that also has the benefit, frankly of lifetime costs that although they seem expensive on the surface once you take into account, fuel savings, reduced repair costs because they’re actually mechanically simpler than an ice vehicle, they’re cheaper than other premium vehicles. So by convincing people, this is a cool choice,that you’ll have fun with, and that you’ll even save money on, none of that says anything about climate and, you know, that’s worked really well for them. You know, similarly you might be able to convince a denialist to nonetheless soak up their house with led lights for many of the similar reasons: they last virtually forever. they’re a little more costly, but they have such a dramatic reduction in your energy use that they paid for themselves many times over once they’re installed. who wouldn’t want to be receptive to that? I know before I got my,solar panels, I put LEDs all over the house and monitored the impact, and it actually reduced my electrical bills by about 25% because we live in a climate where we don’t have to do much heating or cooling. so lighting is actually a big component of electrical expenses. And again, you don’t have to talk about the environmental benefits to highlight those benefits. So I think that’s a good strategy with those denialists, but you know, and this is,my activism coming to light, focusing particularly on,your industry, and not to be too pointed about it, but advertising creatives should follow the lead of the organization, clean creatives, which you could look at at CleanCreatives.org, which is an organization of advertisers bringing together leading agencies, their employees, and clients to address the ad and PR industry’s work with the fossil fuel industry, which is documented to be extensive. And the ideas, to stop profiting from the sale of fossil fuels at the agency level. And instead, begin to combat the longstanding corporate greenwashing the fossil fuel industry has engaged in, that has, in fact, encouraged climate disinformation and denialism in the first place. They kind of manufactured that whole cognitive positioning. So, just again, my activist thoughts that given the question, I can’t help, but bring up.

Adrian Tennant: I’m very glad that you did.. Michael, if in clear focus, listeners would like to learn more about you, your work in consumer neuroscience and psychology, or your book, Inspiring Green Consumer Choices, where can they find you?

Michael E. Smith: If they want to have direct communications, the best thing is just email me at michael@adaptationresearch.com, or connect with me on LinkedIn. And if you’re interested in the book, it’s available for order either on major e-commerce platforms like Amazon or Walmart, or from my publisher, Kogan page, just Google Inspiring Green Consumer Choices, and you’ll get lots of hits on the topic.

Adrian Tennant: Michael, thank you very much for being our guest today on, IN CLEAR FOCUS.

Michael E. Smith: Thank you, Adrian. It’s been a real pleasure to be with you.

Adrian Tennant: Thanks to our guest on this week’s Encore episode, Michael Smith, applied cognitive neuroscientist and the principal scientist of Adaptation Research. If you’d like to obtain a copy of Michael’s book, Inspiring Green Consumer Choices, as an IN CLEAR FOCUS listener, you’ll receive a 20% discount when you purchase online at KoganPage.com. Just enter the promo code BIGEYE20 at the checkout. As always, you’ll find a transcript with links to the resources we discussed today on the IN CLEAR FOCUS page at Bigeyeagency.com under insights, just select podcast. And if you enjoyed this episode, please consider following us wherever you listen to podcasts. Thank you for listening to IN CLEAR FOCUS produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week. Goodbye.

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