Are Americans Willing to Pay More for Environmentally-Friendly Products?
Aug 4, 2008
In my discussions over the years with clients, one question seems to pop up more than any other: Are Americans willing to pay more for environmentally-friendly products?
For the segment of the population that is most affluent, most educated and most eco-conscious, the answer has always been â€“ yes.
Now, a survey conducted by GfK Roper Public Affairs & Media and the Yale School of Forestry & Environmental Studies, shows that an ever increasing number of Americans are willing to pay more for environmentally friendly products.
“Many American consumers, even in the face of economic uncertainty, express a willingness to pay more for environmentally friendly products,” said Anthony Leiserowitz, director of Yale Project on Climate Change.
Half of the respondents to the survey said they would “definitely” or “probably” pay 15% more for eco-friendly clothes detergent (51%) or for an automobile (50%). Forty percent said they would spend 15% more on “green” computer printer paper and 39 percent would do the same for “green” wood furniture.
What has been most surprising in this study is the fact that Americans who said their current financial situation is “fair” or “poor” were just as willing to spend 15% more on such environmentally-friendly products as detergent or wood furniture as those Americans more confident of their current financial situation.
As the green movement continues to grow, this survey should make it clear to industries across the board that green products will continue to increase in demand. Whether you are a manufacturer, small family business or service provider, it is important to increase the development or repackaging of your products as environmentally friendly.
As green becomes the norm, and probably the cost of entry for most products within the next 3 to 5 years, those firms that get a jump start on their competitors will have the best chance of capitalizing on this premium price differentiation. After that time frame, the green premium will most likely disappear and companies will have to look for the next marketing edge.
In the meantime, go green. It makes economic sense.