Marketing and Comms
What Happens When an Environmental Leader Finally Claims the Mantle? NRS Asked Triple Gap & Valutus to Find Out

Northwest River Supplies (NRS) has done quite well since Bill Parks founded it almost 50 years ago — it is now one of the largest paddlesports companies in the world. The company’s rich media presence and avid support of conservation and access groups has contributed to brand loyalty, helping NRS carve out a leadership role in the industry.

“Drawn to Water” is the company motto; and, if it relates to riverine or oceanic sport, it’s probably been supplied by NRS. The company is also known in the industry — though not, perhaps, in the wider world — for its advances in sustainable materials, packaging and operations. A recent initiative to eliminate plastic from its apparel packaging is an example of this commitment. The company also innovates in other ways — for example, as Parks neared his 80th birthday, he elected to convert NRS to 100 percent employee ownership rather than sell to outside investors.

This all seems a natural fit for a company that honors the outdoors and needs waterways to be healthy for it to thrive. NRS recognizes, however, that there is still a long way to go — and not enough other brands in this niche have been making strides on sustainability.

NRS has worked hard to source sustainable materials; reduce and improve packaging; and to do right by stakeholders, planet and society. And yet the company — being a tad diffident about what is, after all, just doing the right thing — hasn’t touted the fact in its marketing. It’s even stayed low-key on potential selling points such as employee ownership. Ditto for products made entirely of recycled or fair-trade materials.

The company may feel a little awkward tooting a sustainable horn; but, while humility has its place, is shyness about the good they do the best choice? Or is it a missed opportunity?

NRS began to wonder: Hey, if we let people know this stuff is at our core — and make clear when our products are recycled, fair trade and so on — could we, perhaps, sell more of them? And more importantly, how much value does the market place on brand-level commitment to sustainability vs. product-level initiatives?

Up until now, no one has been confident predicting just what effect touting responsible practices would have on customer preference. So, NRS asked Triple Gap and Valutus to find out. This sparked original research that appears to settle the question. NRS has generously allowed us to share our general findings with you.

There is past research suggesting that, yes, hypothetically, folks would lean towards the more sustainable product, the fair trade-certified material, the socially responsible company, if the products are equal otherwise … But is that true when people actually choose a product? [Hint: Based on our findings, it is.]

And what about price? Sustainable manufacturing and operations often come at a cost: Doing the ‘right’ thing can sometimes be the more expensive thing (although NRS’s prices have stayed competitive with its peers regardless). Still, would sustainability and responsibility make NRS products less price sensitive — so if a price increase were needed, it wouldn’t have the same effect on sales? [Hint: Per our research, they would.]

NRS knew it would have to retool its marketing strategy and get the word out to make it work — and that would take an investment of time and money. Before doing so, the company asked us and Triple Gap to determine if it would pay off. [Hint: According to our findings, it certainly would — see for yourself below.]

For years, our hearts said there was value in touting sustainability and CSR actions because — well, of course there is ... right? But how to measure the sales and revenue bump to be gleaned by, in the case of NRS, raising awareness of its brand values and where it’s headed? Can such really be measured? [Hint: Yes, it can; and we did.]

It turns out there is value — a great deal of value by business standards — in simply saying, “Our product, which looks and works just like their product, is also: 100 percent recycled / sustainably sourced / fairly traded / from a socially responsible company.”

Per our research, a company that does this will see preference for products so marketed rise by double digits. Now that’s a difference!

To determine the benefit credibly, we used a more rigorous research approach than is the norm. No hypothetical questions such as, “Would you pay more for a sustainable product?” (answers: “a lot, a little, not at all,”) and so on. Unfortunately, people’s answers to these questions don’t always match their actual behavior.

Instead, we presented consumers with a choice between two products. In some cases, one entry was a competitor, one an actual NRS product. For others, two NRS items of different colors or styles went head to head. Some products were commodities, such as shirts; others were not, such as life jackets.

We then asked our over 23,000 respondents to choose which one they would buy. Then we tested how environmental or social attributes affected people’s choices, changing the composition of some of the products (e.g., 100 percent recycled fabric) and the social aspects of others (e.g., fair trade certified).

We also tested changes in pricing, to see if preference for sustainable products could withstand a price increase in the low double digits.

Finally, we tested the effect on preference when one product’s manufacturer was an environmental or social leader (without saying anything about the product itself) and the other wasn’t.

As we hinted above, it did indeed make a difference. Turns out, adding any of these attributes generated a significant increase in preference.

As expected, more traditional attributes such as price and style mattered more; but when comparisons on those points are relatively equal, sustainability considerations tipped the balance. Our results showed that adding these attributes and promoting them effectively increased preference significantly compared to the baseline, by an amount in the low double digits.

Consider the impact at scale. If even a portion of NRS’ offerings saw results like this, it could add low-hanging revenue the company might have had to work long and hard to achieve otherwise. (For comparison, the apparel market’s overall growth rate is forecast to be just over 5 percent — well below the preference gain we found.)

We also found variations in the effect by original product attributes (e.g., color), beginning product preference (e.g., when the sustainable product is preferred versus when the competitor is preferred), and even some tantalizing hints at a seasonal aspect to the effect. In all, we conducted 16 separate experiments using our Customers Science™ methodology to nail down what mattered and how much.

Small variations aside, the overall story remains: Doing good leads to doing really well … as long as people know about it. As part of running scenarios using the Valutus InVEST™ (Interactive Valuation of Environmental & Social Transformation) model, we tested the effect of awareness on the financial benefit — and it was huge. (This makes sense, since if people don’t know you’re more sustainable or responsible, it doesn’t affect their decisions!)

Based on the results, NRS is moving to increase awareness of what it’s already doing, so it can capture more of the value of its underused sustainability asset — and it will be doing more. However, the bigger takeaway is that, by taking a brand position on environmental and social responsibility, NRS is better positioned to make real strides within all corners of the organization. Never one to be satisfied with the status quo, NRS is doubling down on its long-held philosophy that doing the right thing is doing the smart thing.