How Sustainability Can Drive Consumer Perceptions of Brand Value

A high correlation between ESG and growth suggests that brands able to differentiate on these “elements of value” can outperform their competitors, according to Bain & Company.

What are elements of value?

• The consulting firm has previously identified 30 types of value (Elements of Value™) that fall into four broad categories – functional, emotional, life changing, and global impact. These can help companies understand the types and amount of value that consumers experience in the brands they buy, and how that compares with others.
• These Elements of Value are focused on brand differentiation and change as consumer attitudes shift. Bain & Company has recently introduced seven ESG-related values (reduces waste, health and wellness, inclusive, humane, cares for the earth, cares for people, ethical) which range across those four categories.

Why values matter

Meeting functional needs (eg. reducing waste) may be regarded as table stakes for many brands in many categories, but those that deliver on more of the higher order values see better revenue growth, household penetration and repurchase rates.

Takeaways 

• Brands that embed sustainability values at the core of their product and marketing can successfully differentiate themselves and capture consumer interest.
• The greatest opportunities for brands lie in categories where ESG investment is more nascent, eg. soft drinks, coffee, beer, laundry, chocolate.
• As different consumer segments perceive different values from the same brands, there are opportunities to use digital media to target these groups with relevant messaging.
• As consumer wants and needs change, experimentation is the key to building out and activating a values-focused brand strategy.

Credit: Bain & Company, WARC