Quantifying the value of sustainability for NRS.
NRS converted to full employee ownership and rebuilt its supply chain, then said very little about either. The question was whether saying it out loud would move revenue, or just feel good.
A double-digit preference lift: that was the result when customers were told about NRS products’ social and environmental attributes.
Customer Science™ · 23,000 customers, revealed choice · held price: double-digit lift · 10% price increase: smaller, still positive lift
Quantifying the value of sustainability to customers.
NRS has long been a leader in social responsibility, from converting to 100 percent employee ownership to rigorously improving its supply chain. It had always kept those commitments relatively quiet, competing instead on product performance.
The question was whether making a deep commitment to sustainability public would meaningfully move customers. That meant going past the idea that customers care to a hard financial fact: how much value does the market place on sustainability against other product attributes, and would customer awareness of it help if prices had to rise?
That is a harder question than it sounds. Ask people directly and they will tell you they care, because that is what people say. The answer only counts if it comes from what they actually choose.
Surveys ask what someone would do. Purchases record what they did. The gap between the two is where most sustainability research quietly dies, which is why this study measured choices instead of opinions.
Measure choices. Not opinions.
Customers were put in front of real trade-offs and their choices recorded. The design isolated three things in sequence, so each effect could be read on its own rather than inferred from the total.
Each axis was run and measured, which is what makes the answer usable. It holds for a leader and for a laggard, for a claim about a product and a claim about the company, for a brand already preferred and one starting behind, and after a price rise. Which combinations paid, and by how much, is worth a conversation.
penaltyRecycledFair trade
Left: a price rise costs preference, and stating recycled content or fair trade certification more than wins it back. Right: a claim about the product lifts preference, and a claim about the company lifts it further. Bars are indexed to the baseline, not absolute shares.
Environmental and social performance had been part of the product for years.
For these customers, where the company stood was not background information. It was one of the things they were buying.
Being identified as a leader lifted preference by double digits when the price stayed the same. Raise the price 10 percent and preference still rose, just not by as much. The claim is not that people happily pay more. It is that the leadership effect is large enough to survive a real price increase and still land ahead of where preference started.
Identifying the manufacturer as a leader lifted preference by double digits. Identifying it as a laggard pushed preference down. The effect ran in both directions, which is the strongest evidence that it was real.
The Demand Realization™ Model then translated the preference gain into revenue. Expected growth from the shift ran well ahead of the general apparel market rate.
We have always believed in the importance of doing business the right way, but it was still powerful to see that benefit quantified in sales and dollar terms. Working with Valutus… we were able to demonstrate the business benefit of values-based actions in a way that was both credible and actionable. We’re using the results to shape marketing, product development, and strategic decisions.
Mark Deming, NRS
They were already paying for it. Now it pays back.
For NRS, customer awareness of what the company actually does is a direct path to revenue, and one that would otherwise cost a great deal in marketing spend to buy. The work was already done. What was missing was the number that made it worth talking about.
From submerged value to banked value.
Let us talk about the value you create, and how you can demonstrate it. Credibly and concretely.
- Preference figures are from choice-based experiments with 23,000 NRS customers, measuring revealed preference rather than stated intent.
- The double-digit preference lift is measured at a held price. At a 10 percent price increase, preference still rose, by less than the held-price figure. That is a smaller net gain, not a willingness to pay more, which is what the experiments measured. Revenue effects were modeled from the preference gain using the Demand Realization™ Model.
- Consumer fieldwork was run with Triple Gap, now closed. Valutus led the design, the analysis, and the valuation.