Benefits of Signaling Greenness (02-01-17)

Wang, Krishna, and McFerran studied how consumers’ environmentally responsible behavior is affected by the actions of organizations.  They report that “Firms can save considerable money if consumers conserve resources (e.g., if hotel patrons turn off the lights when leaving the room, restaurants patrons use fewer paper napkins, or airline passengers clean up after themselves).”  Data gathered “in real-world hotels . . . show that consumers' conservation behavior is affected by the extent to which consumers perceive the firm as being green. . . . consumer perceptions of firms' greenness and consumer conservation behavior depend on (a) whether the firm requests them to conserve resources, (b) the firm's own commitment to the environment, and (c) the firm's price image. . . . firm requests to consumers to save resources can create consumer reactance [resistance] and can backfire when firms themselves do not engage in visible costly environmental efforts. Such reactance is more likely for firms with a high price image. . . . by spending a little money to signal environmental commitment, firms can save even more money through consumers' conservation of resources, resulting in wins for the firm, the consumer, and the environment."

Wenbo Wang, Aradhna Krishna, and Brent McFerran.  “Turning Off the Lights:  Consumers’ Environmental Efforts Depend on Visible Efforts of Firms.”  Journal of Marketing Research, in press.