People Don’t Pay A Premium To Be Sustainable, Says CASHurDRIVE CEO

In today’s environmentally conscious world, a paradox has emerged in consumer behaviour and brand marketing. While sustainability has become a buzzword and a growing concern for many, there is noticeable reluctance among consumers to bear additional costs associated with eco-friendly products and services. 

The Sustainability Paradox In Advertising 

Raghu Khanna, the CEO of CASHurDRIVE, dived into this paradox, offering insights into how the advertising landscape adapts to these conflicting consumer demands. Highlighting the central challenge facing marketers today, he said, “People want to be sustainable, but they do not pay any premium for it.” He explained that advertisers are finding creative ways to meet this challenge, citing a recent campaign in Mumbai where a green product was promoted exclusively on a bus, emphasising its eco-friendly attributes without inflating costs. 

Consumer Values Vs. Market Realities 

Despite the reluctance to pay the premium, Khanna pointed out that sustainability remains a powerful factor in consumer decision-making. “Today, 70 per cent of consumers align with brands that share their values, and about 66 per cent are willing to pay a premium for sustainable products,” Khanna said, highlighting the potential for brands that can effectively communicate their sustainable practices. 

The CASHurDRIVE CEO noted that various sectors, including FMCG, healthcare and real estate, increasingly leverage sustainability in their marketing strategies to appeal to these value-driven consumers. 

Technology: Bridging The Gap 

Technology is helping to address the sustainability paradox. For example, ride-hailing services and airlines are now able to provide users with information about their carbon footprint, making the impact of sustainable choices more tangible to consumers. 

“For us, ESG stands for Environment, Sustainability and Growth,” Khanna explained, adding that growth in sustainable products is essential for brands to remain competitive, even in the face of consumer reluctance to pay premiums. 

Addressing delegates at the BW Festival of Marketing 2024, which took place in Delhi on August 29, Khanna argued that despite the current paradox, investing in sustainability is crucial for long-term success. When a brand invests in a sustainable option, the investment will show multiple returns. 

Kapil Yadav

BW Reporters The author is a trainee correspondent with BW Businessworld