How Lenders Can Use Environmental Causes to Help Customers See Green

I’m fascinated by what motivates people. Understanding how someone arrives at a decision is a particular hobby of mine. It’s one of the main reasons that one of my wife’s nicknames for me is “But why” ― because I ask so many questions. 

I was listening to a podcast earlier this week and a brother and sister team of economists were talking about the results of a study they had conducted. The study examined a dynamic they called “conspicuous conservation.” The idea that drives the dynamic is that people go out of their way to make themselves look more environmentally friendly. The economists cited two examples: car purchases and solar panels. 

I don’t remember the exact number, but the economists said that there are something like 42 hybrid vehicles available in the market today. But the one that is the most popular ― far and away ― is the Toyota Prius. And there’s a very simple explanation, according to the study. Because when people see you driving a Prius, they think you care about the environment. But a Honda Civic hybrid looks almost exactly like a non-hybrid Honda Civic, so your green conscious goes unnoticed when tooling around your neighborhood. 

The same is true for solar panels. Many families put solar panels on the front side of their roofs, so people will notice them. This is done despite the fact that in a lot of cases, the back side of the roof is the one that receives more sunlight and would be a better spot to install solar panels. 

This theory totally makes sense to me. Despite what anyone says, people care what others think about them. Many of the decisions we make on a daily basis are based on how we think our friends, our family, even strangers, will perceive them. 

These notions should be incorporated into the decisions that auto lenders make. Not because they should care what we think (although we now know that they do care what we think), but because this is an opportunity to win business by helping customers show their love of the environment. 

An ad campaign touting paperless applications or paperless statements (which most lenders offer already) would be an easy campaign. Carmakers should definitely look at tweaking the design of their hybrid vehicles to make them stand out more compared with their non-hybrid counterparts. Lenders could use marketing campaigns to promote whatever they are doing to reduce their carbon footprints, and let people know that by obtaining a loan from them, they are doing more for the environment than working with other lenders. Lenders could offer to make a small donation from every loan payment to fund environmental causes and then give customers a sign they can place on their front lawn touting that program. Branded compact fluorescent light bulbs or drying racks, anyone?

This is another example of how lenders can use the manner in which people make decisions to obtain a business advantage.