Companies can CAPTIVATE customers and employees by working towards a circular economy.
Businesses may find that improving customer loyalty and recruiting better talent are outcomes of circular business models and objectives, enhancing their competitive advantage.
Michelin Solutions, one of Michelin’s business units, offers a Fleet Tire Management solution called EFFITIRES™ in which customers pay a monthly fee for traveled kilometers (or miles) instead of tires. Today, more than 320,000 vehicles are under an EFFITIRES™ contract and Michelin expects to double the revenue of services and solutions by 2020. This alteration of the existing business model from product- to service-based offers turns customers into “long-term partners” and generates improvements to fleet efficiency, productivity and environmental impact.
Because of this, Michelin Solutions improves its value proposition to customers and consequently strengthens their loyalty. The solution maximizes tire usage and therefore its life expectancy, by ensuring tire use – in compliance with the law – to the last possible millimeter of rubber, then regrooved and retreaded. Michelin established this new business line without compromising its core business of manufacturing and marketing tires.
Dow Chemical’s packaging group has observed that programs aiming to close the loop have had a significant effect on their recruiting efforts. Based on listening sessions with new employees, Dow estimated that approximately 80% of new recruits viewed the company’s commitment to sustainability as the number one reason for joining.
These new recruits are often some of the most enthusiastic and innovative employees in helping Dow achieve its 2025 Sustainability Goals, one of which is to advance the circular economy through closed-loop solutions.
This reflects results from a joint study between the Yale Center for Business and the Environment and the WBCSD, which found that 84% of students prefer to work for a company with good environmental practices and 44% are willing to accept a lower salary to do so.
Companies who can demonstrate that employees can contribute to corporate sustainability programs that create positive change will have an advantage in securing top talent.