🎓 Take-back programs boost profits

People were willing to pay up to 39% more when companies offered to take-back and recycle products at the end of their lifecycle.                                                                                                                                                                                                                                                                                                                                                                                                                 December 05, 2023 | [Read Online]( Take-back programs boost profits People were willing to pay up to 39% more when companies offered to take-back and recycle products at the end of their lifecycle. [Thomas McKinlay]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Ariyh&body=Take-back%20programs%20boost%20profits%3A%20People%20were%20willing%20to%20pay%20up%20to%2039%25%20more%20when%20companies%20offered%20to%20take-back%20and%20recycle%20products%20at%20the%20end%20of%20their%20lifecycle.%20%0A%0Ahttps%3A%2F%2Fariyh.beehiiv.com%2Fp%2Ftake-back-programs-boost-profits) New to [Ariyh](? This is a 3min practical summary of a scientific study 🎓 Join 24,383 marketers who grow faster using science, not flawed opinions 📈 [Subscribe here]( Today’s insight is brought to you by… [Storyblok]( What ROI are you getting from your content? There’s a new content management system on the block: [Storyblok]( (yes, cringey pun intended). Research from Forrester found that, on average, Storyblok’s headless CMS delivered an ROI of 582% over three years. It pays for itself in less than 6 months. Sounds like a good deal? It is. Probably much more than your current CMS. [Dive into the study]( Want to sponsor Ariyh? [Here’s all you need to know](. 📝 Intro You are searching for a new mattress online, looking for a bit of a comfort upgrade. However, before the new one comes in, the old one has to go. You’ll need to think where to bin it, and probably invite a friend to help out. And besides the effort - what a waste! The mattress is still in good condition. Maybe it could be recycled? Or donated to someone in need? One of the brands you are considering is priced higher than average, but they offer a sustainable initiative to take back their old products. That would have come in handy right now. So you decide to buy your new mattress from them, even though they cost a bit more. Here’s why most people will do the same. P.S.: Sustainability helps [signal that your products are high quality](, especially if you are a new brand. Previous insight: [Mobile buyers want unique (vs popular) products]( (more insights [here]() People are willing to pay more for products that have sustainable take-back programs Topics: Sustainability | Product | Customer Experience For: B2C. Can be tested for B2B Research date: August 2023 📈 Recommendation When selling products, offer a take-back policy for old items (e.g. in-store recycling boxes for worn clothes, free pick up of old electronics when delivering the new ones). People will be willing to pay a higher price. 🎓 Findings - Take-back programs (i.e. the option to return used products for recycling) increase how much people are willing to pay for a product. - As part of a series of 8 experiments researchers found that: - People were willing to pay - 39.1% more for a pen with a take-back program (versus a regular pen) - 12.2% more for an IKEA circular program armchair (versus a regular armchair) - 9.2% more for a backpack, but only when buying it for themselves, not others - 65.3% of people chose a more expensive shirt ($10.15 VS $11.90) with a take-back program, compared to a regular shirt. - Return programs increased brand loyalty by 19.4% for a clothing brand, and 13.3% for IKEA. - The increased spending effect was stronger when people returned for their 2nd and 3rd visits and disappeared after the 4th. 🧠Why it works - [We dislike wasting resources]( (e.g. money, time, effort, items that are still good to use). - We give[more value to products when we have more sense of ownership over]( them (e.g. an item we already decided to purchase). - A take-back program gives us a sense of control over avoiding waste (as an item can be returned when no longer needed and the firm will dispose of it correctly). - This increases our psychological ownership, which in turn increases how much we value the product. 🚀 Want to drive more traffic and skyrocket your online presence? [dofollow.com]( is a premium link-building agency that will do that for you. Why choose them? - High-quality websites: Get backlinks from reputable sources that Google loves. (HubSpot, BigCommerce, Canva, and 100s more). - Pay-for-performance: You only pay for the links they get live. No hidden fees. - Link monitoring: They'll replace any broken links for free. Elevate your digital presence with [dofollow.com](. [Book a free discovery]( This announcement was sponsored. Want your brand here? [Click here](. ✋ Limitations - The study did not test whether the effect is stronger or weaker for products with a very long life span (e.g. an office desk) compared to those with a very short life span (e.g. coffee capsules). - The researchers tested products with or without discounts and with or without shipping costs and the effect was still present. But there might be other unknown factors we don’t know about. - Charging an old item collection fee could reduce the positive effect of the take-back program, but this was not measured. 🏢 Companies using this - Companies are often resistant to circular initiatives, as they (wrongly) worry they reduce competitiveness. - However, in recent years fast fashion and popular consumer goods companies started offering such programs as part of their sustainability efforts and messaging: - IKEA collects old mattresses. - Patagonia upcycles old Patagonia T-shirts into their Tee-Cycle collection - Adidas allows its club members to send in clothing items to be resold or reused - Several countries have laws to ensure products can be shared, reused, repaired or recycled. Responsible product end-of-life management has been advocated in the EU and some US states including California, Maine and Oregon. IKEA offers a take-back program for old mattresses, although they charge a small fee. ⚡ Steps to implement - Introduce a circular take-back program to your business: - Allow people to return or collect old, used, and not needed items - Find sustainable ways to either recycle, retire, or re-use those products - If you need to increase prices to introduce a take-back program, that should not reduce your competitiveness. People’s willingness to pay increases too. - There is no need to offer take-back incentives (e.g. 10% off coupon for the next purchase in exchange for returned items) or to collect old items. - Shape your take-back program as a sustainability initiative. [It will create trust and signal quality of your products.]( Sustainable products also create [up to 6.4% higher revenue.Â]( - Be careful that a circular program might not work for you if you sell gifts, as the effect disappears when buying items meant for others. 🔍 Study type Lab and online experiments, field experiment (at an American university with 200 students), and market observation (analysis of 2,368 transactions at a reverse logistics company, 2015-2020) 📖 Research [Affording Disposal Control: The Effect of Circular Take-Back Programs on Psychological Ownership and Valuation.]( Journal of Marketing (August 2023) 🏫 Researchers - Anna Tari, Boston University. - [Remi Trudel](, Boston University. Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s [how science works](). It may also not be generalizable to your situation. 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