Green Business and Maslow’s Hierarchy of Needs

“Three out of 4 small business owners found a green vendor to be more appealing than a non-green vendor if the service and price are the same.” (Emphasis added.)

This statement comes from PayCycle, a payroll service from Palo Alto serving 85,000 small businesses. Recently they did a survey of 202 randomly chosen businesses from among their customer base, and that was one of the conclusions.

This result sounds realistic. Here’s why: notice that it focuses first and foremost on service and price. Those two factors will resonate loudest with the largest group of small businesses. More importantly, those are basic survival needs of small businesses.

Green initiatives have to take their place under a kind of Maslow’s Hierarchy of Needs for businesses. Maslow’s theory says that the most basic needs have to be met first, before higher needs can be considered:

At the lowest level of the pyramid are survival needs. In business terms, that is price. A small business needs an affordable price from a vendor. Cash flow is usually at a premium and small businesses operate on narrow expense budgets.

A second survival need is service: The difference between good service and poor service can prevent a small business from in turn properly serving its own customers. In extreme cases, disruptions in service from a vendor can put the small business out of business.

Only when those two needs are satisfied and survival ensured, is it rational to turn your attention to whether a vendor is socially responsible. Idealists and environmentalists may wish this were not true. But for most small businesses it’s just a practical matter of meeting one’s survival needs. First and foremost you have to stay in business (or you won’t be supporting any green business initiatives).

Just like Maslow’s hierarchy, once the survival needs are met, then the business can start to realize the higher level needs that are based on emotion and esteem (i.e., being held in high regard by society). That includes acting on values that are socially desirable, such as green principles.

That’s why adopting green values and principles in your business matters to customers — but only after the customer’s basic needs are met.

Earth Day is April 22, 2009. Will you be committing to a green initiative?

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.