Consumers Drawn to Do-Gooder Brands
By George Anderson
Maybe there is something to all this conscious capitalism stuff. A new study
by Landor Associates, Penn Schoen Berland and Burson-Marsteller finds that
consumers are drawn to brands they perceive as being more socially responsible.
According to the survey, 77 percent of consumers believe corporate social
responsibility (CSR) is important. The top two actions companies could take
to demonstrate social responsibility, according to respondents, are to give
back to the local community (20 percent) and engage in self-regulation and
accountability (19 percent).
“Social responsibility remains a differentiator for purchases. Though the
recession is causing consumers to be even more price-sensitive than usual, many
are still willing to put their pennies where their principles are,” said
Scott Siff, executive vice president of Penn Schoen Berland, in a press release. “And
when price is comparable, the choice is no contest – 55 percent are more likely
to choose a product that supports a certain cause when choosing between otherwise
similar products.”
While consumers are often more likely to support brands with a cause, most
are not actively seeking out those companies that fit the CSR description.
Only 11 percent were aware of hearing CSR messages from any company over the
past year.
The percentage of respondents who reported reading about a company’s
social agenda while on a website was just 13 percent. Seventy-five percent
of those, however, said they were more likely to purchase products from the
company as a result.
“While many consumers may not be precise in how they define terms like ‘corporate
social responsibility,’ they have a clear sense of how they expect companies
to behave. They expect companies to offer high-quality products at good prices
and to explain how they treat their employees well, give back to their communities,
and respect the environment,” said Eric Biel, managing director for corporate
responsibility at Burson-Marsteller. “Those companies that can clearly
articulate how they advance these values to consumers can achieve real benefits
for their brands and overall reputation.”
Of the industries tested in the survey, consumer goods manufacturers and retailers
are perceived as performing best. Financial services, healthcare and the media
were on the bottom of the list.
Discussion Questions: To what do you attribute
the high marks that consumers give retailers and consumer brands for corporate
social responsibility? Does consolidation within the retailing industry make
it easier or harder for companies to demonstrate a commitment to local communities
and attributes such as self-regulation and accountability?
Who would not say yes to a question asking whether companies should be socially responsible? I’d like to see the data that says “of the people who rate CSR as important, here’s the percentage that buy a set of products because the company is socially responsible.” This would be compelling to marketers and managers.
Everyone likes to do things that make them feel better about themselves. But down deep, we all know there really is not much to CSR. Most of that is just manufactured for the press release. The primary purpose of the retail corporation is to separate as much money from consumers pockets as legally possible and put it in the pockets of stockholders. There is nothing preventing companies to do more CSR, other than greed. After all, we are not Communists. Most retailers will do only what they feel they need to have to do and not a penny more — because their first and foremost responsibility is to the stockholder.
Putting pennies where principles are jumped out at me … everyone has different “principles” (and peeves that people frame as principles) which makes marketing to them quite difficult. Companies that take a big stand (one that puts an initial stake in the ground and can then be phased into multiple sub-initiatives) and stick to it rather than darting here and there are the ones that make a real impact.
Walmart’s sustainability efforts come to mind. Walmart managed to become a do-gooder brand rather than relying on the “brands within the brand” to make it happen. Some who liked Walmart to begin with became members of the fan club, those who were skeptical crossed over and even some in the “I shall not be moved” crowd grudgingly backed off and found someone else to rant about. In the meantime, Walmart was constantly in the press and engaging others in the conversation.
That’s a pretty big pay off and one that wouldn’t have happened if Walmart got distracted by other shiny objects along the way or hadn’t made an unwavering corporate commitment and stayed with it through all of the naysaying.
As poorly informed as the average American is these days on political issues and things in general, I find it very hard to believe that a significant amount of people will be moved by this. That’s not to say that I don’t think companies should try to do the right thing, but I also don’t think they should hold their breaths waiting for a payback.
CSR = Newman’s Own
There was a study done years ago that included a poll of graduating college students. One of the questions was, “Is making a lot of money your top priority?” The overwhelming response from the group was NO. Other questions, “Do you want a nice home?”, “Do you want a nice car?”, “Do you want to be able to take nice vacations?” (all of which require making a lot of money) were overwhelmingly answered YES.
Do we really expect someone to indirectly answer that they want to buy products from companies that hurt the environment or rely on child labor?
The real study is the relative financial performance. Talk is cheap, actions are what count.
I’ve been part of more corporate “vision” exercises than I can count. One of the most interesting and challenging ways to go about identifying one’s vision is to ask: “How will you make the world a better place?” In other words is what you’re doing through your business bringing beauty, joy, love, safety, health, confidence, prosperity, meaning, sustainability, knowledge to the local and/or global community?
What is somewhat disturbing is how long it takes most groups to answer the question. Even more upsetting is to see how many businesses literally don’t have an answer because they’re actually making the world a sadder, less hospitable place – and they make money doing it. The universe is a living interdependent system and doing good to it isn’t a PR or marketing challenge, it’s a survival issue.
Consumers love feeling they are supporting something that is supposed to be good, especially if it makes them feel good, has no risk, doesn’t take any of their time, and it doesn’t cost them any money. Why would they not support it and feel good about doing it?
Great article. One of the reasons CSR continues to gain momentum is the need for retailers to distinguish themselves when many of the products they sell are becoming commodities, especially in the online world. You can often buy the same product at similar prices on hundreds of sites. Once traditional competitive factors like pricing, shipping and user flow are addressed, retailers are often looking for something else to set them apart. All else being equal, most people will buy from the company that supports a cause they care about.
We have found that customers are willing to pay a little bit more at the time of checkout if the money will go to a good cause. Our service creates an electronic ‘spare change jar’ so that online shoppers can round-up their purchase and donate the spare change to a charity. Over 22% of the time customers decide to add a bit more to their purchase and donate. More interestingly, the average donation increases over a dollar because customers can select to donate more than just spare change.
CSR does not have to be rocket science, but it does have to be genuine. It is most powerful when a retailer can partner WITH a customer in support of a cause.
David Livingston, you could not be further from the truth. There is everything to CSR. The data says that when two products are equal everywhere else, over half the shoppers will opt for the CSR rich source, so in a world where I can get the same thing for the same price from 10 sources at one of the mega malls close to my house…CSR is one of the major defining factors.
I am not sure why you think there is not much to CSR.
This kind of arrogant thought process is usually from people over the age of 35 years old, who do not understand that in less than 3 seconds, I can take my iPhone, and Google/Twitter your name, to see what my peers say about you, and if you have a bad CSR. We do talk about it and I’ll know about it in 3 seconds. It’s the old “we tell 10 people about a bad restaurant and only 3 people about a good one.” So if you have a bad CSR policy, it’s three times as likely to have been spoken about as a good one, which means you better have a good one. It’s arrogant and extremely naive in today’s world of mass-easy-communication and data-availability, to think that companies only have to be responsible to shareholders. In fact, you have it backwards about large public companies being responsible to their shareholders first and foremost. This is incorrect again. First, they are responsible to their customer base, in providing the products/services to them. Secondly, they are responsible to the shareholders in what they do with the income from the sales.
Judging from the remarks in the article, I believe there is some confusion between what I would call “legitimate” CSR (i.e. not dumping toxic sludge along the side of the road) and “do gooder” CSR (donating your profits to charities). The former is essential for the economy to function optimally (since it internalizes costs) while the latter actually works against that goal. Sadly, though, since the former is often invisible, it is the latter that people will pay attention to…to the extent that they pay attention at all.
As the previous commentator said: who would say NO to social responsibility? The key point we ask our clients to consider before they embark on sustainability and social responsibility (they ARE different things) programs is that they remember they are primarily in business to make a profit. Along with that comes the inherent responsibility of every employer to provide a livelihood for their workers. The continuing popularity of writer Ayn Rand’s (Fountainhead) and her group’s philosophy is the backbone of this country’s economic system: take care of your company and you are automatically doing good to others. After all, sustainability is defined as ability to prevail. If a company is not sustainable, then whether they “do good” or not is moot.
It’s a bit of a surprise that consumers believe the top actions companies should take are giving back to “local community, and engage in self-regulation and accountability.” The first has no standards and the second two are the law.
The question of whether social responsibility is a differentiator is questionable, in part because if most everyone does the top three then there is no differentiation.
Furthermore, I don’t believe CSR should ever be a marketing strategy. Consumers and employees will see right through it.
Consumers will always tell us that CSR is important. It’s the rational part of the American psyche. The problem is we buy emotionally. Hence, the disconnect.