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Companies and retailers usually have at least one charity that they support. Much of that support comes from their own coffers, but evolved companies have realized they can generate incremental volume, loyalty and good will by aligning their values with those of their customers. There is brand equity to being socially responsible (especially among women and Millennials) and, additionally, shoppers love the opportunity to do good by being intentional in how they spend their money.
Just how big of an impact does social responsibility have on brand loyalty and buying decisions?
According to findings from the 2015 Cone Communications/Ebiquity Global CSR Study:
- 91% of global consumers expect companies to do more than make a profit, but also operate responsibly to address social and environmental issues
- 84% say they seek out responsible products whenever possible
- 90% would boycott a company if they learned of irresponsible or deceptive business practices
- 71% would pay more for a socially or environmentally responsible product
In a Brand X study we found:
- 28% of millennial moms said a corporate halo would affect purchasing intent
- 42% of boomer women believe going green is a scam to get their attention
- 62% of women do not feel brands understand the causes they believe in
- If brands institute a strategy for corporate halo you could see a lift in profits by 5%
Two key questions companies will have to answer going forward are:
- One – where is the intersection between our company values and those of our customers? Which programs align the best with our company? Which programs will resonate the most deeply with our customers?
- Two – which philanthropic/socially responsible programs will have the biggest impact on our bottom line? How do we measure the ROI?
Brand X is working on ways to conduct research that answers these key questions.
Estée Lauder’s Nancy Mahon is convinced, “Businesses perform better when they care about more than the bottom line.” Nancy is the Senior Vice President of Global Corporate Citizenship and Sustainability at Estée Lauder.
Estée Lauder walks their talk.
- 100% of sales from the MAC brand’s “VIVA GLAM” line of lipsticks goes to organizations around the world who help men, women and children impacted by HIV/AIDS. This initiative has raised over $340 million in donations since 1994.
- During Earth Month, Estée Lauder’s AVEDA line donates a portion of sales from certain products, raising $38 million for clean drinking water in rural communities since 1999.
Estée Lauder is very purposeful in its campaigns.
“If you don’t stand for anything [then] you’ll fall for everything, and the same is true for companies,” Mahon said. “We see these companies with just these paste-on good works programs and they just don’t resonate with the employees or the customers. What we are trying to do is build a genuine program and do it as big and good as we can.”
Too many companies try these “paste-on good works programs.” Doing a one-off campaign may not resonate with customers or have any real ROI. And while “doing good” is important, there is a business case for these efforts and companies are struggling to measure the true effect on the bottom line.
“’From a business perspective, we want to better understand how these cause initiatives better feed the business,’ [Mahon] said. ‘If there is a choice between buying a product that does good and just buying a product for themselves, customers are more likely choose to do good.’”
“When Mahon looks to refine these philanthropic campaigns across brands, she is limited in where she can turn to for more information. She can see if sales of other products went up after the campaign started, and she can also see any increase in customer loyalty. But she can’t tell if selling a charity item seasonally raises more money than selling it year round, and she doesn’t know how product placement within stores fuels giving and lifts sales.”
The Need for More Research
Like many other companies, Estée Lauder would love to have better data and research on the impact of their charitable programs.
“Collecting more refined data on how philanthropic initiatives fuel the bottom line would also give Mahon more bargaining power internally when she is trying to push through a new charity campaign. While executives who would like to use a certain amount of capital to open a new store can point very clearly to how the investment will grow the business, Mahon’s pitch is fuzzier. That’s where Estée Lauder’s ‘real commitment’ to giving helps her cause, but Mahon says better data would help her build her case.”
West Elm is a branch of Williams-Sonoma. According to its website, “West Elm was born in Brooklyn in 2002. A branch of Williams–Sonoma, Inc., we’re focused on the intersection of modern design, affordability and community. Everything we sell—from sofas and tables to bedding and vases—is made with one goal in mind: to help our customers express their personal style at home and in the world.
We care about impact too. By designing over 90% of our products in–house, our design team has steadily increased our selection of organic, handcrafted, sustainably sourced and Fair Trade Certified™ products.”
West Elm takes a multi-prong approach. It works social responsibility into almost every part of the company from design philosophy to how products are sourced. It also offers specific products where a portion of the sale goes to one of several charities chosen by the customer.
For example, West Elm offered a “holiday charity partners – give the way you live” program. On its website, customers could go to a special page and buy a “charity gift.” 50% of the purchase price goes to one of the non-profit organizations it partnered with including organizations like the ASPCA, St. Jude Children’s Research Hospital, Teach for America and Aid to Artisans.
West Elm LOCAL is a way stores support their surrounding community by featuring products from local artists and craftspeople. LOCAL started at just 2 stores but has now expanded to over 90.
Social responsibility, charitable partnerships, and a local community focus combine to create a shopping environment that seems to resonate with West Elm consumers.
Panera Bread recently announced that, “Our entire U.S. food menu and portfolio of Panera at Home products are now free from all artificial flavors, preservatives, sweeteners, and colors from artificial sources as defined by the company’s No No List, inclusive of 96 separate ingredients and additive classes.”
This is an important trend in the food and beverage industry as more companies try to connect with health conscious consumers.
Pretty much everyone has heard of TOMS Shoes. “The company offers two [principal] lines: footwear and eyewear. The Toms ‘One for One’ formula couldn’t be simpler: they sell a pair of shoes…then they give a pair to a child in poverty. When TOMS sells eyewear, some of the profit goes to sight restoration in a developing company. TOMS has received many accolades, including recognition by Fast Company as a leading retail innovator.”
TOMS’ program is very simple and effective. The company IS socially responsible at its core; they are seen as promoting world health; and consumers feel they are doing good when making a purchase. It’s a win-win all around.
American Girl followed TOMS example, at least for a certain time period. In partnership with the Children’s Hospital Association, the Mattel-owned maker of “inspiring products for each stage of a young girl’s development” pledged to donate one doll for every doll purchased to a hospital in the 200 member association.
If it’s any measure of the volume that American Girl does at this time of year, headquarters clarified that it would limit its donation to 1,000 dolls per day. Senior marketing VP Kathy Monetti said that American Girl fans have a “deep emotional connection with our brand.”
WHY THIS TREND IS IMPORTANT
Social Responsibility is very important to women and Millennials. In developing programs to appeal to these two main consumer groups, including social responsibility as a core company value will help to make a deeper emotional connection. For companies looking to develop such a program or continue one, research will be critical to uncover customer values. In these politically charged times, it’s important to make sure the company’s socially responsible programs align with their most profitable customers’ values.
While measuring impact on the bottom line is important, it’s also crucial that these programs feel authentic and genuinely match with the overall brand. As we discussed before, “paste-on good works programs” are rarely effective. Women and Millennials want to see alignment in everything the company does. Companies and brands will have to be able to articulate the “why” behind these programs. Any efforts that appear cursory will not be rewarded and could even backfire.
That is why it’s critical to utilize research that will help measure impact by identifying and tracking consumer attitudes, monitoring consumer communications and activity with social listening and netnography, and even evaluating various potential charities or donation-receivers. Brand X is using these market research technologies to give our clients cutting edge data and consumer insights.
Ask Brand X how our next generation research can give you the deep understanding you need to prepare for the future and win the business of your fastest growing customers. Brand X is recognized as one of the foremost authorities on female consumer research. We’ve performed well over 3,000 research studies with women all over the globe. We bring that intellectual capital to help our clients create successful outcomes.< Back to Trends