The Social Investment Consultancy (TSIC) recently hosted an exclusive dinner with a group of forward thinking branding and marketing executives to debate whether being social innovators can actually deliver tangible benefits for a brand.
Against the backdrop of two recent reports stating:
– 53% of consumers would pay a 10% premium for a product produced in a responsible way. – 92% of millennial believe that “businesses should be measured by more than profits”, compared to 71% of business leaders. our team was keen to test whether these statistics are actually influencing the way brands think about their role in consumers’ lives and their role in society.
Around the dinner table, it was quickly clear that we’d gathered a diverse group, all with varying opinions – ranging from those who believe that ‘social responsibility’ is a no-brainer to businesses, to those who think that its a marginal concern, to those who (bravely) admitted to have lost faith in charitable initiatives.
Among the opinions and the many examples (and counter-examples) that were offered over the course of our meal, there were three clear points of consensus –
1. Consumers do care about the ethical or social credential of a brand, but only among products with a low degree of differentiation – hence why product categories such as bottled water are being flooded with charity-linked brands. On the contrary, in highly specialised categories, such as consumer electronics or cosmetics, social credentials matter very little to the end consumer who buy based on functionality and effectiveness. An important lesson for those of us driving social change is to target the right brands – being ethical will produce far more tangible results for some products than others.
2. Businesses need to think beyond the needs and interests of their existing consumer groups, and look at how they can improve the circumstances of those who have the potential to be future customers. One example, closer to home, is a technology company that is supporting educational initiatives in low-income communities to help grow their pool of future consumers – driven by the fact that individuals with a higher level of literacy and numeracy skills are more likely to use and benefit from their products. This is a case where there is a clear alignment between a community need and the future viability of the business.
3. Social credentials are often more important in emerging markets, where community support (and in some cases explicit approval) is crucial in winning public contracts or helping to build trust among consumers. Just as a mining company would need to consult the community on the social, economical and environmental impact of their work, a consumer goods company would also need to compete with incumbent local brands that may be sourcing from, or employing members of the local community. Being able to operate in emerging markets also requires that businesses become more attuned to issues of inequality – regulators and consumers in these environmental can be much more demanding of their partners and brands.
For us at TSIC, it’s really exciting to see the desire to support social change transcend beyond the Corporate Social Responsibility department and into other core functions of a business – to help differentiate a brand, grow the pool of future customers and support expansion into new markets. The business case for being socially responsible is becoming more clear – will a new generation of consumers and employees (‘the millennials’), as well as the license to operate in emerging markets, force business to put social issues at the forefront of business decisions? We’d love to hear your views.
1. Havas Media, Meaningful Brands 2011, online polling of 50,000 consumers across 14 markets.
2. Deloitte, The Millennium Survey 2011, polling of 1,000 individuals and 390 business leaders across the world.