Do No Evil: Consumers Willing to Pay for Socially Responsible Products

tm_bw_hemzacek

Director , Business Development

“Don’t be evil.”

philanthropy

It’s a little hard to imagine that one of the world’s largest companies, just a few years before their initial public offering, used this phrase as their official corporate motto. I’m talking of course, about Google. In the decade since their 2004 IPO, the search engine has blossomed into a $50+ billion behemoth.

Whether or not Google remained true to its pledge, the tone of the company’s original corporate motto was a sign of things to come. And that’s the growing social marketing movement. It is fast-becoming the go-to marketing strategy for trendy products. Who would have thought that what’s good for your soul, can also be good for your bottom line?

A recent Nielsen study found that 42% of consumers said that they would pay extra for products that had a “positive social and environmental impact.” 49% were “extremely concerned” with buying from companies that helped provide access to clean water. 46% felt the same way about companies that combated diseases like diabetes or cancer. 45% were “extremely concerned” about purchasing from companies that helped combat poverty and hunger.

But does that translate to increased sales? Yes! 40% of respondents said they paid extra for a socially responsibly product in the last 6 months. According to Nielsen, companies that mentioned social responsibility on their packaging saw sales increase 2%. When companies emphasized a similar message in their marketing campaigns, they saw jumps as high as 5%.

“It’s no longer a question if consumers care about social impact; consumers do care and show they do through their actions,” said Amy Fenton, global leader of public development and sustainability, Nielsen. “Now the focus is on determining how your brand can effectively create shared value by marrying the appropriate social cause and consumer insights.”

Of course, this tactic is nothing new. Companies like Tom’s Shoes and Newman’s Own were literally built on corporate social responsibility. In Tom’s business model, each purchase is matched by a donation of shoes to a developing country, a move that has put them at the forefront of socially responsible brands. Starbucks, which has a history of promoting fair trade coffee, recently unveiled a plan to offer their baristas a free college education. A slew of corporations encourage employee giving with donation-matching and volunteer outings that double as team building. This isn’t just good for company karma. It’s good for public perception and great for sales.

As information about companies’ social responsibility programs becomes widely available to consumers, brands will have to keep up on their philanthropic game. That’s partly why in 2010, CBS acquired EcoMedia, an innovative organization that puts ad dollars to work for social good. EcoMedia tackles a variety of social issues through educational, environmental and wellness related projects. We’re extremely proud of the change EcoMedia has effected in the industry.

Here at the Altitude Group, we’re teaming up with A-list artists and corporate sponsors to put on the WeCanSurvive benefit concert. A portion of the proceeds from “We Can Survive” goes to the Young Survival Coalition, a global organization dedicated to educating and helping younger women diagnosed with breast cancer. It’s a great concert supporting an even greater cause.

The latest data about social marketing shows, consumers care about supporting companies that care. It’s a trend that makes me incredibly optimistic about the future.