More than two-thirds of Americans say they consider a company’s business practices when deciding what to buy, according to the 2007 Cone Cause Evolution Survey. At the same time, there is a substantial increase in the number of American workers who want their employers to support a social cause or issue.
The latest study in Cone’s 14 years of cause marketing and corporate responsibility research indicates a continued evolution in consumer thinking about the ways businesses interact with society.
“Cause marketing efforts have a proven impact on sales and remain effective ways for a company to express its heart and humanity,” says Julia Hobbs Kivistik, executive vice president of the firm’s Cause Branding practice. “However, there has been a radical change once again in the value equation involving consumers, companies, and society.
“Good business primarily used to be about providing fair value, decent service, and high quality. Then it expanded to include a company’s societal role and contributions. Now, companies have a strategic imperative to also consider their operating practices and how they impact their social commitments. Today’s informed consumers are now asking, ‘Is this a good company?’ and ‘What does it stand for?’”
Across a broad range of industries, business practices are now an additional purchasing influence for approximately one-third of American shoppers. Another third of consumers consider both social issues and business practices when deciding what to buy. An overwhelming majority of Americans (85 percent) say they would switch to another company’s products or services if a problem with business practices was uncovered.
Americans’ expectations of companies are at an all time high: 83 percent say companies have a responsibility to help support causes, and 92 percent acknowledge they have a more positive image of a company that supports a cause they care about. In many areas, Americans are more likely than ever before to reward companies for their support of social issues. Eighty-seven percent are likely to switch from one brand to another (price and quality being about equal) if the other brand is associated with a good cause, an increase of more than 31 percent (from 66 percent) since 1993.
Americans also consider a company’s commitment to social issues when deciding:
• Which companies they want to see doing business in their communities (86 percent, up from 58 percent in 2001)
• Where to work (77 percent, up from 48 percent in 2001)
• Which stocks or mutual funds to invest in (66 percent, up from 40 percent in 2001)
However, slightly less than a third (30 percent) have told a family member or friend about a product or company after hearing about a company’s commitment to social issues, a decline of 30 percent (from 43 percent) since 2004.
“Cause marketing has come of age,” says Carol Cone, chairman and founder. “Consumers expect companies to support social issues, and companies have responded in a variety of ways, from multi-year, multimillion dollar commitments, to something as simple as adding a ribbon to a package or ad and donating funds to a nonprofit. The ‘ribbonization’ is no longer breaking through—so, in the past year, the likelihood of consumers to use word-of-mouth communications has dropped.
“Companies must now identify the issues that have the most relevance for both target stakeholders and their business. And, their social issue programs must be authentic, sustainable, transparent, and well-communicated.”
American employees’ expectations of companies have also increased, and quite dramatically: 72 percent wish their employers would do more to support a cause or social issue. This has climbed 38 percent (up from 52 percent) since Cone’s last survey in 2004.
Employees familiar with their companies’ cause programs indicate:
• They are proud of their companies’ values (88 percent)
• They feel a strong sense of loyalty to their companies (89 percent)
• It is important for their companies to provide them with opportunities to become involved in causes (93 percent)
“Employees are a company’s most valuable currency—they are the brand touch points, the ambassadors of a business,” says Cone. “Because of the advancements in technology and the Internet, there is no longer a separation between the workplace and community. The workplace has become community for today’s employees so it is important for companies to deeply engage with them through purposeful work around causes and through communications about their business practices which are aligned with these causes.
“When companies inspire their workforces in this way, employees will be proud and loyal and will carry forward positive messages about their companies to their families and friends.”
Advertising and the Internet are the two main ways Americans prefer companies to communicate their social and environmental issues and practices (45 percent and 41 percent respectively). Americans are also using technology proactively to learn about and support social and environmental issues and causes. More than one in five (22 percent) have used the Internet or other technologies to engage in grassroots activism. Others are searching for information on issues (37 percent) or are forwarding important messages to family and friends (38 percent).
“Consumers have always relied on word of mouth recommendations to influence their decision making, and the increase in prominence of viral communications has made this form of idea exchange even easier,” explains Kivistik. “When a company communicates its cause activities in relevant, emotionally compelling ways and highlights the related social impacts, consumers will pass along the message to those around them.”
Many companies are choosing which issues to support based on where they can deliver the most meaningful business and social results to their stakeholders. Nine in 10 Americans say companies should support causes that are consistent with their responsible business practices. Eighty-seven percent say they want a company to support issues based on where its business can have the most social and/or environmental impacts.
Healthcare remains the leading issue Americans want companies to address (80 percent). Education, environment, and economic development (job creation, income generation, wealth accumulation) tie for second place at 77 percent.
“Today’s companies have a tremendous opportunity to look at social issues through the corporate lens of where they will have the most impact for their employees, customers, and the environment,” says Kivistik. “Americans are attuned to the larger societal issues brought forth by globalization. They recognize that often the greatest impact a company can have is to support an issue that is aligned with its business (for example, supporting health or economic issues that affect the workforce or environmental conservation). They want businesses to address these issues in transparent and sustainable ways and ‘walk the talk’ in how they operate.”