This post of mine was originally posted on the goodpurpose blog.
Once again, I realized that a conclusion that I drew one year ago on Corpprate Social Reality still holds true: there are a myriad of factors influencing consumers’ purchasing decisions, and purpose can be a point of differentiation for brands.
The goodpurpose study validates my claims. The most recent study found that when choosing between two brands of equal quality and price, consumers worldwide value social purpose as the deciding factor over design, innovation and brand loyalty. We’ve re-posted the old blog below, and hope you’ll take a look for insights into consumer behavior that should inform your business’ decisions today.
I was reading an old blog giving 4 reasons why most consumers don’t care about corporate ethics. It was an interesting read, and I will respond in more detail on the other issues at a later stage. But one issue stood out again – consumers just aren’t willing to pay the price. This typical excuse simply argues that people won’t do something as opposed to delving deeper into why people buy products.
If price is the only issue then Nike would not sell one shoe nor would Starbucks [disclosure: Edelman client] sell one cup of coffee. Okay, so quality has something to do with it, so (some) consumers will consider price and quality when buying a product.
So why do people in the US still buy American cars? A few years back, American cars were generally more expensive and of lower quality. But people bought them, because they were American-made. Okay so price, quality AND origin can all be part of consumer decision making criteria.
So why do some people buy from Home Depot instead of Lowe’s? They are equal in price, quality and origin. Well, maybe because the types and quality of services they provide cater to specific consumers. So consumer decision-making is about price, quality, origin and service.
And so on, and so on, and so on. There are always many reasons why people buy certain products and not others. We must realize that consumers are not a single robot or unit, but that everyone has their own criteria which they use to when making a decision to buy something. For some, quality ranks highest (that is why people are still paying $200+ for DVD players). For others, environmental impact or health attributes are most important.
Brand value is complex. And going beyond price and quality to include environmental or social issues in the brand positioning helps companies further differentiate their products from competitors. By going forward with corporate social responsibility messages, those issues become part of a range of brand elements.
Also, ethically-sourced products don’t necessarily have to cost more–although this is a common misconception. Some products might be more expensive, but corporate social responsibility (CSR) can also reduce costs and create opportunities. CSR is about doing business better – all around. If you are working with your suppliers to make them more efficient, you gain. If paying staff a decent wage can make them more efficient, you gain. If looking after the environment ensures you still have a product to sell tomorrow, you gain. As each consumer is different, so is each company. We need to acknowledge this and build the ‘corporate social responsibility solution’ around what makes business sense for each individual company and product or brand.