Consumers Believe They’re Eager to Pay More for Do-Gooder Products
Check out this recent article from Bloomberg Businessweek what customer’s are willing to pay for:
Even the most earnest social-responsibility efforts are often tied deeply to corporate marketing goals, a long-standing link that appears to be growing stronger. Research by Nielsen (NLSN) has found that consumers are attracted to such initiatives and are even willing to pay additional money to satisfy do-gooder instincts. For companies, it seems that doing good is an increasingly viable sales strategy.
In Nielsen’s online survey of 30,000 consumers in 60 countries, 55 percent of respondents said they would pay more for products and services from companies committed to positive social and environmental impact. The age group most likely to say they’d pay a premium: millennials. “Precision marketing and knowing your consumers intimately will yield the greatest results,” wrote Amy Fenton, Nielsen’s global leader of public development and sustainability.
Still, people don’t always practice what they preach to public-opinion pollsters. The putative Bradley Effect, for instance, is named after a black candidate for governor of California who lost a 1982 election despite having enjoyed a lead in the polls. By this thinking, some voters might make a conscientious claim to pollsters—such as affirming a willingness to vote for a politician of a different ethnicity—and then follow baser instincts in the privacy of the voting booth. It’s easy to imagine that a similar disparity between intention and action might prevent shoppers from opening their wallets wider for a socially redeeming product. The Nielsen survey did not ask exactly how much more money people would be willing to pay to support a cause.
If a company were to take consumer responses to the Nielsen study at face value, where would a marketing blitz be likely to pay off? Given that Starbucks (SBUX) just committed to pay for staffers to attend Arizona State University’s online bachelor’s degree program, company officials might be disappointed to find that education isn’t consumers’ top concern: The world’s premium-paying consumers cared most about access to clean water, Nielsen found, followed by access to sanitation and environmental sustainability.
Labels are a marketer’s best friend, as as food companies discovered when consumers said they would pay a premium for claims such as “locally sourced” and “certified organic.” The Nielsen research found, in a retail analysis, that sales of products marketed as socially responsible grew more quickly than those of comparable products:
“The results from a March 2014 year-over-year analysis show an average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of 14 other brands without sustainability claims or marketing shows a sales rise of only 1 percent.”
To capitalize on sustainability initiatives, Nielsen offers companies this road map:
1. Vision: Be clear, practical, and global.
2. Endorsement: Get adoption and action from senior leadership.
3. Strategy: Focus on outward messaging and consistent cause messaging.
4. Accountability: Use key performance indicators, internally and externally.
5. Measurement: Quantify program outcomes and return on investment consistently across markets.
Click here to view the original article with accompanying graphics.blog comments powered by Disqus