Arnold on ethical marketing

CHRIS ARNOLD

“There’s a recession on, so no ones going to be interested in ethics”, was a comment I heard recently from one client (whose business is suffering). Let’s call him Mr Magoo, short sighted and heading for a crash.

He is totally wrong, and even though his business is in the financial arena, his dismissal of exploring ethics as a value that he could be using to drive new sales is narrow minded at the least, and damaging to his company as the worse.

In areas like banking and insurance, where there is little to differentiate one company from another, ethics can be a strong emotional differentiator. If we have to pick between two products, similar price, similar offer, who wouldn’t pick the one that emotionally makes us feel better. After all, branding is about emotional content and building trust. And ethics is a great way to build trust fast. I’d be very worried as a shareholder of Mr Magoo’s company. His sales are down and I will predict they will slide further.

He will try and compete on price but there’s always someone cheaper. He’ll try promotions, but that’s a desperate way and means giving away margin. Instead he could do what wise marketing men do, add value.

A recent report, the Elderman Goodpurpose study, should make enlightening reading to any marketer. Far from abandoning good causes in a recession we not only stick by them but gather together and can be more socially aware. You only have to look at any disaster or crisis to see that human beings unite when there’s a common enemy (recession in this case). 71% of global consumers said they were sticking to supporting good causes, and many said they were giving more.

The pound (or zen, dollar, franc or euro) in your pocket can say a lot about what people feel and think especially when the consumer is using it to make a point. 68% of people said they’d remain loyal to a brand that supported good causes in rough times (good causes can be anything from charity to environment). 55% of people will buy from a brand that supports a good cause, despite costing more. And 80% think it’s important that brands support good causes.

Consumers are sticking by the ethics but what about businesses? Alas, many see environmentalism as a nice to have rather than a need to have. Saving the planet is cut as soon as the company wants to save money. In the U.S. many marketing directors admitted that ethics was not top of their list any more. Even without the recession we are living in a time when community is growing in part due to the internet and in part to a feeling that society has become divided and people want to get back together (a trend spotted by recent data from the National Bureau of Statistics).

Community is a very important ethic and because brands need to engage both individuals and communities they cannot ignore it. Adding community based values is a great way to engage consumers on mass. There is a difference between ‘value’ and ‘values’. One is about what you get for your money, the other is why you do what you do. Big corporates that abuse people and the planet, companies that put profits first and are driven just by greed and shareholder value are out. Consumers are looking for the ethos behind the brand, and the ethos is the reason why a company does what it does.

Consumers want to know that a company isn’t just driven by money, we are almost returning to the era of Quaker businesses. The blame for the recession has been laid on those that were greedy and were only interested in money. We are entering a new more spirital age where people are embracing new values. Just as pre revolution France became divided by values – the rich vs the poor, so we are starting to see a similar divide in society between those whose only value is profit and those that see profit as an outcome of having people and planet values.

A quote from an old article on ethical business in America reads, “making money by being emoral is short sighted because you’ll soon be found out. Making money by being moral will mean you’ll succeed long term”. We have been living in an age of short sightedness, like Mr Magoo we haven’t been looking far enough ahead to make the right decisions.

Remember when brands wrote 5 year planes? Instead, the temptation is to chase the short term blip on the sales line. Many brands have become so reactive they have little time to be proactive.

Yet a long term view and an open mind is exactly what will help most brands through a recession. Ignorance is a dangerous thing, especially when it’s based on assumptions. And assumptions seems to be the basis of much marketing these days. Following conventional wisdom has two problems, one, being conventional is a good way to get left behind by the consumer and second, what we think is wisdom rarely is.

Those who think that a recession means consumers have stopped caring about ethics will be the first against the wall when the recession ends.