There was an important and potentially market changing report released by IBM last year called ”Attaining Sustainable Growth Through Corporate Social Responsibility,” that the sustainability lobby and bloggers picked up, but marketing bloggers seems to have ignored. So here is the video on it for those who missed it.
Now, there is likely to be a belief that because of the recession, we can throw out all of this information. We can unwind our CSR efforts. Finally go back to massive cost cutting and focus on the bottom line by continuing to do business in the way we once used to, without having to worry about ethics. When it comes to the recession, ethics fly out the door. Or does it?
Consider the massive consumer and even governmental back-lash against the massively unethical behavior of the banks that threw the world economy into a tailspin. Governments are calling for more regulation and an end to runaway capitalism. While consumers are calling for a return to the old-days when bankers were trusted members of the community and knew their individual customers. Take a look at the latest Natwest campaigns on YouTube to see where that industry is headed.
The fact is, we are entering an age where CSR will be what keeps a brand from tanking in the post-recession world. So though marketers and CEO’s might be inclined to shelve their CSR plans (for now), they may want to think twice and start using the recession as the reason to re-engineer their marketing departments and their business.
Here are four ways for companies to rethink the way they approach marketing in order to ensure coming out of the recession ahead of the competition.
Re-thinking corporate marketing
The most worrying statistic in IBM’s report is that 76% of surveyed business leaders don’t know their customer’s CSR expectations. Read another way, one could almost say that these business leaders don’t really understand their customers at all. They may have insights into the consumer’s purchasing patterns, but they don’t really know what makes them choose one product over another, let alone what they really think concerning ethical behaviour. For marketers to really understand today’s consumer market, there are some fundamental marketing behaviours that need to change.
First, marketers should no longer attempt to classify and pigeonhole customers into artificial segmentation models. These are old-fashioned research methods that belong in a previous age and should be left behind. Marketers need to recognise and identify people as individuals, each with their own unique needs and desires. Against popular perception, powerful privacy busting databases are not needed to do this. One simply has to be in a position to ask them to share the information, or better yet, to empower them with better ways to control and share their own data.
Second, marketers should stop thinking in terms of persuasion, selling and manipulation. Marketers have been waging psychological warfare against their customers for decades, and many still continue to do so. Armed with the latest psycho-babble from their ad agencies, they rush out to attack the individual’s sense of purpose, family, confidence, self image and integrity and to supplant it with a belief that shopping cures all ills.
Not content with brainwashing adults, many marketers are even falling into the legal and ethical landmine that is marketing to children, in the belief that brainwashing a future generation of consumers will ensure long-term growth. In truth, they are merely opening themselves up to an extremely litigious future, when parents of these children start class action suits against these companies for violating parental rights. The law may appear to insulate today, but laws change as quickly as the politicians who push them through. And what is legal today, necessarily won’t be tomorrow.
Third, marketers and CEO’s both need to stop thinking CSR as a public relations department or a new form of marketing opportunity. As Benetton and Marks & Spencer have learned, there is massive business growth for companies who embrace CSR, not as a new product division, or even as a communications platform, but rather as core business practice, one that runs horizontally and vertically through the organisation. One only needs to look at the runaway success of companies such as CaféDirect, Innocent Drinks, Body Shop, FairTrade labelled products and many other new players, to realise where the consumers’ money is going to be spent. These ethically focused companies will dominate the 21st century post-recession landscape.
Even the term marketing itself is out of date. A new term should be coined to more accurately describe what these departments need to do. Perhaps Customer Partnership Manager or Community Engager would be more accurate titles.
Fourth, marketers need to be empowered by CEOs to focus on delivering results annually or even bi-annually rather than quarterly. And their benchmarks shouldn’t solely be focused on sales returns. By changing the measurements for marketers, CEO’s can empower their front-line to think and act strategically over the long-term, rather than tactically over the short term.
Concepts such as, ‘the lifetime environmental and social costs of a product or service’ need to be part of the marketer’s daily vocabulary. They need to be able to think about softer but critical issues such as ‘consumer confidence’ and ‘trust’ over profit margins. The current trend of overcharging for ethical and organic products on the premise that customers will be gladly pay extra for a clean conscience is happening because marketers still prioritise their commercial imperative to endlessly increase profit. The real cost of this bi-polar thinking is a growing damage to brand reputation.
For example, there is growing resentment among consumers who buy high-priced organic products that they are being ripped off in a land grab by opportunistic supermarkets. So as one hand of a supermarket brand is trying to create a sustainable and ethical reputation by committing to FairTrade, organic and local sourcing standards, their other hand is seen as robbing customers blind.
There is a way forward, but one which will be a bitter medicine to swallow for today’s profit obsessed marketers and CEO’s. That medicine is called total transparency, and it requires a great deal of trust and faith between the corporation and the consumer. That trust and faith can be developed at low cost using the Internet.
