Before we start, I have to apologise as I had wanted to find 10 reasons for why we might still need politicians, but became stumped after the 6th. If you can think of another 4, please do send them to me and I will add them to the list.

1)   Politicians create a peaceful society by giving us people to hate.

Let’s face it, if we didn’t have politicians to hate, what would we do? Probably turn on each other like a pack of blood-crazed sharks, screaming at each other over the smallest invasion into our personal space on the Tube and driving each other insane with endless tirades of frustration. Luckily we have politicians to take the blame for all that is wrong with our world and our own lives. So in a sense, having hateful politicians run our country actually creates a peaceful society by focusing our anger on them, rather than each other. Go figure.

2)   Politics gives people who are otherwise unqualified and unemployable anywhere else a career choice.

I always find it remarkable how politicians seem to be the most unqualified people on the planet to do their jobs, with albeit, a few exceptions. If we didn’t have all of these endless Ministerial and quango related jobs, what would these people do for a living? Seriously. The poor sods would probably just end up on the streets. So in a sense, we are reducing homelessness here by keeping them elected.

3)   Politicians enable national happiness.

Now you might think this is really a stretch. I mean, “brings happiness.” Just what am I on about, ‘eh?’ Well, look at it this way. The one thing we can rely on government to do consistently, is to be wholly inefficient at running anything really. So we grow up thinking that society is this extremely inefficient entity. Then when we come across a service or business or anything really, that is even moderately efficient, we are simply delighted! So by lowering the bar for the entire country, the government has made it possible for business, to actually surprise and delight us, on occasion of course. One can never have too much of a good thing after all. That’s just not on. And on the whole, we as individuals always feel smarter and more efficient than the government, thus we get this fantastic boost in confidence, that contributes to our overall happinesss.

4) Politicians keeps comedy and satire alive.

Who can forget the brilliance of Spitting Image’s portrayal of Margaret Thatcher in the 80′s. Satire has thrived for a hundred years as a result of political shenanigans. And as a result, satirist, poets, artist and comedians all have been able to stay gainfully employed as a result of the endless wealth of creative material politics and government creates for them. Life would be simple less rich without the like of Mark Thomson and Ben Elton. Though to be sure, politics also gave Oliver Stone something to do, so there are a few downsides as well.

5) Politicians keeps the news industry going.

Well, one thing you can say for politics is that it surely does sell newspapers and drive TV audiences. I mean, how many people watched Obama’s election? 400 million? More? In Britain here, how many words have been written about the MP Expenses Row? Several million at least.

Which each new scandal, papers literally fly off the shelves. And let’s face it, if politicians are said to do one thing well, it’s creating scandal. One could even go as far and say that if it weren’t for politics, we might not have any news to watch or read about at all. Then again, that might be a good thing.

6) Politicians make the rest of us feel ethical and honest.

Funny thing about politicians. When they run for election, lobbying for your votes, you might think something like this: “He seems like a decent enough bloke. Speaks plainly enough. Seems to know what the problems are. Has some kind of solution, or not, but at least he recognises that there is a problem. Unlike those other jokers in office.” So you vote for him, and he becomes your MP. Sounds very straightforward really.

Then two years later, you find out that he has charged on his expenses, £250000 to maintain a nonexistent flat in Kensington, complete with John Lewis furniture and kitchen set and a home cinema kit that would make George Lucas envious, even though he already lives in a £1.2 million terrace in Chelsea, that itself was paid for, via numerous shell companies and speaking fees, by BAE. And here you thought that you were being dishonest by forgetting to pay your train fare last week! Seriously, is it any wonder that nobody wants to pay taxes anymore or that trust is at an all-time low? 

Just what is it about the high office that turned what you thought was a rather decent bloke, into a morally bankrupt crook? Well, hard to say. Perhaps it’s simply what’s expected of them by their peers. You know, the classic, “everybody does it” defense. Or perhaps the old adage, “absolutely power corrupts absolutely” is true. Whatever the reason, it does beg the question, “does politics turn honest people into crooks? Or are all politicians really just crooks to begin with and they go into politics because they know there, they can get away with stealing?” I’ll leave you to ruminate on that one.

For the past three years, I have become a huge advocate of using the Internet as a way to create dynamic, lasting business change. There is a phenomenal amount of corruption, incompetence and greed in the corporate world, with AIG being just the latest example. If one were to compile a comprehensive global list using a 12pt font, it probably would be a mile and a half long. And toping the first tenth of the list would be much of the global banking, hedgefund trading and other financial industries that have so screwed up the current global economy. So while government’s tinker with throwing good money after bad into a system that is either corrupt, incompetent, broken model or all of these, here are my own strategies for how business could be using the Internet as a way to rebuild what they have lost and are in danger of never getting back, consumer trust.  

Strategy 1: Implement a policy of total transparency

We are currently at the cusp of a fundamental change in business, and even political thinking. Customer activism and watchdog groups are growing apace. Each day, they get better at revealing corporate and government dirty laundry. Each day they seem to gain greater access to information that was once considered confidential and proprietary, either through various freedom of information government movements, or a near endless resource of existing and former company employees whose own loyalty and trust have been wiped out by a decade of loyalty-busting labour practices. Each day, they are grow in influence among an ever-growing cynical consumer base whose most powerful weapon is the easiest to utilize, to stop giving money to people obsessed with other people’s money. Their message: “if profit is your sole reason to exist, your days are numbered.” 

The time has therefore come to fundamentally rethink the notion that secrecy is vital to the successful functioning of business and government. The Internet should be used to publish information proactively. Useful information to publish will depend on the nature of the business and product. For some, detailed ingredients lists, along with explanations as to what each ingredient is, its health risks and why it’s used, are important. For others, cradle-to-grave environmental statistics and policies will be key. How much energy did it take to make the product? How much to ship and recycle it? What materials are used in packaging, construction, so on, and how are they collected and recycled and by whom?

When mistakes happen, CEO’s and business leaders need to get tougher skin, fess up and talk about immediately. Errors are forgiven. Customers are actually reassured to know that companies are human after all. Lies and obvious omissions won’t be forgiven. They will make it look like you have something to hide and customer’s won’t trust you, something they are more inclined to do anyway.

US footwear company Timberland provides a useful benchmark on product information transparency. Their product labels, which are designed like nutritional labels, indicate the name and location of the factory where the shoes were made, the amount of energy used in production and the percentage of renewable energy used. It even shows the percentage of factories assessed against code of conduct standards and the number of hours employees have volunteered in the community. When it comes to information transparency, it’s safest to err on the site of too much rather than too little.

Price transparency is also critical, while also being the most difficult part of total transparency to implement. In much the same way as Marks & Spencers exposed what was behind its labels to reveal its ethical supply chain, price transparency shows the real cost of delivering a product to the shelves. What percentage of the product’s total price is made up by sourcing, manufacturing, packaging and marketing cost? What are the margins for the seller and the manufacturer? For many marketers, this is indeed a bitter pill as few customers will support a 400% or more mark-up, especially on household necessities such as chicken and eggs. This is where having ethics at the core of the company’s business will really pay off. Customers are probably more willing to pay higher margins to company that gives 100% of its profits to charity, and less willing to pay the same knowing that profits will go to finance the purchase of a super yacht for top shareholders. If you are not sure you should implement price transparency because you believe that consumers don’t know your real cost, here’s a simple exercise. Go to Google and enter: “the real cost of product x” or “profit margin on product x” where product x is what you sell. I ran this exercise on the cost of a pair of £100 Nike trainers (£2 was the conclusion) and on a $0.99 McDonald’s Cheesburger (89 cents was the conclusion). Whether or not these numbers are accurate is irrelevant. Because they’re the only answers I found, they’re now the only answer I believe. So you can let consumers dictate what people believe is the truth, or you can be transparent and let them know the truth and use good business strategy and product differentiation strategies to justify your profit margin.

Increasing label sizes to communicate all of this information can be daunting for a consumer to read and even counter-productive as it increases the amount of packaging. A more environmentally friendly solution is to use QR codes. Essentially square bar codes, QR codes can be read by mobile phones and link consumers instantly to websites. Larger codes can even convey the needed data in the code itself. With Nokia starting to ship new phones with pre-installed QR code software, the technology is becoming a feasible alternative to labeling.

Strategy 2: Foster dialogue with stakeholders

Business partners are typically considered to be critical stakeholders. However, a growing number of corporations are realising that they can’t monitor their long supply chain alone and are starting to partner with watchdog organisations and NGOs. As independent groups, watchdog organisations are often more effective than the companies themselves at finding out what is really happening in their own supply chain. By using the Internet to provide open communications between the NGO’s, corporate managers and suppliers, companies can stay on top of any violations of its codes of practice and change suppliers who fail to live up to them.

Partnering with employees seems obvious, but 69% of companies surveyed by IBM don’t partner with their employees. These companies view employees at best as resources that can be cut from the bottom line to suit quarterly profit returns. This short-sighted and dangerous thinking has completely eroded employee trust. Through the own behaviour, CEO’s have taught employees to look after their own personal interest above the company’s. 

By creating internal web communities that connect employees and management around the company’s CSR objectives and initiatives, employees can be empowered to drive real corporate change and customer confidence. They can share best practice, discuss problems as they arise and create solutions. They can participate in the charity process or even help shape the way it functions.

Strategy 3: Empower your customers

The final strategy is to view one’s customer base as partners rather than consumers. As partners, the company needs to empower them with the ability to help define and drive the corporate agenda and business practice. This goes far beyond UGC, or participatory marketing. As with the second strategy, customer empowerment requires using web 2.0 tactics to involve customers in every aspect of the business. In practice, this means letting local customers define the community issues that are most relevant to them. It means letting customers voice their concerns about the way the company does business locally and globally. It means giving customers a conduit directly to the CEO or even to Board management rather than filtering their opinions through layers of corporate bureaucracy. Board level decisions are too far removed from the customers that keep their businesses running.

Just as the NGO and watchdog organizations can be partnered with to follow one’s supply chain, customers can be partnered with to follow one’s reseller and sales network. Not all outlets will act in the best interest of the brands it sells. By encouraging customers to report overcharging or questionable service bundling practices, companies can reign in rogue sellers and protect their own customer base.

In short, the more information, control and involvement one gives to customers, the more likely are they to remain so for life. For involved customers are committed customers. And committed customers are far less likely to quite on you when times get rough or migrate to your competitors for a promotional gain. By involving and empowering customers in such a core, critical fashion, you generate a loyalty that far supersedes anything currently experienced by today’s loyalty programs.

Further reading:

http://www.prweekus.com/Profit-transparency-top-consumer-study/article/123629/

http://hbswk.hbs.edu/archive/1801.html

http://www.clickz.com/2221951

http://www.fas.org/sgp/crs/misc/RL34101.pdf

http://www.gaspricewatch.com/new/default_V3.asp

http://www.corpwatch.org

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.