It's not surprising. Most of the attempts to measure the correlation between corporate social responsibility and sales or even stock price have been statistically feeble, and have been outweighed by the ease with which any devil's advocate can name dozens of greed-is-good capitalist companies that have ridden roughshod over anyone and anything and reaped massive rewards doing so.
Finally, however, the ties between doing good and doing well are becoming impossible to ignore, even for the most die-hard Gordon Gecko. The obvious reason is that the internet has politicized everything and created a newly informed consumer, but there also seems to be a simultaneous change in younger consumers' thinking: Their ambivalence to the politics and protest that were so much a part of boomers' lives seem to go hand in hand with an understanding that big business is in control today and that their purchasing patterns are their power.
The most recent study from Cone Communications found that 87% of consumers will switch from one brand to another comparable one based on its association with a good cause -- that's up 31% since 1993; 66% consider a company's position on social issues when deciding on buying its stock, up from 40% in '93.
Of course that's just what people say. Still, increasingly, consumers are walking the walk. You want examples? Read The New York Times piece from last Monday about the success of Fair Trade coffee, which has rapidly grown its share of the U.S. market to more than 10%. Consider that even though Toyota hybrid buyers no longer get a tax credit, the company is still enjoying double-digit sales increases -- 12,500 were sold in September, up 23.8% on '06.
Or look to American Apparel, which has been pushing its Los Angeles manufacturing plant and fair-pay-for-workers approach for some time now, yet enjoyed 24% same-store sales growth in the first half. And pick up a copy of Kiplinger's Personal Finance, not an organ given to promoting fluffy concepts, which just published an entire issue based on the premise that investing in green companies is a smart strategy.
To be successful in such an environment, a lot of brand managers will have to think about their companies' reputations and not just their products' attributes. They will also have to learn to stand for something bigger and more complex than a brand position.
Steve Hayden, vice chairman of Ogilvy, has spent some time researching the impact of the empowered consumer, the erosion of trust in corporations and the increasing influence of word-of-mouth and believes that there's a shift that needs to take place from agencies looking for big ideas to agencies looking for "big ideals." He has a simple, fill-in-the-blank exercise he's using to try to find that ideal: "Brand X believes the world would be a better place if ..." In the case of Ogilvy client Dove, that'd be "if women were allowed to feel good about themselves."
Sure it's another agency shtick, a tool designed to help pick a communications tack that'll be a conversation starter and not just a one-way media push. But for those brand managers who've rarely considered anything beyond price, product, place and promotion, it might be a useful first step into a marketplace in which the Four P's are no longer enough.