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Can Brands Save the World?

Eric McNulty

Eric J. McNulty is the director of research at the National Preparedness Leadership Initiative and writes frequently about leadership and resilience.

 

Melting glaciers. Increasing obesity. Oppressed workers. There are a lot of things to worry about these days. Business researchers often ask how individual behavior can be changed to mitigate the ill effects of risk-laden phenomena — how to get consumers to make sacrifices so business doesn’t have to pay for problems like underpaid workers and rising obesity levels. But they usually find that such changes are incredibly difficult to engineer. Marketers, on the other hand, usually want to know where the opportunities lie — even in global problems like climate change. For some companies, the opportunity both to address the world’s problems and to attract more customers lies in letting individuals do what they have always done well — consume — and having the brands make sacrifices instead.

Since well before the Mad Men era, brand marketers have conditioned us to think that we should look to them to meet our ever-changing needs (and whims) easily, often inexpensively, and usually without guilt. You may have thought this gluttonous consumption is how we arrived at overflowing landfills, immense plastic gyres floating around the Pacific Ocean, and vastly underpaid workers in low-wage countries. Perhaps. But now, according to a recent report from TrendWatching, an increasing number of brands are willing to undertake the costs necessary to reverse those social ills, and more, without affecting the consumer’s consumption habits. They call it “brand sacrifice.”

TrendWatching gives examples of brand sacrifice in each three categories:

·         Sacrifice for the self. CVS’s decision to stop selling tobacco products. The company sacrifices revenue in order to help its customers lead healthier lives, even when competitors like Walgreens decline to follow suit.

·         Sacrifice for society. Intel stopped using conflict minerals in its chips. Its customers (and all of the end users who buy an “Intel Inside” product) can feel better about a cleaner and less controversial supply chain.

·         Sacrifice for the planet. H&M and other retailers stopped selling angora wool because of animal cruelty issues in production.

Of course, not every sacrifice fits neatly into one category. Chipotle made news a few months back when it stopped selling pork in some of its restaurants because a supplier had failed to meet the company’s animal care requirements. Chipotle’s stringent commitment to meat from antibiotic-free animals raised in humane conditions can be seen as both a sacrifice for the self (healthier offerings for its customers) and the planet (encouraging sustainable farming practices). The company’s stock suffered when it took a stand that sacrificed sales. But when I spoke to Maxwell Luthy, director of trends and insights at TrendWatching, he told me he believes the enduring loyalty Chipotle engendered by its sacrifice outweighs the short-term cost.

Brand sacrifice initially hit me as a through-the-looking-glass moment in which everything is turned upside-down. However, digging more deeply, I found evidence that responsible company action may be one way of undoing what more than a century of growing consumerism has created — and business is benefitting in the process. Take Patagonia, for example. The company is several years into a “buy less” campaign that asks current customers to wear what they have until it is threadbare. The result: an increase in sales. CEO Yvon Chouinard told Inc. magazine, “I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money. Our customers know that — and they want to be part of that environmental commitment.” What is not clear is whether these are old customers feeling good about trading up, or new customers migrating from brands less willing to sacrifice.

Responsible company action may be one way of undoing what more than a century of growing consumerism has created.

Luthy told me that consumers are rewarding “human brands” that display honesty, transparency, and a willingness to admit when they are wrong. Brand sacrifice also reflects the idea that consumers are holding companies to stricter standards than they hold for themselves. He noted that many people think it’s a good idea to take fewer flights in general, but data reveals that air travel is up — few individuals seem willing to cut their own flying. When it comes to corporate behavior, however, Luthy says that “no hypocrisy is allowed, [and] the standards are getting higher.” The TrendWatching report cites an Accenture/Havas Media study that showed that 72 percent of respondents felt that “business is failing to take care of the planet and society as a whole.”

Companies may actually be in the best position to make such sacrifices; their strategies often require long-term vision and commitments. For example, the companies in the Roundtable on Sustainable Palm Oil understand that if they don’t help create an ecologically viable supply of this vital ingredient, their value chains will be riskier and less resilient. CVS’s strategic intent is to become a bigger player in health beyond selling over-the-counter and prescription drugs — and removing tobacco products aligns with that direction. When Coca-Cola ran a Super Bowl ad that featured “America the Beautiful” sung in eight languages by people of various ethnicities, the firm was making a values-based statement, according to Luthy. The sacrifice? “They alienated some core customers” in order to champion diversity, he said. One cannot doubt that the company is aware of demographic trends that make courting a wide range of ethnic groups essential to business success, despite the potential loss of some current consumers.

Consumers, on the other hand, are fickle. A recent story in the New York Times reported that people were ditching their hybrids for SUVs now that gas prices have taken a dive; it seems that environmental consciousness falls prey to short-term economics. That’s not surprising, as a fair number of the original purchases of hybrids were likely driven by high fuel prices, not concern for carbon levels in the atmosphere. We humans prize immediate gratification.

The lessons for executives in all of this: Forward-looking companies can take a leadership position that uses sacrifice to build enduring customer allegiance and perhaps even boost immediate sales. More important, it can help leaders clarify a company’s purpose, values, and performance. With all of those benefits, brand sacrifice might not be such a sacrifice after all.

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Can Brands Save the World?