Editors Note: This is a guest post by Simon Mainwaring. Simon is the founder of We First, a social branding consultancy that helps companies, non-profits and consumer groups build a better world through changes to the practice of capitalism, branding, and consumerism using social technology. More information about contributory consumption is available in We First: How Brands and Consumers Use Social Media to Build a Better World (Palgrave/Macmillan, June 2011) Visit www.wefirstbook.com to learn more.
Cause marketing (CM) is perhaps the most successful form of corporate social responsibility. Corporations have adopted it widely comfortable that it allows them to support a worthy cause while enhancing their public reputation and building loyalty among their customers. Cause promotions often increase sales and add revenue to the bottom line.
We also know that consumers value cause-marketing promotions. The notable Cone Cause Evolution Study has consistently shown over years of its surveys that consumer support is rising when companies support causes through their product sales.
Yet while we know that CM works, so many isolated, fragmented cause promotions are simply not enough to meet the scale of needs in our world. We need larger, more extensive, and more consistent efforts to raise the capital required. We need many more corporations to participate in a focused and concerted attempt to transform ordinary consumerism into a permanent motor of social advancement. We need the entire private sector to begin partnering to build the better world we all want.
Transforming Capitalism Into an Engine of Change
In 2008 Bill Gates gave a speech to the world’s top business people, economists, and social thinkers at Davos. In that address, Gates challenged corporations to be more creative about how they might fulfill the needs of the world’s poor. He suggested that corporations could find new ways to account for their profits, such as amortizing their costs across a wider spectrum of products, lowering their license fees and profit margins in poorer countries, and adding the value of their reputational enhancement into their profit accounting.
As a branding consultant I wondered if social technology could help capitalism become more “creative.” Slowly a new strategy emerged. Why not make every single consumer transaction use a small portion of its price as a donation to a cause? For the most part, companies and their brands would absorb the cost of this donation, but in doing so, they would gain the respect and loyalty of a growing audience of consumers who increasingly demand that businesses demonstrate a higher degree of social responsibility. It would be a win-win-win solution for consumers, brands, and the world.
I call this concept “Contributory consumption,” referring to the fact that the driving force of this solution would transform every act of consumption into a contribution to help a cause. Collectively, these transactional contributions could add up to billions of dollars each and every year, thereby greatly scaling up our ability to assist governments and philanthropies that are responsible for tackling our global crises.
Contributory consumption would effectively transform the entire private sector — every mall, supermarket, online store, and even virtual gaming sites — from a monument of consumer self-interest into a motor of positive global change. One way to think of it is that contributory consumption is the next evolution of cause marketing. Rather than only some companies occasionally sponsoring cause promotions or teaming up with a non-profit to accomplish its mission, it aims for every business entity in the U.S., if not the world to participate in using its business operations and products to make a difference in the world. Even if only a small percentage of the private sector participates, the contributions generated will dwarf the current total of corporate foundation donations in a manner that is also sustainable. And since consumers readily celebrate companies that are willing to devote a portion of each product sale to a cause, let’s engage their enthusiasm to turn consumerism into a major source of cause funding.
Contributory consumption could be implemented in every way, shape, manner, and form. It could occur in all retail stores, in all forms of online shopping, and in the many coupon/Groupon daily deals. It could even occur in the virtual world of gaming, where gamers spend billions each year buying virtual goods used to play their games.
In short, we should tap into the very essence of capitalism, the profit motive, and use it as a source of wealth and prosperity, but also as a perpetual resource to fund the hard work needed to solve humanity’s worst problems.
What do you think of the idea of Contributory Consumption? What challenges would accompany such a model? What is the potential upside?
Interested in hearing more from Simon Mainwaring? Join us for the July Cause Marketing Masters Series Teleconference, Why The Best Hope for Business is the Business of Hope.
This is an interesting proposal and it is certainly appealing to think about the volume of dollars that could be raised if every purchase triggered a donation.
Yet marketers wishing to use transactional cause marketing to build loyalty are already struggling given the clutter for these types of promotions when directed at a mass consumer. Without the opportunity to differentiate, especially in a situation where “everybody’s doing it,” I fear it could become a sort of CSR tax for participating companies. Could they still use this activity to build business and brand loyalty if their competitors are doing the same thing?
I would like to see corporations continue to make moves toward using their core skills in business-driven ways–at points all along their unique routes to market–to solve social problems and raise funds.
Thanks Diane for your comment. I agree there could be a challenge with every brand out there making some contribution. My hope is that this will happen! But within that context, no two brands are alike and if they define themselves specifically they should be able to stand out by their strategy and use of technology. And if not, they certainly can by their transparency and authenticity. so I think authentic engagement and commitment to causes in line with a brands values are key differentiators. thanks for the feedback. simon
Simon, this is a thoughtful and well written post.
If you look into our company at all, you will understand why I more than most believe that you are correct in your vision (we built our company and embeddable microdonation software platform to power this very vision). And I have to disagree with Diane above though I appreciate her perspective. Most of the reason that companies struggle with transactional cause marketing has little to with clutter and more to do with execution. While doing what you describe – at least the way we envision it – will be differentiable in the short run, even in the longer term where a utility like ours is common place, companies will always be capable of differentiating on the nature of the programs/promotions they execute, the manner they engage their constituents, the measurement of their impacts, etc.
The idea of ‘consuming for good’ you describe makes perfect sense in a world where there is a heightened expectation on the part of consumers that the retailers they patronize and companies they work for do more than pay lip-service to their need to have meaning and give back (despite often lacking the means to do so completely on their own). Go where the people and the transactions are already aggregated and provide people a convenient, empowered, private way to give to charities of their choice, with corporations offering matching or other incentives to choose causes that are strategically aligned. That’s a much more powerful cocktail than relying on government and high net worth individuals to solve our social challenges. I envision a day in the not-too-distant future when giving to the cause of your choice will be as convenient and prevalent as leaving a tip at a restaurant.
This is what our platform powers and this is the type of world that I want my kids to grow up in.
Thanks again,
Bryan
Bryan,
A wonderful reply and I totally agree. Obviously this requires a change of heart and habit from many people, but sadly I believe it will be driven of necessity as we start to genuinely engage with the scale of social crises we face. I think the tip analogy is spot on and I congratulate you on your platform. It sounds amazing. And like you, that’s a world a would be happy to leave my kids. Thanks for the thoughtful reply Bryan. Simon
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