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Social responsibility is largely misunderstood and therefore typically mismanaged by brand marketers. Social responsibility is not something that brand marketers should do on behalf of a brand or market as a selling point for a brand. Social responsibility is a product in its own right, and as such puts to rest the central claim against it famously articulated by Nobel Prize-winning economist Milton Friedman.
In a controversial, oft-cited essay published in the September 3, 1970 issue of The New York Times Magazine, Friedman argued that in a “free-enterprise, private-property system,” corporate managers are responsible to the shareholders who are the owners of the businesses that employ them, and the interests of these owners “generally will be to make as much money as possible while conforming to the basic rules of the society.” Hence the title of Friedman’s essay, a declaration that has been both celebrated and decried in the intervening decades: “The Social Responsibility of Business is to Increase its Profits.” That is to say, the responsibility of business is not to do good but to make money.
Nowadays, consumers (or most of them at least) couldn’t disagree more. Consumers have come to expect a lot more from companies than a just a good product or service. Indeed, this is even a source of leverage and power for many consumers, with 63 percent in The Futures Company 2012 U.S. MONITOR survey agreeing with the statement, “By choosing to do business with companies that are more socially responsible, I can make a difference in this world.”
Companies that limit their responsibilities to their own profitability, and to the satisfaction of customers with their products and services, find themselves at crosscurrents with the direction and demands of today’s marketplace. Simply put, consumers want companies to produce and deliver more than just a good consumer product. They want companies to produce and deliver a good social product, too.
The nuance here is fundamental. Consumers don’t just want a product that is affiliated in some way with social good. They want companies to deliver a product of social good in addition to a good consumer product. A company has to be in both businesses – the business of consumer goods and the business of social goods.
The confusing thing here, of course, is that consumers don’t, and in fact usually don’t want to, pay for a social good, nor, for the most part, can they do so even if they wanted to. So it’s hard for brand marketers to recognize it as a product in its own right. If it’s not something that consumers can buy, own, rent or use, then how can it be a product?
The answer harkens back to Friedman’s declaration, which is about what companies do, or to put it another way, about what products companies produce and deliver. Products are what companies do. If companies must now do more, then that means more products. Not old products in new ways, which is nothing but companies doing the same old thing with a new spin. Instead, it’s more products to satisfy new types of consumer demands and needs.
What companies do used to be a consumer good alone. But these days, consumers are demanding that companies do social good, too, and as something companies do, it is a product, even though it is not for sale in the consumer marketplace.
The importance of making this distinction is to emphasize that social responsibility is not merely a consumer product characteristic or attribute. Consumers are focused on social responsibility for its own sake not in terms of what it means for the appeal or value of a brand. Social responsibility is not subordinate to nor assessed relative to the dimensions and considerations that make up a consumer product. It must be managed independently.
Social responsibility is also much more important to the company as a whole than any particular consumer product characteristic or attribute. Poor gas mileage may hurt a car company’s sales, but it won’t bring the company’s reputation into disrepute. Poor cleaning power may hurt a laundry detergent’s sales, but it won’t cast doubt on the company’s commitment to the basic rules, ethics and customs of the community at large. Especially in the contemporary charged social environment, consumers look to social responsibility for clues they don’t expect to find from a consumer good.
This matters even more when companies find themselves unexpectedly caught up in a whirlwind of social controversy, such as Nike and third-world labor or Bain Capital and outsourcing or Apple and sustainability or Chick Fil-A and gay marriage. Management has to scramble (thereby taking its eye off the bottom-line ball) when the company lacks a solid record of producing and delivering social responsibility. Indeed, with social responsibility ever higher on consumer priority lists, these kinds of risks can no longer be disregarded or taken lightly. Crisis contingency plans built for product tampering or employee misconduct or management criminality must now include rows over social issues as well.
More and more of what consumers expect of companies, and of brand marketers, goes beyond the traditional single responsibility of producing and delivering a consumer good. Consumers now come to the marketplace with a broader sense of a company’s responsibilities.
Consumers are no longer satisfied with companies that define their purpose narrowly. The purpose expected of a business is not just to produce and deliver a consumer good. Consumers expect corporate purpose to include social responsibility, along with other increasingly important things like social relationships, social causes and social well-being. Companies and brand marketers can no longer get away with keeping their heads down to focus just on a consumer product. Social responsibility is a product, too, and must be managed and marketed in that way.
Contributed to Branding Strategy Insider by: J. Walker Smith, Executive Chairman, The Futures Company
Sponsored By: The Brand Positioning Workshop
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