There’s no question about it: Consumers like companies that have built their reputations not only on the quality of their products, but on their propensity for doing good. The 2015 Nielson Global Report found an increasing number of people are willing to pay more for products and services that come from companies who are committed to positive social and environmental impact, up from 50% in 2013 to 66% in 2015. Many brands have reacted to this insight in kind, developing products that tap into a consumer’s desire to give back – building the societal reward of philanthropy into the retail price.
Brands who go the philanthropic route need to be careful, however: Consumers are very savvy, and so are corporate critics. They are only too quick to call out companies that seem more concerned about their bottom lines than about truly doing good. To avoid the kind of backlash that can actually hurt a brand that has staked its reputation on doing good, brands need to make sure their marketing is “unique, authentic, talkable, and iconic,” as Adam Kleinberg argues in AdAge.
TOMS is a perfect example of how a purpose-driven brand can evolve to fit the increasingly demanding requirements of consumers and observers alike. Since its launch in 2006, the company has donated more than 50 million pairs of shoes, and its valuation has ballooned to some $625 million. The business model, often referred to as “buy one, give one” or “one for one,” is an innovative and arguably original approach that builds philanthropy directly into a business model and product. It’s at least part of the source of TOMS’ considerable cachet.
Yet some critics have argued that the TOMS model is simply a Band-Aid, not a solution, to the systemic issues contributing to global poverty, and moreover, that the company’s charitable efforts help their bottom line more than it helps the poor.
“The truth is that while that kind of [buy one, give one] messaging is evidently a great way to sell trendy shoes, or to otherwise raise money, it’s not a very good way to do charity,” writes Amanda Taub of Vox.
TOMS founder Blake Mycoskie had exactly the right response when he acknowledged the company’s detractors head on. “If you’re building a brand you have to listen to the critics, and we have,” Mycoskie told Entrepreur. “‘Aid is not enough’… is a very fair one, because if you build a company to the size of TOMS that’s able to do real good and create jobs then why not do it?”
Indeed, Mycoskie has expanded the TOMS products and causes – purchasing a cup of TOMS coffee supports clean water projects, eyeglass purchases support eyeglass donations and fund eye surgeries, and tote bag purchases support safe birth initiatives. TOMS funds also get funneled back into the business world to support a social entrepreneurship fund The company still donates shoes, but it’s upped the game there, too. The footwear is now climate-appropriate and produced in the same countries that receive shoe donations to create local jobs. The overarching initiative, called “Beyond One for One,” is an effort to continue to innovate within the giving model.
The secret to the success of the TOMS model isn’t really the “one for one” model it pioneered – it’s the true commitment to being a responsible corporation and doing what’s right. Companies and people often show exactly what they’re made of when the hits start coming. A brand that stays true to its identity and expands its commitment instead of shouting down critics is a brand that lives its ideals. That, in the long run, is why people will keep buying.
Consumers show little sign of philanthropic fatigue, and that means conscious consumerism is here to stay. To stand out in an increasingly crowded market, however, cause marketers must grow, pivot, and reinvent the giving model to fit conscious shoppers’ needs. The bar to social responsibility will only keep rising from here.
SIDEBAR:
Here are two other companies that are upping their commitment to philanthropy.
Amazon has incorporated philanthropy directly into its core business with the launch of AmazonSmile. The program allows shoppers to give back while they shop by donating 0.5 percent of the purchase price to charitable causes, transforming a regular shopping moment to an instance of conscious consumerism – a sort of “clicktivism” that also positions Amazon as a charitable community supporter.
A heavy hitter in cause marketing, PRODUCT (RED), attracts customers across demographics by collaborating with various brands like Gap’s INC(RED)IBLE shirts, to make (RED) themed merchandise. The consumer response has been positive, raising $350 million over the past 10 years to eliminate the spread of AIDS. Customers flock to the recognizable products that allow the wearer to instantly communicate the charitable intention of the product, without sacrificing the fashion or utility behind the initial design.