In 1965, Ralph Nader published “Unsafe at Any Speed” and influenced a movement now known as ethical consumerism. Based on the concept of “voting with your wallet,” ethical consumers either purchase ethical products and services or boycott those deemed unethical.
The ethical consumer movement has challenged marketers ever since, under the basic assumption that brands are selling for maximum profit, not for the greater good. So how can brands best approach this significant and growing consumer base that has the power to grow (or shrink) revenue?
I originally wrote about ethical consumerism in 2014, and while the fundamental marketing strategies haven’t changed significantly, perceptions of ethical consumerism have evolved. The Ethical Consumer Research Association provides resources and insights into the movement from a consumer advocacy perspective, but I’d be remiss if I didn’t reference a recent Atmos article, The Twilight of the Ethical Consumer, which shed light into the complexities of the ethical consumer movement. Regardless of where you personally land on the spectrum of ethical consumerism, marketers can’t ignore the meaningful buyer segment. To address the opportunity, I’ve outlined six essential strategies to engage ethical shoppers.
1. Understand what matters to your customer and embrace it
Companies must identify which ethical issues are important to their consumers and ensure they are satisfied with the company’s stance on those matters. According to a recent study, 92% of respondents had a more positive image of a company that supported something they cared about, while 15% stated they would be more likely to pay more for a product or service associated with a cause important to them.
Conversely, consumers would still buy products from unethical firms, but only at a lower price.
Get feedback from your consumers, as they may have great ideas on how you can more effectively appeal to ethical consumers with your business and marketing practices. Take the input with a grain of salt, considering the disparity between purchase intent and actual behavior can be significant. When possible, take a local angle on your product or service, as that can be a significant influencer in the decision-making process, especially during the pandemic.
2. Align with culture
Research does not support an ROI on ethical marketing, as unethical companies are still getting rewarded and ethical companies are seemingly penalized by consumers. Corporations should be philanthropic and altruistic because it is part of their culture. Do not expect an ethical consumer initiative to directly drive sales, especially if your corporate values do not align with the ethical consumer. Brands like Levi Strauss and Johnson & Johnson appeal to the ethical consumer because their culture drives that type of behavior in their business. Consumers are likely to be especially brand loyal if their deeply held values are engaged in their purchasing.
Other stakeholders should be considered as well, including employees, media, the local community and government. One effective marketing strategy is to partner with platforms like Trestle, which focuses on aligning consumer and corporate values.
3. Educate your customers
Leverage consumer interest in issues that impact them by educating them about your position and supporting initiatives. Tell them how their purchase will make a difference, as consumers generally do not believe they can make a difference.
It also is important to educate customers on your industry and your position in the marketplace. Consumers appear to take a macro view of ethics in business. They rarely have specific knowledge regarding individual companies, which implies the need for brands to differentiate themselves, particularly in challenging industries like energy, telecommunications, apparel and food. If you are in one of those industries, you need to be more proactive with your marketing and positioning.
4. Consumers love cats
Consumers are much more sympathetic to animal rights (exploitation of animals specifically) than those of humans, which may translate into a premium pricing model for some products that are animal exploitation-free. If your product is exploitation-free, make sure consumers are aware. If your organization is actively against animal exploitation, leverage that opportunity in your communications. If your product is not related to animals, then acquiring relevant industry certifications and/or awards can be particularly valuable (e.g., free-trade coffee or conflict-free diamonds). For consumers interested in human rights, address your commitment to livable wages, which have been put fashion and retail brands like Walmart, in the spotlight.
5. It’s all in the packaging
Consumers are generally passive ethical shoppers vs. active ethicists. Consumers rely primarily on product labeling, so package design and copy are critical. Consumers will be more likely to purchase ethically if there is no additional cost, loss of quality or necessity to “shop around.” Don’t forget the small print: While most general consumers do not read the fine print, ethical consumers are much more likely to do so. Include essential facts, industry certifications, and initiatives in your packaging and marketing materials to give them the nudge.
6. Utilize PR to tell your story
A brand’s ethical or unethical activities do not seem to have a direct impact on purchase decisions, with the rare exception of significant amounts of negative media coverage, so long as its products are valued. This implies that brands need to get ethically oriented information out to the public via third-party public relations efforts, as well as proactively managing any negative information. Online reputation management (ORM) has exploded as a service for high-profile brands because of this trend. Before you go out to the press, however, be sure to clean up your act, as scrutiny from the media can work against you. Revisit vendors, ingredients, processes and logistics to identify areas where you can be more sustainable and socially responsible without creating economic hardship.
There is no debate that the ethical consumer market provides a real opportunity for brand marketers. To succeed, however, marketers must create context to engage the ethical consumer. Then you will be able to both make a difference to the greater community and find a sweet spot in the competitive landscape that will empower growth of revenue and profitability. Don’t be the next Corvair; be the next Prius.