I recently published a post on B-Corporations and the role they play in separating the socially responsible businesses from those that simply market themselves a such. “Cause Marketing” is a proven effective technique at creating a more loyal consumer base and earning a competitive advantage. Look at the (RED) Campaign and TOMS Shoes. With a (RED) Starbucks Card, you can help fight AIDS with every Mocca-Frappa-Latte you purchase! But to what degree is “Doing Good” setting a standard for Corporate Social Responsibility?
Here’s what Starbucks gives to the Global Fund through the (RED) program:
- 5 cents, every purchase on a (RED) Starbucks Card (through 12/31/09)
- $1, per $12 1lb bag of (RED) Coffee (8%)
- $1, per $16 (RED) Coffee Tumbler (6%)
- $1, per $20 (RED) Water Bottle (5%)
Of course with any philanthropic initiative there will be somebody saying, “but they could do more”. There’s always more to do. The question is, is there a point where cause-related marketing is “disingenuous”? Are firms, like Starbucks, using cause-related marketing to maximize their ROI while “giving” the bare minimum? If Starbucks were to register as a “B-Corporation”, would they meet the criteria?
A consumer looking to maximize their coffee-to-philanthropy ratio should probably look at Organic Coffee Cartel — a small social enterprise selling efficiently grown coffee purchased from small farmers in the developing world and giving 51% of profits to charity.
So here are some questions for discussions:
1.) How discretionary are consumers when it comes to cause/cause-related marketing?
2.) If consumers are utility maximizers, does social impact enter into their “utility function”; and if so, to what degree? Is it simply self-serving (eg. I feel good) or is it practical (eg. I maximized my investment)
3.) If the answer to the above two questions is YES, how can we generate broad-based consumer education on how to maximize their social impact?