This post first appeared on Katya Andresen’s site, www.nonprofitmarketingblog.com.
When a company contributes to your cause, how does it affect how people feel about the company? If you’re a nonprofit, it’s important to be able to answer this question. Why? Because most companies have twin agendas when they support a cause: doing good and doing well. The longest-standing partnerships are those that not only provide value to the nonprofit but also to the company’s philanthropic AND business agendas. If you want to engage corporate partners, it’s important to understand both.
First, let me share the basics that are well known in research. CSR can create a brand halo for a company. It makes consumers more likely to view the company as likeable and trustworthy. It might inspire brand loyalty. And if price and quality are considered comparable, a consumer might be more likely to choose a socially responsible company’s product over the competition. All good reasons for a company to support your cause.
But how does a company’s social responsibility affect how consumers actually view its products? Do consumers think the products are better if the company is invested in good causes? This has been a question with frustratingly few answers over the years. Some past research has suggested that the more active a company is in social responsibility, the more consumers might question product performance. For example: is that chemical-free counter cleaner from that tree-hugging corporation really going to work? Consumers may think not.
So it’s exciting that a new set of studies from Alexander Chernev and Sean Blair of the Kellogg School of Management at Northwestern University tackle the specific issue of how CSR influences the way products are perceived. Their paper, “Doing Well by Doing Good: The Benevolent Halo of Social Goodwill” describes several studies that led to four conclusions by the researchers.
1) To consumers, good company = good product
The first big finding is that when consumers think a company is socially responsible, they are more inclined to view the product as better than others. The study described in the Chernev and Blair paper describes a winery that donated a portion of proceeds to charity. People who knew this act of good perceived the wine as superior. So CSR can enhance perceived product performance! But read on–it’s critical that it is the COMPANY, not necessarily the product, that be viewed as socially “good.”
2) Consumer mindset dictates when “good” matters
In research with a hypothetical running shoe, consumers were more likely to feel the product was better because of the company’s CSR if they were in an abstract rather than concrete mindset. The researchers got consumers to think abstractly by asking why they exercised. They got a separate group of people to think concretely by focusing them on how they exercise. When people were focused on the “why,” they were more influenced by the social good of the company. This finding is in line with fundraising research, which shows people are more generous when in an emotional mindset.
3) A socially responsible company trumps socially responsible product
Here’s the most surprising finding: a socially responsible company may drive more business than a socially responsible product. People feel better about a product that is created by a company that donates to green causes than a company that created a product with environmentally friendly technology. The researchers tested sunscreen, bug spray, laundry detergent and air conditioner refrigerant that had attributes such as being chemical-free and tested that against a company that made one of those products and donated 10%of sales to charity. What was interesting was consumers tended to favor the latter–maybe because they worried “social good” meant a less effective product. When “social good” was decoupled from the product and assigned to the company as a whole, people felt the best about the product. They believed it meant higher performance.
4) Consumers smell self-interest a mile away
People like companies that do social good, but that warm feeling can be attenuated when they sense crass corporate self-interest behind those good works. For me, this finding echoes the truth equation from Charles Green, which says trust is the sum of credibility, reliability and security DIVIDED by the self-orientation of the company (or person). Self-orientation is self-interest and refers to how much an organization is perceived as focusing on itself vs. others. The more a company seems focused on its own needs, the bigger the denominator in the trust equation and the lower the level of trust. This seems to hold true in CSR too. A study with a pretend company named eco-Inks showed that its self-interested advertising about the product’s petroleum-free attribute was far less effective than putting that messaging in its CSR outreach–or having a nonprofit speak to the merits of the company.
Katya Andresen’s site: www.nonprofitmarketingblog.com.