“Changing The World” Is Growing Mandate For Companies And Brands

November 10, 2009

Many consumers want to make the world a better place and are willing to reward those companies and brands that help them do so with increased trust, loyalty and word-of-mouth. This is the key finding of a study we recently conducted with Noesis Research.

According to the report, titled “Brand Virtue as a Competitive Asset,” three out of four consumers report they are willing to pay more for brands they see as behaving responsibly. Of those willing to pay more, around 40 percent said they would pay as much as 10 percent more, and another 30 percent say they are willing to pay a premium higher than 10 percent.

The research also shows that consumers are willing to allow brands and companies more than one path to virtuous behavior: eight out of ten consumers report they do not differentiate between a brand’s being good for society in some way, such as producing healthy foods or using environmentally-friendly packaging, and brands that do good for society, such as supporting public service programs that address social issues.

It’s clear that many consumers seem to have a general concept of ‘modern virtue’ in mind when they evaluate brands and companies. It’s also obvious that what constitutes ‘socially responsible’ behavior is evolving in the consumer mind beyond the traditional definition of corporate social responsibility. Today’s consumers increasingly expect brands and companies to help change the world, even if only in small ways.

A copy of the research report is available here.

Grocery Shoppers Emphasizing Food Safety Claims

October 21, 2009

Concern about the safety of the food supply is rising, according to a national survey we recently conducted. The research found that shoppers are willing to pay more for food they believe is safer or healthier. It also points out that assurances about what a food does not contain, such as pesticides or antibiotics, matter a great deal to, as do ethical claims that reinforce perceptions about quality and safety.

The research found that 57 percent of respondents reported they were “definitely” or “very concerned” about the safety of the U.S. food supply, and another 39 percent said they are “slightly” or “somewhat” concerned.” Just four percent said they had no concerns about food safety.

When asked to evaluate a range of food quality claims commonly found on food packaging or at point-of-sale, consumers reported that the claims they found most meaningful have to do with the things they do not want to see in the their food such as pesticides, antibiotics, mercury and artificial hormones. Claims such as “organic,” “free-range” and “grass fed” were considered less important by survey respondents. The research did not include nutritional claims.

While respondents confirm that low price influences most food purchases, 60 percent said they would pay as much as 10 percent more for food they believe to be healthier, safer or produced to higher ethical standards, and 14 percent reported they would pay a premium greater than 10 percent.

These findings are among the highlights of a new research report, “Beyond Organic – How Evolving Consumer Concerns Influence Food Purchases.” It reports on research recently conducted among consumers who fit the demographics for specialty grocery shoppers. A copy of the complete report is available at our web site.

Americans Expect Business To Do More To Solve Social Problems

 October 15, 2009

Most Americans believe that business is not doing enough to help address the nation’s social issues, although many Americans believe business is primarily responsible for addressing only certain issues.

We recently conducted a national survey that explored many of the social issues currently in the headlines. In general, 59 percent of Americans believe companies do not do enough to solve social problems. That compares with 11 percent who believe companies do enough and 22 percent who believe it is not the responsibility of business to help solve social problems. (Eight percent had no opinion.)

The survey identified 28 social issues currently in the news, ranging from the environment, healthcare and unemployment to identity theft and texting while driving, and asked respondents to identify the issues that most concern them, and if they think business has “primary,” “partial” or “no responsibility” for helping society address each issue.

The top 10 issues that respondents identified as a “primary responsibility” for business to address include offshoring of US jobs (63%), pay inequality (63%), sweatshop labor (60%), unemployment (46%), safety of imported food and products (45%), safety of U.S. food supply (42%), recycling and waste management (35%), protecting the environment (35%), healthcare access and affordability (31%), and privacy and identity theft (31%).

More highlights from this survey are available here.

Driver Cell Phone Use And Texting A Top Social Issue

October 1, 2009

The issue of distracted driving has really captured the attention of Americans today.

Many report they are as deeply concerned about cell phone use and texting while driving as they are about illegal immigration and offshoring of jobs. That is a finding of research we recently completed and released today to the media.

According to the research, 88 percent of Americans surveyed reported they are generally “concerned” about cell phone use and texting while driving, and 33 percent said they are “very concerned” about the issue, placing the issue among the top 10 concerns cited by survey respondents.

According to study findings, the top 10 issues about which Americans say they are “very concerned” include: saving for retirement and healthcare access and affordability (both 46%), excessive government spending and debt (45%), the unemployment rate (40%), drunk driving (38%), privacy concerns and identity theft (37%), dependence on foreign oil (34%), quality of public education and cell phone use and texting while driving (both 33%), illegal immigration (31%), offshoring of U.S. jobs (30%) and safety of the food supply (29%).

Not surprisingly, concern about this issue varies considerably by age. Fifty percent of the adults in the 50 to 64 age group said they were ‘very concerned’ compared with 18 percent in the 20 to 29 age group and 31 percent of those 30 to 49.

More On The New Normal

July 22, 2009

Back in April, the idea of a “new normal” was still fairly new. At the time, some considered the term an overreaction to the unexpected and sudden changes in consumer behavior we saw in the wake of the economic downturn. Many believed that things would sort themselves out eventually and we would return to pre-downturn days.

That may still prove to be true, but the idea of a “new normal” seems to be sticking around.

Gallup has just released a new poll that has a third of Americans reporting that their reduced spending habits will continue in the years ahead – exactly the same number of Americans (32%) who reported they expect a long-term reduction in spending back in April.

An interesting finding is that the approximately one-third figure holds true across all consumer segments, including those making less than $20,000 a year and those making more than $75,000 a year.

In addition, around a quarter say increased personal savings is part of the “new normal,” about the same as believed so back in April.

There is a temptation to speculate that this new discipline will go out the window after a couple of good quarters, but I don’t think so. This downturn is more than just a cyclical adjustment in consumer expectations, as most recessions are. I believe we will eventually understand that it is, in part, also a reaction to the consumption excesses of the previous decade when the American consumer went on an unprecedented spending binge.

I suspect that once the dust settles, perhaps within the next six months, we will realize we have experienced a fundamental restructuring of the economy, and one with lasting effect. The other factor I believe at work here, and one of at least equal impact, is a subtle but definite shift among consumers to place more value on personal responsibility than they have in decades.

The Chickens Come Home To Roost

July 12, 2009

If you are one of the 100,000 subscribers to Backyard Poultry magazine or among those logging on to BackyardChickens.com, it’s no news to you that raising chickens  behind the house is a growing trend.

Maybe you are one of the 43 million U.S. households growing their own fruit and vegetables this summer. Or perhaps you lack a backyard of your own but have joined a community garden group to work with neighbors in creating public access gardens.

Urban and suburban micro-farming is a hot trend this year due, at least in part, to the economy. Some observers even point to growing concerns about the safety of the food supply as a factor since keeping a close eye on what we plan to eat can be reassuring. But I think there’s another concern at play here.

I have a theory that our growing dependence on technology is making us feel insulated from real life. While technology has opened up the world as never before, and created unprecedented connections with one another, it also keeps us at arm’s length from nature.

Our lives are busy and require we spend a great deal of time in front of screens of one sort or another – up to 8 hours daily for many adults, according to one recent study. A fast food egg-muffin breakfast is a poor substitute for just-laid eggs.

We are hungry to experience the world on its own terms, even if that means through the quirky charm of poultry and zucchini plants.

Carving Up California

July 7, 2009

Since few Californians trust our elected officials to do the jobs we hired them for – perhaps because they do not generate much confidence when they get together, as the current budget crisis demonstrates – we feel compelled to become involved in making the legislative sausage, so to speak. We call it the initiative process.

This is not a recent phenomenon. California has gone to the polls on more than 300 initiatives since 1912, voting on just about every imaginable topic, from the death penalty to the sale of horsemeat. About a third of these became law.

These were just the tip of the iceberg. Special interests also floated hundreds of proposed initiatives during this time that never made it to the ballot.

This unrestrained initiative process is one factor driving the growing movement to hold a Constitutional Convention which would address some of the more problematic aspects of the state constitution.

The proposed convention has so far overshadowed another movement – the latest effort to divide the state. This follows at least two dozen previous attempts to carve the California into two or more states. This initiative is different mainly in that it calls for an east-west split rather than the north-south separation most often proposed in the past.

However you cut it, it’s a bad idea. California is one of those places that prove the contention that the whole can be greater than the sum of its parts.

What makes the state unique, and undeniably interesting not just to America, but the world, is that it encompasses such diversity – its people, economic clusters, entertainment industry, number of highly educated young adults, role as an entrepreneurial hotbed and its affluent consumer culture, to name several. That these and many other forces share the same real estate accounts, in no small way, for California being what it is. Divide the state you might still have all of the parts in the same places, but it would not be the same.

California again hovers on the edge in part because of its excesses, immaturity and inner demons, but also because it has condensed into one region its own special brand of imagination, creativity and raw energy.

In 1991, Time Magazine had a special issue on California with a cover that called it “The Endangered Deam.” Today it remains that – both endangered and a dream – and it still goes a long way in explaining California’s enduring appeal.

Signs Of A Shift In Consumer Culture

July 2, 2009

Two out of three American consumers think advertising agencies and various media, such as print, television and web sites, bear some responsibility for the economic downturn because they encouraged people to buy things they could not afford. A large segment – a third of those surveyed – go so far as to say marketers and media bear a great deal of responsibility.

Such are the findings of a recent Harris poll of more than 2,000 consumers reported in Brandweek.

Interestingly, family and friends also came in for some finger-pointing, with 10 percent of those surveyed saying they blame others for encouraging them to overspend.

This is a provocative finding, and not just for the obvious reasons having to do with personal responsibility, or lack of it in the case of many. What’s notable is the idea that people believe they can’t afford everything they desire. What we may be seeing here is the beginning of a shift in the fundamental dynamics of consumer culture.

Consumer culture has for decades been fueled by entitlement – purchases made based on what consumers believe they deserve, not just what they can afford. The idea has been prominent in the past decade when easy credit artificially inflated aspirations. Want a new car or a bigger house? Well, you deserve it.

This attitude is probably more entrenched among older Baby Boomers who have enjoyed smooth sledding, economically speaking, through much of their life. (The survey, in fact, points out that those 55-plus were somewhat more likely to blame the advertising business than their younger counterparts.)

Setting aside the question of blame, there’s a notable undercurrent of realism here. It indicates Americans may be coming to grips with the idea that feeling entitled to something is not sufficient rationale for purchasing it.

If this proves to be the case, we really will see a New Normal in the years ahead as it pertains to consumer purchases.

More On Consumer Trust And Confidence

June 29, 2009

In the previous post we reviewed the results of an annual Gallup poll that illustrates how America’s trust in its institutions continues to slip over time.

It raises the obvious question, who do we trust?

Mostly each other, it turns out. While Americans may not believe in their institutions as before, they seem to have a high degree of confidence in each other.

There’s been a great deal of research in recent years that illustrates the growing influence of word-of-mouth on consumer decision-making. A recent AARP study, for example, found that the majority of Americans turn to family and friends rather than financial advisors for financial advice during a personal crisis.

A 2006 Pew report addressed the question, What is the Internet doing to the relationships and social capital that Americans have with friends, relatives, neighbors and workmates? It found that 29 percent of American adults report Internet connections have played an important role in helping them deal with at least one major life decision in the past two years. If the study were repeated today, no doubt the total would be even higher.

I suspect that the reason we do not trust our institutions as much as previously is not only that they occasionally have acted in ways that undermine our trust, but also because they are simply less relevant to how we live our daily lives.

One of the strengths of word-of-mouth is its adaptability. We live in a rapidly changing culture of information, one that can seem chaotic at times. Institutions, by their nature, are ponderous in thinking and behavior. We often don’t have time to wait for them to respond even if we wish to do so.

The counsel of family and friends, and even smart strangers, provides constantly refreshed reference points in a way that helps us to quickly organize our thinking and behavior as we adapt to this changing environment.

The value of word-of-mouth, whether in face-to-face or in digital forms, is that it helps us address our immediate needs and concerns in a way that is personal, relevant and timely. Few institutions can even hope to do that.

Who Do We Trust?

June 25, 2009

We hear calls for greater transparency today – in business, finance, government, healthcare. I don’t think transparency is what most people really want, however. Rather, what they want is to be able to trust the institutions and organizations that affect their lives and they think the way to restore trust is to increase accountability.

One lesson we have re-learned in recent months is how critical trust is the functioning of our society and how easily it can be lost. Trust is the real American currency.

We assume social contracts with our institutions such as banks, government,  the military and police, and the news media, among others; we expect that they will look out for our interests.

When they let us down, we tell ourselves we should have known better, but actually, we don’t believe it. Americans are not, as much as they would like others to believe, a cynical people. Ours is a society hard-wired for trust. That is a product of our heritage and our fundamental optimism – that tomorrow will always be better than today, and that this will benefit most, if not all of us.

This is borne out in a poll Gallup has conducted annually for several decades that measures the confidence that Americans have in their institutions. The latest poll was reported this week

What is perhaps surprising is that confidence in most institutions has increased  somewhat in the past year; perhaps because Americans, deeply shaken by financial events, need something to believe in.

Out of 16 categories, just four saw a drop in public confidence: TV news, banks, organized labor and big business. Institutions that either inspired greater confidence this year or remained about the same as last year are the military, small business, the police, the presidency, U.S. Supreme Court, organized religion, newspapers, public schools, medical system, criminal justice system,  HMOs and Congress.

This is not as encouraging as it sounds, however. The long-term trend is not good; many of these institutions inspire far less confidence than they did even five or 10 years ago. And of the institutions on the list, just five – the military, small business, the police, organized religion and the presidency – inspired confidence among half or more of the people surveyed this year. 

If Americans are less trusting of their institutions than ever before, who then do they trust? That’s a topic will consider in the next post.