SAN DIEGO ― Social responsibility drives a lot of consumer decisions these days.
Take TOMS Shoes, for instance. The company promises that for every pair of shoes a customer buys, the company will donate a pair to a needy child. “One for one” is the company’s mission.
So far, the TOMS philosophy has been paying off. Just months after the company was founded, TOMS had sold 10,000 pairs of shoes. By September 2010, it had sold a million. And as the company touts its accomplishments, it praises its customers for their role in giving back to others.
“The One for One movement is about people making everyday choices that improve the lives of children,” is the message on the company’s website. “Check out all the ways you can get involved.”
Here’s another example. In September 2011, Costa Mesa, Calif.-based Project 7 launched two products: Save the Earth Fresh Mint Gum and Feed the Hungry Peppermint Mints. For every tray of mints sold, seven meals are delivered in U.S. communities to a person or family in need. For each tube of gum sold, the company plants a fruit tree.
There’s been a lot of talk at the credit union conference here about attracting new customers. The key, speakers have said, is to formulate a message that resonates with consumers by appealing to causes that resonate with them. Essentially, consumers want to feel that their buying decisions are positively influencing the world around them.
I know that plenty of financial institutions participate in social causes. Wells Fargo Dealer Services teamed with Arbor Day Foundation to 25 plant trees for every customer who buys its EcoMind warranty product. Security National Automotive Acceptance Corp. employees participate in various “giving back” programs, such as Adopt-a-Family during the holidays, sending care packages to troops, blood drives, and sending school supplies to children in need. Canadian lender Rifco Inc. supports the Haitian Children’s Aid Society.
There are loads of other examples, I’m sure. But one of the recurring themes here was that financial institutions do a poor job touting these accomplishments. Banks and credit unions typically hinge their marketing on rates and terms, rather than the ancillary benefits consumers will gain by choosing them as providers.
But, some speakers posited, if you can tap into causes that resonate with your customers, you are no longer forced to offer the lowest rate or best price. In essence, consumers will choose that loan with a higher interest rate than the competition because they consider the premium the price for being socially responsible.
In a nutshell: Sometimes a subtle message has a greater impact than an obvious one.