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Consumers

Comment: consumers: inventive incentives

July 01 2004

by Briefing team
Consumer capitalism succeeds by giving people what they want. So why do so many say they want responsible products, but rarely buy them? The absence of any tangible incentives could be the answer.

In fairer times, Walt Disney's former chief executive Michael Eisner was reputed to have described his approach to marketing in the following terms: "we ask our customers what they want, and then we give it to them".

Sounds simple enough. So is the response that CSR get advocates when they try and get ethical products onto the supermarket shelves. Sceptical marketing directors say that customers aren't asking for it. They'll repeat the new 30:3 mantra or statistics to that effect (i.e. 30 percent of people say responsibility concerns inform their shopping, but only three percent show this to be true at the till). What you're left with is the odd ethical product that may as well have the words "token" printed on the label.

So where does CSR and the consumer go from here? Of course, there's always the Co-operative Bank - a ray of sunshine among the sceptical masses. Generating a one third increase in profits (£40m) is not to be sniffed at, even if it did come at the cost of turning down £6.9m of potential business. But the Co-op group is the exception among the norm. It gets the three customers in thirty that are genuinely asking for responsible products. The same is true for fairtrade. It's selling to the converted in a niche approach.

So the question must be how to convert the consumer. There's the 'pre-emptive' approach that sees companies acting as the de facto decision-makers for consumers by changing production processes for the better. Companies can either choose to do so (as with Sainsbury's GM-free milk or Dixons' recycled carrier bags) or be forced to do so (as with CFCs in fridges and whatever else is lurking on the statute book). While production techniques or legislation can impact the totality of a market (think asbestos-free buildings), in most cases, markets will continue to provide alternatively produced goods and services. So, it's back to the customer making the ask again.

Education and awareness raising can achieve this among some, but few react well to being lectured about what's good for them. Wanting to do what's good for them has to be the answer. That's why NEF's proposal of a rewards scheme is potentially such a good one. Incentivising customers to choose responsibly by acknowledging their purchasing behaviour with short-term benefits could be just the ticket (or tradeable points system) to motivate consumer demand. Time Bank has shown rewards do work for civic involvement; isn't it time that incentives made it into our shopping trolleys too?