by Perry Yeatman – Sept 16 2014
This article was originally published on The Huffington Post.
As a CMO myself, I’m experiencing firsthand the profound changes in the marketplace and in how we provide value for clients, consumers or customers. Amidst these changes, one of the developments my colleague, Leeatt Rothschild, and I are most excited about is the growing importance of social value drivers for consumers.
Yes, the increasing difficulty in differentiating a brand based on price, quality or convenience has actually created a new opportunity — or dare I say a new imperative — for all marketers to seek out new ways to make their products matter. One of the most promising new sets of benefits are intrinsic social benefits — those non-traditional purchase drivers that have a positive impact on the life of a consumer, their family or their community.
Using discrete choice analysis, our research across categories ranging from Ready-To-Drink Beverages to Insurance to Retail Pharmacy has identified the most influential social value drivers per category. The big news is that in some categories, social benefits account for nearly 50 percent of consumers’ purchase decisions!
Many leading companies are already reaping the benefits of leveraging social value drivers – benefits that range from increased revenue to enhanced loyalty. Fox example, Chipotle has leveraged consumer’s desire to eat fresh food that is produced using sustainable practices and resources. Their Food with Integrity philosophy has helped increase annual sales by 44 percent (from $2.5 billion to $3.6 billion) in the past two years. Similarly, in the competitive global car market, electric car company Tesla has grown annual sales from $150 million to $2.9 billion, a whopping 1800 percent increase in the past two years.
Think about it this way… expanding on the healthier food example above… if my favorite quick serve restaurant (QSR) offers healthier fare and I opt for that when I eat there, I will feel better about my choice. I may also have more energy or lose weight. That’s a valuable social benefit to me. My family may also benefit by my better choices if they lead to improved health or longer life-span. And finally society may benefit by my potentially reduced medical costs and extended productive years. Of course this is an exaggerated example but I think you get the point. And if one individual can achieve these benefits, think about the impact this could have if every person who eats at a QSR in the USA were to do the same?
So you can see that these new social value drivers are powerful, which is why we CMOs must embrace them if we are to continue to build uniquely relevant and meaningful brands — brands that consumers prefer and repeatedly choose in this evolving market. And if consumers are more often choosing brands that deliver social benefits, not only would we benefit by offering them, but society at large would benefit as well. Wouldn’t that be the ultimate win/win!