In an era of converging crises, purpose is king. Companies that focus on more than just profit are rewarded handsomely: customers are 4x more likely to buy from them, 6x more likely to protect their reputation, 4.5x more likely to be proudly championed, and are 4.1x more trusted.1
Why is purpose so valuable?
Repetitive failures to respond to crises have punctuated the 21st century with an atmosphere of institutional distrust and social isolation.2 Now more than ever, people are looking for something to trust, connect with, and find meaning in.
While trust levels have collapsed for many institutions, the public still believes that purpose-driven businesses can fill the vacuum.2 In exchange for their business, consumers are demanding that corporations reveal their north star, write manifestos, and stand up for causes. To be a viable brand, you must stand for something and take action on it.
Behavioral Science, Democratized
We make 35,000 decisions each day, often in environments that aren’t conducive to making sound choices.
At TDL, we work with organizations in the public and private sectors—from new startups, to governments, to established players like the Gates Foundation—to debias decision-making and create better outcomes for everyone.
Low trust, high expectations: the current state of CSR branding
In the eyes of consumers, companies continue to fail at acceptably aligning purpose and social responsibility. Vapid support for social movements and greenwashing scandals have muddied the waters of what it actually means to be a purpose-driven company.3
These actions are squandering the trust consumers have in business, leading to high skepticism about the legitimacy of CSR efforts.4
Customers are demanding change and are willing to reward it. However, they will not do so unless CSR efforts feel legitimate – tied to a company's broader purpose. How do we align our purpose and CSR to fill the gaps of consumer trust, community, and meaning?
Cognitive dissonance: Why failing to connect on CSR is so dangerous
To understand the dangers of failing to connect your CSR efforts to your consumers, we must understand two key facets of human behavior:
- We tend to view ourselves as good, morally superior people.5
- We heavily identify with our preferred brands.6 We see them as an extension of ourselves, and thus, their actions are an extension of ours.
Increasingly, we are purchasing things that make us feel ethical, good, and just – making CSR efforts critical to retaining customers.
Failing to make bold, tangible CSR goals exposes brands to a poisonous psychological risk: cognitive dissonance – our tendency to avoid the uncomfortable inconsistencies between our thoughts and our actions.
If we view ourselves as highly ethical, if the brands we identify with fail to deliver, it feels personal. It makes us feel like we may not be as moral as we thought we were. This cognitive dissonance is incredibly uncomfortable, so we disengage from the brand.3
So how do we make sure that our brand’s CSR policies feel tangible, impactful, and powerful, in the eyes of our consumers?
A two-step behavioral framework for making CSR efforts stick
1. Build trust through reciprocity - make big changes and broadcast them well
To get consumers on board, you must make it clear that you understand their worries and concerns. Demonstrate that you understand the difficult realities of our world, as well as your businesses’ potential implication in them.
Patagonia’s famous “Don’t Buy This Jacket” advertisement outlined the paradox of being an eco-conscious clothing manufacturer whose products are environmentally damaging to create. Patagonia centred the conversation away from their own self-interest, instead providing consumers with actionable steps to reduce consumption. Intriguingly, this benefited Patagonia, as their sales grew 30% over the next year.7
Lip-service isn’t enough though. If a fast fashion company attempted to run the same ad, it would be laughable. Nothing builds trust better than demonstrating that you are willing to sacrifice in the short-term for your customers' long-term well-being. This is the basis of reciprocity – we give to those who give to us. Thus, companies need to walk the walk.
Prior to this advertising campaign, Patagonia had been pioneering techniques in using recycled fabrics and spent a significant sum sending workers around the country to repair worn-out Patagonia clothing. Advocacy must be followed by sacrificial action.
Even if you cannot deliver perfectly right away, reciprocity signals a genuine effort to take steps towards a better future. While Patagonia needs to produce to stay in business, they align with the customer’s desire for durable, reusable, and repairable clothing. Thus, when the consumer decides to purchase sustainable clothing, it will likely be from Patagonia.
2. Making CSR personal - defeating hyperbolic discounting through social norms
In this new world, simply having a good track record isn’t enough for consumers. Hyperbolic discounting (our tendency to choose smaller immediate rewards over larger future rewards) is critical in building brand connection.
For example, the future of climate change might be hazy in our minds. While we say we care about the environment, we may buy a less sustainable product if it’s a couple dollars cheaper. Regardless of our intentions, the immediate reward often outweighs the vague future benefits.
Many CSR policies suffer from their lack of specificity. Even if a company has a stellar CSR track record, it is usually not well-communicated exactly how buying their products brings about a better future. To combat this, we need to provide consumers with salient information about how their purchase is changing the world, as well as an immediate reward for doing so.
Our secret reward: social norms
Social norms are the standards of behavior that we live by. Humans are social creatures who crave validation: we want to be seen as good, just, and righteous, which happens when we align ourselves with positive social norms. Aligning with these norms can feel rewarding when perceived by others.
Marketing must explicitly link the company’s sacrifice to the consumer’s positive social norms – by purchasing this product, the customer is being charitable, just, and environmental. The immediate reward stems from this validation.
The tale of two tissues: Why 'Who Gives a Crap' is dominating the toilet paper industry
Before Who Gives a Crap broke onto the scene in 2012, nobody felt proud about their toilet paper. The toilet paper industry is a dirty one – it is incredibly environmentally destructive, bad for plumbing, and has less-than-pleasant connotations.
For decades, the industry has been trying to remedy their environmental reputation. The toilet paper company Seventh Generation has been making 100% recyclable toilet paper since the early 1990’s, but has failed to build a community around their solid CSR practices.8
On the other hand, there’s Who Gives a Crap, a start-up that provides a subscription-based bamboo toilet paper service.8 A quick search through their Instagram demonstrates how much cultural cache Who Gives a Crap commands: customers willingly post pictures of their toilet paper, restaurants proudly display it in their bathrooms, and thousands of comments sing the product’s praises. What’s the difference?
The reason Who Gives A Crap lands and Seventh Generation doesn’t is because of their product design and their mission.
- Who Gives A Crap has slick, recognizable packaging that operates as a social signal – using the toilet paper demonstrates the customer values charity, sustainability, and kindness.
- This marketing is backed up by action: they donate half of their profits to building sanitation facilities in disadvantaged countries, an easy-to-understand metric of change.8
Both companies have solid CSR, but because Who Gives a Crap’s method of change is tangible, sacrificial, and designed to signal positive social norms, consumer enthusiasm follows.
How to humanize CSR
What we consume defines us: our hopes, our fears, and our morals. It is no longer acceptable to simply invest in CSR - we now must make a connection. Leveraging behavioral science, we understand that CSR failS to connect when they:
- Fail to Reciprocate: CSR fails to show the company is willing to give up something to get consumer trust. Thus, they should broadcast that they, for the good of humanity, are making genuinely difficult business decisions. Without this, consumers do not feel like there are grounds for genuine reciprocity, minimizing trust.
- Ignore Hyperbolic Discounting: Without providing tangible, immediate benefits to the consumer, your grand CSR initiative may simply be ignored. As we self-identify with brands, linking your product/service to affirming social norms can help consumers feel like part of the change.
Taken together, we can scientifically build brands that align CSR and purpose. In doing so, we can build brands that build up consumer communities, deliver meaning, and tangibly change the world.
The Decision Lab is a behavioral consultancy that uses science to advance social good. Through our work with leading organizations in the field, we know how powerful effective CSR can be in bringing about a better world. Thus, we are passionate about improving CSR operations at all levels — from supply chains to branding. If you are interested in revolutionizing your CSR efforts, contact us.
- Zeno. (2020). 2020 Zeno Strength of Purpose Study. Zeno. Retrieved July 21, 2022, from https://www.zenogroup.com/insights/2020-zeno-strength-purpose
- Ries, T. E. (2021). 2021 Edelman Trust Barometer. Edelman. Retrieved July 21, 2022, from https://www.edelman.com/trust/2021-trust-barometer
- de Jong, M. D., Huluba, G., & Beldad, A. D. (2019). Different shades of greenwashing: Consumers’ reactions to environmental lies, half-lies, and organizations taking credit for following legal obligations. Journal of Business and Technical Communication, 34(1), 38–76. https://doi.org/10.1177/1050651919874105
- PwC. (2021). 2021 consumer intelligence series survey on ESG. PwC. Retrieved July 21, 2022, from https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/consumer-and-employee-esg-expectations.html
- Tappin, B. M., & McKay, R. T. (2016). The illusion of moral superiority. Social Psychological and Personality Science, 8(6), 623–631. https://doi.org/10.1177/1948550616673878
- Cătălin, M. C., & Andreea, P. (2014). Brands as a mean of consumer self-expression and desired personal lifestyle. Procedia - Social and Behavioral Sciences, 109, 103–107. https://doi.org/10.1016/j.sbspro.2013.12.427
- Szekely, F., & Dossa, Z. (2019, February 8). Patagonia Sustainability Strategy: Don't buy our products: Case study. IMD business school. Retrieved July 21, 2022, from https://www.imd.org/research-knowledge/case-studies/case-studies/patagonia-s-sustainability-strategy-dont-buy-our-products/
- Nosowitz, D. (2019, July 17). Disruption has come for toilet paper. Vox. Retrieved July 21, 2022, from https://www.vox.com/the-goods/2019/7/17/20688093/toilet-paper-no-2-tushy-who-gives-a-crap-charmin
About the Authors
Triumph is passionate about understanding how human behavior influences our world. Whether it be global macroeconomics or neural networks, he is fascinated by how complex systems work, as well as how our own behavior can help create, sustain, and break these systems. He is currently pursuing a Bachelor’s degree in Economics and Psychology at McGill University, attempting to design an interdisciplinary approach to better understand all the quirks that make us human. He has experience in non-profit consulting, journalism, and research. Outside of work, you can find Triumph playing bass guitar, gardening, or down at a local basketball court.
Sekoul is a Co-Founder and Managing Director at The Decision Lab. A decision scientist with an MSc in Decision Neuroscience from McGill University, Sekoul’s work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.
Sarah Chudleigh is passionate about the accessible distribution of academic research. She has had the opportunity to practice this as an organizer of TEDx conferences, editor-in-chief of her undergraduate academic journal, and lead editor at the LSE Social Policy Blog. Sarah gained a deep appreciation for interdisciplinary research during her liberal arts degree at Quest University Canada, where she specialized in political decision-making. Her current graduate research at the London School of Economics and Political Science examines the impact of national values on motivations to privately sponsor refugees, a continuation of her interest in political analysis, identity, and migration policy. On weekends, you can find Sarah gardening at her local urban farm.