Give it some heart and soul – and reap the rewards

A recent survey I read by Circle Research shows that only 7% of global SMEs have an ambition related to ‘societal improvement’. They’d much rather achieve growth, satisfy their customers, and improve their business processes. But that doesn’t surprise me. After all, improving society is much more of a “soft” ambition. It can’t deliver real value in the same way as business growth or process improvement do. Or can it?

Consumers care According to a 2014 Nielson report, a brand’s social purpose does influence purchase decisions. 55% of global online consumers say they’re willing to pay more for products and services provided by companies that are committed to positive social and environmental impact. And that figure goes beyond 60% in Asia-Pacific, Latin America, and the Middle East/Africa. But, is that just the case of consumers wanting to sound good in a survey? Or, do their actions speak as loudly?

Beware: the world’s watching

A few years ago a documentary aired in the UK about the use of child labour by the European, discount fashion retailer, Primark. It attracted 4.2 million viewers – making it the most watched programme at that time. By the next morning, Twitter was abuzz with consumers’ scathing comments. A mass boycott and series of protests followed, and Primark’s reputation took a beating. While the retailer was quick to respond by sacking suppliers and setting up a charitable foundation for children, for many the damage had been done.

A taste for ethical trade

Consumers’ appetite for ethical goods really does seem to be increasing. Take Fairtrade: 50 years ago it was little more than a buzzword, today it’s the most widely-recognized ethical label in the world, found on everything from floral bouquets to fine wines. And, to what does it owe its success? Consumers. According to the Fairtrade International’s 2012-13 annual report, consumers spent 4.8 billion Euros on Fairtrade products in 2012 and sales in key markets increased significantly – proving there’s a real appetite for ethically-sourced goods, even if they do come with a premium price.

Unethical actions undo trust

People really do care about what they’re consuming – and further proof came in January 2013, when UK food manufacturers were hit by a huge scandal. Consumers discovered that, rather than tucking into burgers and lasagne made of beef, they’d been eating horsemeat – and it wasn’t to their taste. According to industry analysts, Kantar Worldpanel, year-on-year sales figures for frozen burgers tumbled 41% between March and April. While frozen ready meals sales fell 11% in March and 15% in April. In all, British consumers bought nearly 8,000 tonnes less red meat in 2013.

It pays to care

Business ethics can be a can of worms and these examples barely scratch the surface. What they do begin to demonstrate though, is that modern consumers want – and expect – transparency. They want to know what they’re buying, where it’s come from, and how it’s made. And, they’re relying on businesses to tell them. And, while there may be some gaps between what consumers say (we all want to be seen as ethical and caring) and what they actually do, there’s still clearly an appetite for businesses to perform in an ethical way. And, for those that do, there are also some handsome rewards.

So, when thinking about your ambition, try taking a long-sighted view and think about the bigger picture. Consider how improving your local community, caring for your employees, or developing ecological credentials could help you win over consumers, build your brand, and leap ahead of competitors. Get it right now and you could save a lot of grief in the future – because your consumers will catch up with you one day.

You can read the report, “Ambition: why being ambitious matters and how SMEs are achieving their goals”, sponsored by SAP, at Ambition

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