Trade Ethics with Consumers

If you’re in business for the long-term, being seen as ethical helps. Many consumers are willing to pay a premium for an assurance they won’t be cheated. But if you’re marketing yourself on the basis of being ethical, you’ll want to activate in members of your target audience a desire to patronize an ethical retailer. Revenues from stores positioning themselves primarily as ethical typically are less than revenues from stores hawking luxury or value attributes.
     Researchers from Florida State University, University of British Columbia, and Simon Fraser University find that one effective way to arouse consumers’ desire for ethical retailing is to activate consumers’ self-accountability and a consequent sense of obligation. In advertising, publicity, and social media postings, give specific examples of your attention to business ethics and describe how good your customers felt as a result. On shopper surveys, ask how what consumers experienced in your store fits with their personal ethical standards.
     Most important of all, in your face-to-face interactions with each customer, trade on your ethical practices. Business researchers at Harvard University and University of Notre Dame analyzed instances in which retail businesses cheated customers. The researchers concluded that in many cases, the owners/operators did not intend to do wrong. The slippage was unintentional, at least at the start.
     One example the researchers give is from the auto repair shops at Sears, Roebuck and Co. With the objective of increasing employee productivity and, some say, wanting to serve customers more promptly, management set a goal for the automotive mechanics: Each was to do at least $147 of billable work per hour.
     The result was not faster work, however. Rather, the mechanics looked for items to repair that weren’t really broken. They also jacked up charges for legitimate repairs.
     The Harvard/Notre Dame researchers classified the ethical lapses. Here’s my version, along with suggestions for heading off the ethics slippage:

• Ill-conceived goals. The Sears auto repair episode is an example. Before setting standards, encourage suggestions from those responsible for the implementation. 
• Indirect blindness. A retailer might outsource tasks and then fail to monitor the work quality. Keep accountability for outsourced work. 
• Slippery slope. In many cases, a minor transgression is okay, but do check back to ensure the minor transgression doesn’t become a revised base for what is acceptable. 

     When you are ethical and deliver full value, consumers will, in exchange, want ethical retailing. That’s a fair trade.

Click below for more: 
Prefer Obligation to Shame 
Anticipate Ethics Slippage