Social Enterprise

Social Good Is Always Good Branding—or Is It?

Building a brand solely on social impact is not a guarantee for success, and it comes with risks that can take businesses by surprise.

These days, businesses that put their social mission in the spotlight are taking the world by storm. But building a brand solely on social impact is not a guarantee for success, and it comes with risks. Social enterprises and other businesses should consider these five points before making social good the star of their show.

1. When a business’s impact model comes under fire, the entire business can suffer.

To make their social impact clear cut to the public, businesses often simplify transactions: A purchase means another product is donated to someone in need, or the percentage of a sale goes to a good cause. But it’s not always so simple, and when this social impact model comes under scrutiny and is intertwined with the brand, companies risk of losing credibility and sales.

Tom’s Shoes is a well-known case in point. Tom’s has built its business on the now much-replicated buy-one give-one model, resulting in more than 35 million pairs of shoes donated to children across the world—one for each pair sold through its commercial channels. The company has put buy-one give-one at the front and center of its brand—an easy-to-understand impact model its customers love to support and be associated with. But in recent years, Tom’s philanthropic model has garnered criticism pointing out that products donated to developing countries often distort the local markets, undercutting local suppliers and contributing to unemployment. The company has faced headlines linking it to social harm—the exact opposite of what it set out to achieve. Tom’s is developing a new impact model—one that addresses these issues—but it will be far less easy to capture in a four-word phrase.

2. Consumers may not value what a business thinks is socially valuable.

Many businesses aiming for impact put a social issue at the center of the story of their brand. But in some cases, they might be better off not mentioning it at all and instead focusing on product benefits.

In 2008, for instance, Indian megaconglomerate Tata Group launched the Nano, a “car for the masses” priced at $1,500. It proclaimed its vision of an India where even the poorest could afford a car. The project failed to meet expectations, partly because no one was willing to buy what everyone else saw as a car for poor people. By contrast, the Kenyan mobile payment system M-PESA has made an invaluable social impact by providing people at all income levels with a money-transfer service, effectively creating a bank for everyone. Though it has advanced the lives of millions, M-PESA simply promotes itself an effective, cheap, and safe way to pay bills and receive payments. If M-PESA labeled its customers as “bottom of the pyramid” and its product as a way to “rescue” them from poverty, it would likely make the brand far less attractive in the eyes of its intended consumers.

3. The impact a business is working toward may be harder to achieve than it thinks.

Consider: A company starts with a great social mission and shouts it from the rooftops. But a ways down the road, it finds that accomplishing that mission is much more complex than it could have imagined, and it can’t deliver on its promises. 

Tony’s Chocolonely started off in 2005 as an ambitious Dutch chocolate manufacturer that aimed to end the exploitation of slave labor in its supply chain. The original label on its chocolate bar wrappers featured a pictogram of a breaking chain, with the words “100 percent slave-free.” Over the next few years, Tony’s realized it couldn’t guarantee this claim (nor could any other company in the industry) and changed the labels. They now read, “Working together to become slave-free,” and the company hopes to achieve its original mission next year when the origins of cacao butter will finally be traceable. The brand has been open about the problems it faces in the global chocolate trade and even shares articles critical of their long journey towards slave-free on Facebook. While the popularity of the brand has not suffered (today it is the third-biggest chocolate brand in the Netherlands), it is safe to assume that Tony’s is the exception to the rule. A similar scenario could easily put another company out of business.

4. A brand based on goodwill can forget to compete on quality.

Branding something first and foremost as socially or environmentally good might end up distracting some businesses from delivering the best product or service it can deliver. Even if a business successfully sells a feel-good product or service to a consumer, that feel-good effect won’t be enough to keep them coming back if the product is sub-par. This sounds obvious, but many organizations depend on good intentions to keep them afloat. 

5. Social and environmental impact won’t be differentiating forever.

Times are changing, and soon competitors in every market will be able to claim the same mission for impact.

Today, amid big banks rocked by scandal, a small, ethically driven bank that invests only in sustainable or social impact funds is set to catch people’s eye. On supermarket shelves packed with mass-produced foods, organic, handmade products stand out. But as time goes by, many more companies will incorporate social and environmental responsibility in their messaging, and in the long term, relying solely on this aspect of brand as an advantage over others is risky.

Businesses should consider a multi-value approach. What are other differentiating qualities? If a company delivers microcredit to the base of the pyramid, is it the best at service or does it offer the lowest rates? Does it also offer free personal finance classes? Businesses need to give people a reason for why they should choose their product or services over another’s.

Putting social or environmental impact at the heart of a brand is often an instinctual move when developing products or services designed to create change. But it’s not a failsafe strategy. Businesses must consider their consumers, market, and positioning before building a brand. If the goal is to create real impact, companies might achieve that sooner through playing it down.

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COMMENTS

  • BY David Hessekiel

    ON March 10, 2016 02:27 PM

    Wow - this is a terrific piece.  As so many well-intentioned entrepreneurs have discovered, a desire to do good is admirable but it is not enough of a base on which to build a long-term sustainable business.  The magic is in getting all of the traditional marketing “P’s” right and adding the P of Purpose in the right way.  Well done Anne.

  • Oliver Hack's avatar

    BY Oliver Hack

    ON March 10, 2016 03:13 PM

    Succinct. Thank you.

  • BY Birgitta Ralston

    ON March 12, 2016 05:39 AM

    Great insights and take aways in this article. Thank you Anne!

  • BY Devin Hibbard

    ON March 12, 2016 11:11 PM

    Brilliant! These are important points for anybody in the social impact sector to consider. Keeping these things in mind also prevents “unintentional greenwashing,” where businesses aren’t living up to their messaging, even if they try, because they aren’t keeping an eye on the right things in their business or their social mission.

  • BY Anne Miltenburg

    ON March 14, 2016 01:50 AM

    Thank you all for your encouragement on this topic. Though we all want social ventures to outperform traditional ventures, the efforts should be more than skin deep. As a brand developer, you are not in charge of a clients impact model but I feel that we can play an important role in sharing the other side of the story with starting entrepreneurs and existing enterprises who are looking to make the switch.

  • Related to #4, it is important for social ventures to ask whether their product or service could stand on its own- ie if the social value wasn’t there, would the product or service still be attractive to the customer.  If the answer is ‘no’ or ‘maybe’ then there may be significant risk of short term success and medium term failure when it is discovered that the product or service is actually not on par with its competitors.  Consumers are willing to pay for social benefit only to a point.

  • BY Anne Miltenburg

    ON March 17, 2016 07:34 AM

    Agreed! I’m sure we’ve all had experiences where we let our hearts choose the socially conscious product only to be disappointed by the quality. I’ve personally experienced that the disappointment feels twice as deep in those cases. Once this experience has sunken in, you will never be a repeat customer and to your point, I am then part of a first wave of supporters but there will be no repeat purchases to create actual growth.

  • This was a really good read and brought up some great points.  Do you think these points exist for smaller social enterprises?  These types of businesses usually aren’t focused on branding (they have no marketing strategy).

  • BY Anne Miltenburg

    ON March 21, 2016 12:11 AM

    Hi Derek, yes, a small example from my daily practice: I was once approached by a starting entrepreneur who wanted to create a body care line with some sort of social impact construction. She thought about doing a one-for-one line of body lotions, donating one bottle for each one sold in Europe to ‘women in Africa’ (as she described it) and wanted to hear our thoughts on developing a brand for such a product. Though we are not experts in developing impact models, we felt that this concept was ill-conceived for many reasons and a painful example of how the simplicity of philantropic model can misguide peoples thinking and enforce destructive stereotypes . But the entrepreneur was convinced that the goodwill brought on by the one-for-one model was in itself the best marketing strategy for her product on the European market.

  • BY Ifzal Ahmad

    ON March 21, 2016 02:05 AM

    Excellent points which need not to be taken for-granted. CSR practices can make or break your corporate’s reputation. I also keep writing on this particular issue via my own blog. I invite all the readers to pop in and suggest improvements please. Sharing the link for your info. http://www.csrcafe.com/2016/03/the-role-of-csr-in-corporate-reputation.html
    Cheers,

  • BY Fairwater Paul Beers

    ON March 21, 2016 11:20 PM

    Good article, let’s hope that the “Social Enterprise” idea is not becoming the next marketing hype as “Sustainable” has become. Many organisations claim whatever, but lack transparency, which disqualifies them from being a Social Enterprise in the first place. 

    Same is true for many NGOs; they raise millions but fail to be transparent in what they do and about their impact.

    Many of those so called “Good-Feeling” products and services in the end have little or no impact but just makes YOU feel good for a short moment and their CEO bonus skyhigh. If they first try to make you feel guilty with a kind of social or environmental problem and offer a cheap quick solution, be aware of possible #GreenWashing and check their transparency and impact model.

  • BY Ifzal Ahmad

    ON March 23, 2016 02:15 AM

    I just published a detailed commentary on this article on my blog: http://www.csrcafe.com/2016/03/Does-CSR-solely-build-brand-image.html. Please do visit and share your opinion there.

    Cheers.

  • BY Oliver Ive

    ON March 24, 2016 06:58 AM

    Good article. The 5 points noted are in line with our experiences in building and branding a social enterprise.
    When all is said and done, consumers and customers, no matter where they fit in the economic hierarchy, if paying for and receiving goods and services expect good value. This applies as much to those at “the bottom of the pyramid” as those closer to the top.

  • BY Rebecca Perez

    ON May 21, 2016 04:55 PM

    Such good comments on the challenges of branding social impact. Thank you for articulating these points so well, I’m a big fan of your work.

  • BY Anne Miltenburg

    ON May 23, 2016 12:58 AM

    Thank you Oliver and Rebecca much appreciated. Ifzal, thank you for your detailed comments I apologise for not getting back to you quicker! I love your response and I think it highlights how fluid the different areas of business are: is it failed CSR, is it failed user testing, or is it failed branding? At the end of the day, we count it as failed branding when an organisation has actively built the psychological frame of their branding on the social aspect. So totally agreed that Tata’s car was bad user research, but they presented it as a car for all. Misguided branding is always the result of oversights or mistakes in a long chain of steps.

  • Jarbas Cardoso's avatar

    BY Jarbas Cardoso

    ON June 6, 2016 05:26 PM

    Muito bom, gostei do texto. Me ajudou.

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