Emotion has always been an important variable of a customer’s purchase decision equation. However, today’s fashionable new entrants also include ethics and politics.
Emotional capital not only includes the aesthetical value of a good, or its simple social statement, but the associated political and ethical message that the good and its purchase carry. The latest H&M and Nike boycott in China following the Uighur scandal shows the complex connection between ethics, politics and business.
There are three key behavioral trends that we are observing among customers that demonstrate that ethics and politics drive purchase decisions more than ever. It is important to understand these trends to build a brand that successfully engages and attracts a loyal customer base, driven by ethical and political values.
1) The era of ‘Made in X’
Let us start with an anecdote. A French couple in their 50s were considering the purchase of a robotic vacuum cleaner. When instructing the salesman on their preferences, they insisted on their price sensitivity and on the product’s top performance. They, however, picked a less performant and more expensive €100 French robot v a Chinese counterpart. The ‘Made in France’ label spoke to their values. The couple’s decision was not driven by quality, but by politics and patriotism.
The ‘Made in X’ label has always been a statement of quality. You only have to look at the fashion industry to know the weight that the ‘Made in France’ or ‘Made in Italy’ labels carry. A French Polling and Marketing Institute (IFOP) poll showed that 93% of French people were driven by political motives when buying ‘Made in France’ products, while the ‘Made in Italy’ stamp was valued around €243 billion. Customers do not only derive value from using the product, but instead there is a sense of national loyalty for making an almost charitable donation in the name of their country.
2) Diversity and inclusion
Similarly, in the revival of the Black Lives Matter (BLM) movement, a similar rationale and drive was seen from customers to showcase their values through their purchase decisions. There was a 7,043% increase in searches for these businesses last summer compared to the summer of 2019. Black-owned businesses also reportedly increased their order sales by 300%. That trend even preceded BLM, with 64% of consumers likely to make an immediate purchase if brand ads showed a commitment to diversity and inclusion.
3) Purchase as charity (PaC)
Another notable trend is ‘Purchase as Charity’ (‘PaC’), which embodies businesses’ commitment to charitable causes. We have observed a rising number of businesses stating that for any purchase, they would give away a part of their profits to one or several charities of their choice. A good example is Thrive Causemetics, a US beauty brand whose strapline highlights its values and purpose – ‘Luxury Beauty that Gives Back’. For every purchase, the brand donates the same product and a part of their profit to help women thrive with causes that include fighting cancer, emerging from homelessness and surviving domestic abuse.
The Pac marketing mechanism is a way for businesses to not only show their values and purpose, but also to connect and build meaningful relationships that align to their customers’ values. Unilever reported that its brands that acted in favor of people and the planet grew 69% faster than the rest of its business. The pandemic also showed that 63% of certified B-corps (companies with a clear positive social and environmental impact) were more likely to perform better than their counterparts.
Now that we know more about some of the new forces that are driving purchase decisions, here are important steps to consider for businesses who want to thrive in the era of the political and ethical customer.
Think brand, not business – build a brand with vision and purpose
Whether the business is starting up or already established, having a North Star strategic vision is essential. The North Star is the direction and ultimate ambition of the business over a pre-determined period of time. It should be intrinsically connected to its purpose. The first step of that exercise consists of internally understanding the culture and values of the business through the eyes of the employees.
Indeed, employee advocacy is seven times more likely to lead to conversion and increase customer loyalty by 37%. Emotion drives brand equity and that is why capturing the business’s internal emotional drivers is essential to building a brand. Businesses come and go, but brands that deliver emotional connections survive.
Key brand-building questions to consider are:
What are our ambitions?
What drives us to work every day? What are our beliefs and motivations?
What are our values and overarching purpose?
Your key enablers to answer these questions will be:
Individual interviews with employees/stakeholders
Thinking sessions with your employees and key stakeholders – iterative creative problem-solving sessions drawn on the understanding of stakeholders’ human needs
An open, safe and inclusive workshop environment
Facilitation to align on a common set of values
However, the magic happens if, and only if, that emotion is built and shared with the employees as well as the customer, which takes me to the second step of the exercise.
Co-design with your customer
Build real connections with your customers, understanding them as people and citizens. Favor channels that enable you to create emotional bonds such as small, personalized and safe digital environments like emergent digital clubs and communities. Dr Sam’s Skincare Club or Glossier’s Into the Gloss are great examples of virtual communities that connect customers together and give them a platform to share their thoughts, feelings and needs on ‘all things skincare’ and on the brand’s products.
As well as this, make your customers an integral part of the strategy and product design process. Convert these conversations into insights that will drive your customer segmentation work, and help you generate accurate ethical and emotional customer profiles. It is important to involve your customers in the design process beyond interviews by creating a constant feedback loop, involving them in internal design thinking workshops, and making them an integral part of your way of working. Many businesses have successfully integrated co-design as part of their ways of working, such as Lego with the creation of its ultra-successful Lego Ideas Crowdsourcing platform.
The first two steps of understanding your customers and internally aligning your employees will produce invaluable insights, which need to be converted into key concepts and design principles. Some of these design principles might be purely on the enactment of political and ethical values, and others will only include a political and ethical dimension or implication. Regardless, these design principles will then serve to drive business initiatives, decisions and the very creation of new products and services – or in other words, innovation. Ethical and political design principles here are not the icing on the cake – they form an integral part of the cake itself.
The ‘Made in X’, diversity and inclusion, and PaC trends all illustrate the value of designing products and services based on political and ethical principles. As these trends accelerate, brands need to react accordingly and design a clear purpose and brand vision, and co-create with their employees and customers to hopefully design a better world altogether that is powered by ethics and purpose.
Cherazade Ghalifa is an innovation and customer strategy consultant at Capgemini Invent.