Friday, October 1, 2010

CSR and Consumers in Shared Social Responsibility

With all the recent controversy about Corporate Social Responsibility, including the latest debate sponsored by Fenton, one important factor notably missing in the discussion is the impact of customer decision making behavior on corporate giving choices.

In a recent study: "Shared Social Responsibility: A Field Experiment in Pay-What-You-Want Pricing and Charitable Giving" by Ayelet Gneezy, Uri Gneezy, Leif D. Nelson, Amber Brown published in Science Magazine, July 2010, customers at an amusement park were given choices for how they could pay for souvenir photos of their ride on the roller coaster.
When customers were given the choice to buy the souvenir photos where half of the profits would go to charity, they seldom bought the package. On the other hand, when another group was offered to buy the photos and pay what ever they wanted, knowing that that 50% of the profits would go to charity, sales almost tripled.

It may make no "business sense" to offer any kind of" pay as you want" program, and certainly Panera bread and other businesses which we wrote about in an earlier post  have been doing just that. Yet customers, seemingly, are willing to pay a lot more to the company when they feel part of the Corporate Giving. The authors of this study suggested that:
"Switching from corporate social responsibility to what we term shared social responsibility works in part because customized contributions allow customers to directly express social welfare concerns through the purchasing of material goods"
The critics of CSR seem to not have taken into account the factor that consumers want to feel that they are sharing in the opportunity to give back . If companies question whether their responsibility to shareholders is more important than their responsibility to their communities, maybe they should take their shareholders out to the amusement park.

No comments: