Marketing 0

The New Hygiene Factor
When Marketing 3.0 was introduced a decade ago, a purpose-driven
business model was a relatively new source of differentiation that
gave early adopters a competitive edge. As a group of customers
began to favor brands whose activities had a positive social impact, a
handful of companies started to embrace the human-centric
approach and make it the core business strategy. These pioneering
brands, such as The Body Shop and Ben & Jerry's, were considered
cool. Several solutions to societal problems were embedded in their
businesses, allowing customers to participate. Humanity's toughest
challenges were, at the same time, the biggest business opportunities
for these companies.
Today, this trend of human-centricity has become mainstream.
Thousands of companies have put particular focus on their social and
environmental impact, even actively using it as a major source of
innovation. Many brands have captured a loyal following by
promoting a health-conscious lifestyle, minimizing carbon footprint,
conducting fair trade with emerging market suppliers, ensuring good
labor practice, or building entrepreneurship at the bottom of the
pyramid.

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It has become a hygiene factor that without broader vision, mission,
and values, brands have no license to compete. Companies that fail
to incorporate responsible practices run the risk of being overlooked
by prospective customers. Customers are increasingly making their
buying decisions based on their perceptions of a company's ethical
conduct. Indeed, customers now expect brands to work for the good
of society at large, and corporations know it. The “Stop Hate for
Profit” campaign, in which Microsoft, Starbucks, Pfizer, Unilever,
and hundreds of other companies paused advertising on Facebook,
calling for the social network's better handling of hate speech and
misinformation, is a testament to the importance of corporate
activism.
Brands should develop and nurture—not only exploit—the markets
in which they are competing. In other words, businesses are
considered responsible for growing not only short-term shareholder
value but also long-term societal value. And thanks to the Internet,
companies are under constant scrutiny, and it is easier for customers
to monitor the ethical aspects of businesses. It is now standard
practice for companies to monitor and publish their progress
through sustainability reporting, which regularly discloses the
economic, environmental, and social impacts caused by their
operations.