Two scarves, both colorful and fashionable. One is made by a certified fair trade producer, and the other by a company that received a “F” on the Free2Work scorecard for their protection of worker rights. How can we retain the value of these certifications and social stories when they’re becoming so widespread and misplaced? Tim Rann, a freelance consultant for start-up social businesses and impact investment funds,examined the potential dangers of relying on a social story.
Originally posted on Tim’s blog.
I don’t think this is a bad thing – it’s a beast that people like you and I created by demanding corporations act more responsibly and purchasing more and more products that have some positive social impact (i.e. fair trade, organic, etc.).
But I am worried.
1) Social stories oversimplify complex issues and can easily lead to skepticism, and
2) when everyone has a social story there is a diminishing competitive advantage in using that one-dimensional approach.
#1 – Fair trade (or other similar certifications) are a popular way of legitimizing your social story. Having worked with one of the few fair trade certified fashion product manufacturers in Cambodia, I saw firsthand how time consuming and expensive it is to be certified. In addition, I saw how the brand seems to carry little value. Every single business here says they are fair trade, from sweat shop garment manufacturers to handicraft cooperatives to small fashion stores. Do consumers even know what fair trade means? Do they know or care about the different certifications or what this means for the business that achieves it? If expensive certification doesn’t add value or is adhered to, there is no control over how social stories are monitored for quality – a dangerous proposition bound to breed skepticism.
A social story brand, just like any other, is built on our emotions. You drink Gatorade because you want to be a stellar athlete or go to Starbucks because you want a “third place” to relax with a good cup of joe. However, unlike these brands where the consumer can interact with your product directly to tap into that emotion, social stories sum up very complex issues in a few sentences or maybe just a logo. Once skepticism arises in that social story, it can spread like a pandemic and affect others in the wider social product niche. All it takes is for you to buy one fair trade product that you find out is actually having a misleading, negligible or negative impact on its intended beneficiaries. Anyone remember when Save the Children started soliciting funds for donors to help orphans, who were actually very healthy middle class children with families (see “The Road to Hell”)? Hating aid is sexy now (see Dambisa Moyo and William Easterly) and I think people are looking more and more closely at social stories with reservations.
#2 – We’ve demanded that corporations act more responsibly and we’re pushing them to keep pushing boundaries in their practices. This is great. But now everyone is using this to sell their products. I challenge you to find a Fortune 500 company without a fancy CSR report (probably costing tens of thousands of dollars to publish). When everyone has a social story, it is simply noise and ceases to differentiate you.
Anyone who has traveled in Cambodia knows this – is there any product here that isn’t made by an orphan, poor (no specific definition ever given) person, handicapped individual, single mother with 8 children, etc.? I am not attacking business as a way to help get these persons (which I will assume are actually in need) valuable income – I am questioning their use of the social story as their key competitive advantage over other products.
NGO’s and idealistic entrepreneurs jumped on the bandwagon and started to produce goods that few logical consumers would ever buy without a social story (how many crummy recycled bags does every expat in Cambodia have?). It worked for awhile, but the 2008 recession was a rude wake-up call for many in the field and I suspect the gains are continuing to get smaller and smaller. When everything has a social story, the value diminishes and consumers look for another way to differentiate products. At that point, you’re simply selling goods in the competitive open market.
So what can you do? Build a reputation around the quality and transparency. If your brand can assure potential customers that you offer a high-quality product and that your sale is actually going to support XYZ cause, you can avoid the social story noise. Easier said then done of course – building a brand takes time and resources.
I think PEPY Tours does an excellent job from its introspective team blog to the detailed responsible tourism guidelines to a detailed explanation of where the dollars on each tour go – not to mention the fact that its tour products have been recognized as some of the best in the world by key industry players like National Geographic.
Rajana Crafts is another group that is doing great work by maintaining a dual focus on high-quality products and reinvesting in the social capital of its artisans. Rajana understands the value of maintaining customer relationships, constantly changing its product offering, and providing unique, high-quality goods. It’s simple business stuff, but is often overlooked by social businesses looking for a quick sale.
You might get my dollar once for your social story, but when/if it fails to satisfy my consumer need, I will go elsewhere and will not come back. You will get my dollar everyday, however, if your product meets my real need. The social story is icing on the cake and, all things equal, will elevate you above another non-social offering. As any business 101 book will tell you, repeat customers are cheaper to retain and more valuable in the long-run than a revolving door of new customers.
I believe that the highest praise a social business can get is “Wow, that was amazing. I would have bought this/eaten here without knowing that my dollars supported XYZ.” This conveys your respect for the talent of the producer of that good. As well, it is the mark of a good social business, which developed the support structure for their beneficiaries to realize their innate potential and provide a good/service at a very high level.