In recent years, more brands are calling themselves “ethical.” They are the antithesis of brands such as Forever 21 and Ikea. They deliver products and services that, although slightly more expensive, do not cause harm to people, animals, and the environment. These brands pay the people who manufacture their products a living wage, not keep them in slave-like conditions for little money. They do not use leather nor test on animals. And, their products and services do not destroy the planet.
Businesses that are ethical are different in the sense that their only goal is to make more money. The role they play is to offer an alternative to the goods that are mass-manufactured and, often, made under practices considered unethical. As a result, consumers trust them.
What You Gain from Being Ethical
Owning an ethical business is a gift by itself. It feels good knowing that you are not tramping on another person’s rights, not hurting another creature, nor contributing to climate change. Moreover, it is good for business.
One recent study looked at the impact of an ethical business versus a regular business on consumers. It involved over 2,000 participants between the ages 18 and 65 years old. They were asked about their involvement in the purchase of services from clothing retail chains, financial institutions, insurance companies, utility companies, internet service providers, supermarket chains, gas stations, and others. The researchers found that ethical brands boost customer loyalty.
There are many other ways to boost customer loyalty, one is by creating a customer-centric business. It can be achieved by listening intently to what the customers want by adopting a strong voice of the customer (VOC) program. However, what the customers want right now are ethical business practices.
The researchers found that, compared to others, ethical brands enjoy higher levels of customer loyalty. They also have a stronger commitment to repurchase from ethical brands.
A Positive Reputation
Consumers also look at ethical brands positively. Customers see the quality of products and services of the business to be superior compared to its competitors. Therefore, they walk away from a transaction with greater satisfaction.
These factors will further increase customer loyalty. They are more likely to repeatedly support a business where their transaction has been satisfactory.
In addition, satisfied consumers become ambassadors of the brand. They will recommend the business, its services, and products to family members and friends. They will post about it on social media for their followers to see. In short, they will send more customers to your business.
To this day, word-of-mouth remains to be the most effective strategy for marketing.
Retain Employees
Businesses that follow ethical practices are not a revolving door of employees. The work environment they tend to create is more pleasant and supportive because no one feels exploited. Employees also become more productive because they believe in the cause that they are working for.
Moreover, people want to work for a company that makes the world a better place. The top talents around the world do not want to be associated with an employer that people dislike. They want to spend their everyday working toward a bigger purpose than to simply earn money. Therefore, ethical brands capture the interest of the best professionals around.
Avoid Legal Issues
Being involved in a lawsuit is expensive. The fees alone can empty the coffers. If you have been found to violate an agreement, the fines you will have to pay may bankrupt your business.
An ethical brand does not cut corners in order to increase revenue. They follow the rules no matter what. They comply with environmental regulations and labor laws at all times, even if it is inconvenient or expensive.
The penalty for breaking the rules for businesses can be expensive. In addition, it is going to affect how the consumers look at the brand. Sanctions given by governmental agencies lead to negative press which, in the time of the internet, will never disappear. The consumers who do their research before making a purchase will find out about the scandal, even years later, and stay away from the business.
There is so much to lose from being embroiled in a legal issue. It is better to avoid it.
Maintaining an ethical brand is not just a trend. It can have positive impact on the success of the business. However, true ethical brands do not care too much about its impact on profit. The goal is, at the end of the day, to provide products and services that are good for consumers, their employees, and do not harm the animals and environment.
