In this quarter’s column, we explore “shared social responsibility” — the idea of companies working in tandem with charities and customers to support socially beneficial causes.
One way this can work is illuminated in a recent study co-authored by Leif Nelson, an associate professor of marketing at the Haas School of Business at UC Berkeley. Nelson and his colleagues have shown that when customers are allowed to pay what they want for a purchase, and — this is key — when they simultaneously know a portion of their money will go to a specific charity, they offer substantially more than they would without the involvement of the charity.
It turns out that just offering a product at a fixed price and telling customers that a certain percentage of their purchase will go to the charity doesn’t stimulate as many sales — and therefore doesn’t raise as much money as hoped. Yet this is the most common charitable promotion consumers see.
Interestingly, the study reveals that letting people pay what they want, combined with a promise that some will go to charity, produces even more profit than selling them a product at a regular, fixed price — whether that price has a charity offer attached to it or not. It also produces a surplus that can go to the charity itself. This type of co-participatory pricing scheme, then, is an ingenious way of stimulating both philanthropic giving and increased sales — a win-win for everyone.
If you have 5 minutesyou can check this insigth to the "honest bar" phenomena here: http://csi.gsb.stanford.edu/pay-what-you-want-pricing-and-charitable-giving
No comments:
Post a Comment