Good companies in the age of austerity paul flatters trajectory

Prepared for CIM Social

Marketing Group Nov 2011

Good companies in the age of austerity

Agenda

• Objectives

• Methodology

• Influences on purchasing decisions

• What makes a good company

• The relationship between the consumer and

the company

• Conclusions

Objectives

• Original research into the varying influence aspects of a

company's performance has on product purchasing.

• Identification of what values define a 'good' company and how

this changes for different genders and life stages.

• Exploring how influential 'being good' is across different sectors

including financial services, technology, food and drink and

fashion.

• Understanding of consumer perspectives on how the behaviour

of a company they purchase from reflects on them

• Assessment of the appetite for more information about a

company's behaviour and sources of information that they

would trust to tell them

Methodology

• 4 x 90 minute focus groups to explore the issues and help

define the parameters for the questionnaire

• 2005 interviews with UK nationally representative sample

• Fieldwork conducted in June 2011

Headlines: Influences on

purchasing decisions • How good a company is and how it behaves towards its customers

and communities has far more influence on consumers than its

ethical values or its donations to charities.

– Nine out of ten say ‘how good a company is’ is influential when

considering purchasing a product or service

• (91% combined ‘quite influential’, ‘very influential’ or ‘extremely

influential’)

– Nine out of ten say ‘how it behaves towards its customers and

communities’ is influential when considering purchasing a product or

service

• (90% combined ‘quite influential’, ‘very influential’ or ‘extremely

influential’)

– ‘A company’s ethics – environmental, sourcing, sustainable,

employment policies’ and ‘the company donates a percentage of

profits to charity and a good cause’ are less likely to be influential

when considering purchasing a product or service

• (60% and 53% respectfully - combined ‘quite influential’, ‘very

influential’ or ‘extremely influential’)

31

21

7

7

33

37

30

36

14

21

35

37

6

12

25

18

0% 20% 40% 60% 80% 100%

The company donates a

percentage of profits to charity or

a good cause

A company's ethics -

environmental, sourcing,

sustainable, employment policies

How a company behaves towards

its customers and communities

How good the company is

Not at all

Not very

Quite

Very

Extremely

Base: 2005

91%

91%

70%

53%

Source: Great Good survey, 23 Red and Trajectory

Being a ‘good’ company has more

influence on purchasing decisions than

ethics or CRM In general, how influential is each of the following when considering purchasing a

product or service?

↑ Women (93%)

↑ Women (77%)

↑ DE (66%) ↑ 18-24 (70%)

7

1

1

28

13

12

37

32

36

26

52

50

0% 20% 40% 60% 80% 100%

Aftersales service from a

company

The price of the product or service

The quality of the product or

service

Not at all

Not very

Quite

Very

Extremely

Base: 2005

95% of those over 45 are influenced vs.

79% of 18-24 yr olds


Quality, price and service are

still most influential In general, how influential is each of the following when considering purchasing a

product or service?

• People associate values such as honesty (56%) and reliability

(53%) with a ‘good’ company more than ethical issues such

as sustainability (12%)

• Being ‘good’ is most influential for financial services

organisations

Headlines: What makes a

good company

Defining a ‘good’ company Honesty, reliability, responsibility and fairness are amongst the most

important factors in what makes a company ‘good’

27%

17%

12% 10% 10%

7%

4%

0%

5%

10%

15%

20%

25%

30%

Product/service

quality

Honest Customer

service

Reliable Fair pricing

policy

Responsible Fair

Which word do you MOST associate with a 'good' company?

Base: 1949


Customer Service

Product/service quality

Fair pricing policy

Honest

Reliable

Responsible

Fair

Safe Caring

People centred Accessible Innovative

Popular Passionate

Environmentally friendly

Contributes to local

communities Sustainable

0%

10%

20%

30%

40%

50%

60%

70%

Product related

Values

Ethics related


Values are key to a ‘good’

company People associate values such as honesty and reliability with a ‘good’

company more than ethical issues such as sustainability Which of the following words and phrases would you associate with a good company?

Base: 2005

↑ over-55s (68%)

↑ over-55s (60%)

↑ over-55s (43%)

↑ over-55s (19%)

Customer Service


Fair pricing policy

Honest

Reliable

Responsible

Fair

Safe Caring


Popular Passionate




0%

10%

20%

30%

40%

50%

60%

70%

Product related

Values

Ethics related

↓ 8% of 18-34 yr olds





Base: 2005

↑18-35 yr olds (15% popular, 13%

passionate)

↓ 18-34 (34%)

Customer Service


Fair pricing policy

Honest

Reliable

Responsible

Fair

Safe Caring


Popular Passionate




0%

10%

20%

30%

40%

50%

60%

70%

Product related

Values

Ethics related





Base: 2005

↑ women (21% safe, 19% caring)

↑ men say innovative (19%)

↑ women (23%

environmentally friendly,

16% contributes to the

community)

Customer Service


Fair pricing policy

Honest

Reliable

Responsible

Fair

Safe Caring


Popular Passionate




0%

10%

20%

30%

40%

50%

60%

70%

Product related

Values

Ethics related





Base: 2005

↓ families (52%)

↓ families (45%)

↓ families (33%)

↑ families (22%)

↓ families (40%)

↑ families (11%)

7

9

7

7

7

15

14

14

13

12

36

36

36

35

31

29

28

29

31

32

13

14

13

14

19

0% 20% 40% 60% 80% 100%

Food and drink

Travel and vacations

Utilities

Technology

Financial services

Not at all

Not very

Quite

Very

Extremely

Base: 2005


Being ‘good’ most influential

for financial services… How much does a company being ‘good’ influence your buying decisions when

purchasing products or services in the following categories?

14

14

10

12

10

26

24

23

18

14

35

35

38

33

35

18

19

22

25

28

7

8

7

13

12

0% 20% 40% 60% 80% 100%

Fashion

Petroleum

Entertainment & Leisure

Further education

Automotive

Not at all

Not very

Quite

Very

Extremely

Base: 2005


…but less influential for

petroleum and fashion How much does a company being ‘good’ influence your buying decisions when

purchasing products or services in the following categories?

Headlines: Relationship between

consumer and company

• Nearly half believe that the ‘good’ values and behaviour of a company they buy from reflect well on them (48%). Fewer

agree that the ‘bad’ values and behaviour of a company they

buy from reflect poorly on them (40%).

• Most people feel that companies have a role to play in the well-

being of communities and wider society (64%).

‘Good’ values reflect on

buyer more than the ‘bad’

7%

4%

9%

5%

44%

42%

26%

33%

14%

15%

0% 20% 40% 60% 80% 100%

The ‘bad’ values and

behaviour of a company I

buy from reflects poorly on

me

The ‘good’ values and

behaviour of a company I

buy from reflects well on me

Disagree strongly

Disagree slightly

Neither agree nor

disagree

Agree slightly

Agree strongly

Base: 2005


To what extent do you agree with the following statements?

↑ Young people (56%

of 18-34 yr olds)

↑ Families (53%)

31% 42% 22%

0% 20% 40% 60% 80% 100%

Companies should

adopt a role in the

well-being of

communities and

wider society

Disagree strongly

Disagree slightly

Neither agree nor

disagree

Agree slightly

Agree strongly

Base: 2005

Companies have a role to play in

the well-being of communities and

wider society


To what extent do you agree with the following statements?

↓ 18-24 yr olds (52%)

• Three fifths would trust ‘word of mouth’ to tell them about a

company’s good behaviour (61%), whereas only one in ten

would trust the company’s CSR reports (12%), 8% would trust

the company’s advertisements and 6% would trust packaging.

• Such lack of trust poses a significant challenge for companies

wishing to respond to the majority of people who want to

know more about a company’s good behaviour.

– Three quarters (74%) would be interested in knowing more

about the good behaviour of companies that they consider purchasing products or services from

Headlines: Sources of Trust

61%

37% 35% 34% 30%

27% 25%

0%

10%

20%

30%

40%

50%

60%

70%

Word of mouth Employees Review forums Third party

endorsement

from an expert in

the field

Comparison

websites

Newspapers Charities and

not-for-profit

organisations it

has been

involved with

What sources would you trust to tell you about a company's good behaviour?

Base: 2005

↑ Over-65s (45%)

↓ Families (32%)

↓ Families (20%)

Word of mouth highly

trusted…


↑ Women (65%)

↑ Men (37%)

↑ Older people (44% over 45) ↓ Families (27%)

…whilst company sources

are not aside from their employees

12% 8% 8% 7% 6% 6% 3% 3%

8%

-10%

0%

10%

20%

30%

40%

50%

60%

70% What sources would you trust to tell you about a company's good behaviour?

Base: 2005


↓ Families (9%)

Companies are little trusted… …but peer-to-peer and third party sources of information are

Word of mouth

Review forums

Facebook

Twitter

Endorsement from an

expert in the field

Comparison websites

Newspapers

Charities and NGOs it has

been involved with

Government Investors

Celebrities relevant in the

field

Employees

The company’s CSR

report

The company’s

advertisements

Packaging

0%

10%

20%

30%

40%

50%

60%

70%

Peer-to-peer

Third party

Company

Employees are the most

trustworthy means for a

company to

communicate its good

behaviour to consumers

What sources would you trust to tell you about a company's

good behaviour?

↑ AB social grade(42%)

↑ AB social grade(17%)

Most people want to know

more …with almost 1 in 5 ‘very interested’ in knowing more about a

company’s good behaviour

5%

21%

55%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Very interested

Quite interested

Not very interested

Not at all interested

Base: 2005

↑ Women

(77%)

How interested would you be in knowing more about the good behaviour of

companies that you consider purchasing products or service from?


Thank you Please contact:

Paul Flatters, CEO

[email protected]

www.trajectorypartnership.com

T:+44 (0)20 7902 1171

mailto:[email protected]

http://www.trajectorypartnership.com/

Good companies in the age of austerity paul flatters trajectory

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