great marketers in 2022 – know that esg is just another set of initials.

I will never cease to be amazed by the human pursuit of silver bullets. While the concept of a silver bullet is attractive, given the complexity of the world we live in, the quest for one is, at best naïve.

In the late 1950s, advertising was a silver bullet – the key to building a brand and driving sales. By the 1980s, the silver bullet was media relations – driving sales without the cost of media and with greater credibility. Then in the 1990′, we saw the advent of direct marketing – the new silver bullet that enabled message customisation. The early 2000s saw the advent of CRM – the use of databases to make direct marketing more effective. In the mid-2000s, websites became the silver bullet – the 21st-century pathway to driving sales. Then along came social media – the next silver bullet for addressing promotional needs cost-effectively. Then it was SEO that, for many, became marketing’s silver bullet – driving customers to your website using science mere mortals could never understand.

While this is not a complete history of the silver bullets in marketing and covers only a fraction of the silver bullets in business more generally – I hope this list highlights the fascination marketers and business people have with the quest for silver bullets. It certainly highlights the propensity of consultants and academics to develop silver bullets and then present them as the answer to all questions – when the fact is – these are all just tools that have merit but will never be the key to success for everyone. There are no silver bullets in marketing or in business, more generally. There are only tools that marketers and business people need to understand and apply appropriately. While they all have their place – none are silver bullets.

In the 1980’s businesspeople, marketers and academics concerned about values in business and the need for a more ethical approach to business highlighted and indeed promoted the marvels of TBL. TBL or the triple bottom line involved an approach to business that involved addressing and reporting against three criteria:

  • Environmental impact and contribution.
  • Economic impact and contribution. 
  • Social or community impact and contribution.

While some were of the view that this list should also include governance. Many viewed the TBL approach as a silver bullet in terms of businesses:

  • Behaving ethically.
  • Being seen to behave ethically.
  • Creating an ethical message to incorporate in marketing.

In the early 2000s, the new silver bullet was CSR. Corporate social responsibility became the focus for behaving ethically, being seen to behave ethically, and promoting an ethical positioning. A broader concept that TBL, CSR was all about businesses:

  • Behaving in a manner that is socially responsible.
  • Being seen to behave in a manner that is socially responsible.

More recently, we have seen the birth of the next silver bullet in terms of ethical behaviour – ESG. Like TBL and CSR before it, ESG is being touted as something new and a silver bullet. ESG, as you would be aware, stands for:

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ESG and reporting against ESG standards is viewed by many as a pathway to ethical business and, indeed, more socially responsible business. However, it is not a silver bullet and is, in effect, little different from TBL and CSR. ESG, CSR and TBL are all important, and all businesses stand to benefit from a set of policies and procedures that drive and facilitate reporting on them.

In terms of marketing, the key principle underlying TBL, CSR and ESG is values. A mountain of research demonstrates the link between a business’s values, culture, behaviour, and the values of the customers they serve. Positive outcomes and reporting for TBL, CSR, and ESG result from behaviour, which in turn is largely the outcome of culture, which is largely the outcome of values. Further, there is an increasing body of research demonstrating that performance is maximised when the values of an organisation match and are seen to match the values of the:

  • Staff and potential staff – who ultimately determine the culture.
  • Customers and potential customers – who buy the product.
  • Other stakeholders, including the government, impact business decisions.

Consider these statistics:

  • 86%of job seekers avoid companies with a bad reputation (values).
  • 88%of job seekers say that healthy workplace culture is vital for success.
  • 47%of active job seekers cite company culture as their driving reason for looking for work.
  • 71%of consumers prefer buying from businesses aligned with their values
  • 64% of consumers say that shared valuesare the main reason they trust a brand. 

The values of a business are of importance to most stakeholders, including staff, customers, government etc. It is the values of a business that are reflected in ESG policies and which should be reflected in:

  • Corporate behaviour and reporting.
  • Staff behaviour and the culture more generally.
  • Promotion and marketing more generally.

Central to addressing these issues cost-efficiently determining’ who the organisation is as a higher priority than ‘what the organisation is,’ and then using the former to inform the latter – and doing all of this with the customer front and centre. Note:

Customer-centric businesses are 60% more profitable than those that are not.

The critical issues in this regard are:

  • Understanding the values of stakeholders and customers.
  • Establishing corporate values that are consistent with those of stakeholders and customers.
  • Ensuring the staff have the capability and willingness to live the values.
  • Ensuring staff have the information and resources to live the culture.
  • Communicating the core values through behaviour and reporting.

Understanding the values of the d=stakeholders and customers requires getting as close as possible to these people, avoiding the application of intuition, and embracing market research. In my experience, few businesses in Australia use market research to examine the values of their audiences. Most either ignore the issue of values or make a guess. This is despite the critical importance of this issue, as demonstrated by the following finding:

  • 89%of shoppers stay loyal to brands that share their values.

In my experience, corporate values are most often set by the board and or management team based on intuition. Its values are to align with target audiences – those audiences should ideally be involved in the decision-making process. Businesses often guess what their values should be or what the target audiences want them to be. They then decide based on a closed discussion.

That said, values per-se’ are of little benefit. What an organisation believes or says it believes is of little consequence to consumers or any audience. What matters is behaviour and how the organisation’s values are reflected in its interactions with consumers and the community more broadly. It is the customer experience – the reflection of the organisation’s values that matters. Note:

  • 73%of consumers love a brand because of helpful customer service.
  • 73%of customers agree that customer experience helps to drive their buying decision
  • 86%of customers will pay more if it means getting a better customer experience.

The customer experience is or should be a reflection of the organisation’s values – as demonstrated by the staff. Having the right staff, ensuring they are engaged with the values, ensuring they have the skills and giving them the resources to live the values and reflect them in behaviour.

Along with behaviour (a reflection of the culture), annual reporting and promotion both play a part in communicating values. Behaviour is far and above the most important form of communication. It is also important to reflect the organisation’s values in reporting and promotion. In 2022, for example, all large Australian corporations must report each year on their efforts to reduce their impact on the environment and become carbon neutral – and consumers are becoming more engaged with and influence by this reporting. Note:

  • 56%of US consumers have changed brands due to perceived climate change policies.
  • 61%of Australian consumers have changed brands due to perceived climate change policies.
  • 66%of UK consumers have changed brands due to perceived climate change policies

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On the subject of climate change and the environment more broadly, there are growing concerns among consumers and other stakeholders that most TBL, CSR and ESG reporting activity relating to action to mitigate climate change is little more than greenwashing.

‘Greenwashing is the practice of marketing a company or organisation to appear more environmentally friendly or ecological (more natural, healthier, free of chemicals, recyclable, less wasteful of natural resources) when in practice its activities pollute the environment.’

In terms of ESG, TBL, and CSR, greenwashing is just one example of a lack of sincerity and authenticity on the part of the organisation. It involves an apparent dissonance between what the organisation professes to do and believes in and its perceived behaviour. A great example of this and the fallout it can cause was the dissonance between the values of Rio Tinto and its behaviour at Juukan Gorge in WA. Occurrences like this create doubt in the minds of audiences regarding all ESG policies and values. Note:

  • Globally, only 22%of people trust business leaders.
  • Globally, some 32%of consumers distrust business.

This goes to two critical components of any effective CSR, TBL or ESG policy:

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Values need to be sincerely held and authentically lived and communicated – with business first accepting that the audience’s inclination is more towards not trusting them than trusting them. It needs to be understood that only after a period of authentically living values – will the messaging of the business in this regard be fully embraced by target audiences.

GREAT MARKETERS

  • Great marketers in 2022 have stopped looking for silver bullets.
  • Great marketers in 2022 avoid jargon like TBL, CSR and ESG.
  • Great marketers in 2022 embrace, live and communicate values.  

RECOMMENDED READING

ANOTHER INSIGHT

ACTION

  • Don’t look for silver bullets and doubt anyone selling them. They don’t exist. 
  • Get close enough to the target audience to know what values it cares about. 
  • Customise the business’s values to sync with those of the audience.
  • Creates an environment in which the culture lives the values the audience values.
  • Drives sincerity and authenticity, never claiming values the business does not live.

QUESTIONS

  • Research demonstrates that businesses that align their values with customers’ values are significantly more profitable. What three values are most important to your customers?
  • Research demonstrates that businesses that communicate values that the staff do not live and reflect in their behaviour perform poorer. What values does your culture communicate?
  • Research demonstrates that culture is all about values. What values are communicated in the culture of your organisation, and how?
  • Research demonstrates that culture is all about values. What strategies do you have to ensure you have staff who can and will your values? 
  • How many of your staff know your organisation’s values, how they should be reflected in their day to day behaviour and what to do if they find this difficult. 
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Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

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