The Teapot Story: Giving Money Away Draws Customers, Boosts Sales

By on August 19, 2009 in Success

 Nearly every day I excitedly read another report or article citing the benefits—many of them financial—of corporate social responsibility and socially driven business.  I smile and compile and try to digest these percents and survey populations and geographic-specific findings. IBM and OgilvyEarth harvest invaluable information* that shapes thought and work for many of us.  Putting aside reports for the next several paragraphs, I’d like to share a simple anecdote that illustrates the power of connecting cause with business.

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Clam Lorenz, co-founder of MissionFish, the nonprofit that administers ebay Giving Works, relayed this story at the Online Giving Marketplaces Conference. I heard it via Stanford’s Social Innovation Conversations.

ebay brought together a group of sellers to solicit feedback and promote sharing. One seller (I’ll call her Lucy) complained that she was selling 30% fewer teapots than her competitor, despite comparable pricing and ratings.  The only noticeable differentiator was that her competitor donated 10% of all sales to a nonprofit in which she was personally involved.  It was posited that her act of donating and commitment to a specific nonprofit provided a competitive advantage: buyers were drawn to the option that allowed them to do good just through the act of their purchase.  So Lucy chose a nonprofit to support through donating 10% of sales and increased her sales by 30%—leveling Lucy with her competitor.

While neither teapot seller’s 10% donation is particularly generous or creative, it’s a clear allure for customers.  Associating your business with social or environmental responsibility (even the dullest form of it) creates stickiness with customers, is an asset to nonprofits and a (30%) boon for these teapot sellers.

*As referenced, IBM and OgilvyEarth’s latest findings:

IBM’s recent study finds 66% of 224 business leaders surveyed are actively focusing on CSR as a way to increase revenue and reduce costs.

OgilvyEarth surveyed 2,100 British consumers and found that:

  • 40% of consumers are more concerned with environmental and social issues now than they were pre-recession; and
  • 29% of consumers pay more attention to a product’s environmental and social credentials now than they did 12 months ago.

Photo credit House To Home

About olivia

Olivia Kuhn-Lloyd believes in the reach of business to effect real social change. She works with companies who are forging a new paradigm of cause capitalism and writes about the power of consumer choice at Cause+Capitalism. She managed international trade advocacy with the U.S. Chamber of Commerce in Washington, D.C., working with both foreign ambassadors and national business owners to tell their stories. She left the Chamber to spend a year in the Marshall Islands as a volunteer teacher and journalist. When she returned to the States, she worked with nonprofits and grantmakers in Los Angeles on program development, capital campaigns and executive coaching. Olivia now works with businesses to integrate social cause at a fundamental level and build community around the product or service. She lives in Santa Monica, CA.
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One Response to The Teapot Story: Giving Money Away Draws Customers, Boosts Sales

  1. DeandreA August 20, 2009 at 12:07 am #

    Well, you have a point in there. I also love to shop, but because of recession I stay into my budget list and try to save more. It is true that many people/consumers like to buy products that promises donation to nonprofit organization, like shelter for elders, orphanage, rehabilitation and other social-concern institutions. Recently, while walking home I accidentally notice a small board where it says,