subject: Pricing and Social Consciousness [print this page] Pricing and Social Consciousness Pricing and Social Consciousness
Dr. Alice Vlietstra posed the following question. "Socially conscious businesses focus on a triple bottom line, people, planet, and profit. Mega studies are now showing that socially conscious business do better financially in the long run than do those that focus on profit alone. The title of your book speaks primarily to profit. How does your work fit in with these broader social concerns?"
Alice that's a great question. Thank you for posing it. Let's look at each - people, planet and profit.
People
Unfortunately titles don't provide enough real estate to convey the entire message. My mission is twofold - to help sellers get compensated fairly for the value they provide (most are woefully under compensated) and to help buyers make informed decisions.
Buyers are left in a lurch when marketing claims and pricing don't jibe. When a company touts its offerings as superior to its competitors, then offers prices at or below industry average, buyers get confused. That confusion often results in poor buying decisions.
By aligning the pricing and the branding/marketing messages, the seller gets compensated well, buyers make better decisions and resources get allocated efficiently.
Planet
The effective allocation of resources described above is one way that companies can help the planet. When we blend branding, marketing and pricing effectively, we're only serving those who really value what we have to offer. We're not attracting buyers who will ultimately discard the products we provide adding to the already overwhelming waste disposal problem.
Even services require energy consumption in forms of gasoline and oil in our cars and utility costs, not to mention the paper resources used in this electronic' age. When we limit our services to those who are willing pay a premium price to get what we offer, we save those resources as well.
It's been my experience that the studies are correct, socially-conscious businesses typically fare better financially than those that aren't. Indeed in my book, The Uniqueness Myth and other misconceptions that derail businesses, chapter 10 is devoted to showing businesses how they invite regulation and how to avoid it. Why? Because the costs of compliance and remediation are always greater than the cost of a socially-conscious approach.
Unfortunately many of the brown' costs we experience today, around the world, result from government subsidies that either discourage innovation or make innovative products uneconomical. Electric car technology has been around for centuries. The first recorded attempts occurred in Scotland in the 1830s, here in the U.S. around 1913, yet gas and oil subsidies have made this technology unattractive until now.
Similarly, farm subsidies are provided to grow products like tobacco that are later taxed heavily to dissuade its use, not to mention the cost of government ads that run periodically to deter tobacco use. If we want more companies to operate green', we need to stop these senseless subsidies.
Profit
The profits companies generate fuel innovation and, consequently, economic growth. That means more jobs, higher standards of living and more effective use of resources. Absent those profits companies and the individuals who work for them will continuously struggle in survival mode. Imagine the fear, uncertainty and economic pain of the past two years continuing for decades on end. It's the kind of environment that's triggering the call for Hosni Mubarak's resignation as Egypt's President.
Alice, I firmly believe that profits gained at the expense of others and the planet are not sustainable. So while the title of my book, Pricing for Profit, focuses on pricing, it's certainly not the whole story.
