Consumers Willing to Pay Extra for Products & Services from Socially-Responsible Companies: Study

“Knowing what causes are most important to the socially-conscious consumer may help brands prioritize their social investments,”-Nic Covey, vice president of Nielsen Cares, Nielsen’s global corporate social responsibility program

NEW YORK: 63 % of global, socially-conscious consumers are under age 40, consult social media when making purchase decisions and are most concerned about environmental, educational and hunger causes, according to a new study from Nielsen, a leading global provider of information and insights into what consumers watch and buy.

Around the world, companies have invested time, talent and treasure in social and  environmental efforts for a range of complementary reasons. For many companies, cause marketing –  the use of social and environmental efforts to build a brand and increase profits – has been a secondary if not primary motivation.

Nielsen’s Global Corporate Citizenship Survey of more than 28,000 Internet respondents in 56 countries shows that 46 percent of global consumers are willing to pay extra for products and services from companies that have implemented programs to give back to society.  Nielsen defines these consumers as socially-conscious consumers.

“It’s clear that corporate social responsibility efforts resonate with a specific group of consumers,” said Nic Covey, vice president of Nielsen Cares, Nielsen’s global corporate social responsibility program. “Marketers need to know who those consumers are in order to maximize the social and business return of their cause marketing efforts. This understanding allows brands to engage in social impact efforts that appeal to the right consumers with the right causes and through the right channels.”

Global, Socially-Conscious Consumers by Age
Nielsen’s survey shows that overall, younger consumers are more willing to spend extra for products and services from socially-responsible companies. Fifty one percent of all respondents aged 15 to 39 are willing to pay extra for such products and services compared to 37 percent of respondents over age 40.  Looking at socially-conscious consumers specifically, Nielsen’s findings show that 63 percent are under the age of 40.

Global, Socially-Conscious Consumers by Geography
Consumers in Asia Pacific (55%), the Middle East and Africa (53%) and Latin America (49%) are more willing to pay extra for products and services from socially-responsible companies than consumers in North America (35%) and Europe (32%). According to Nielsen’s survey, the highest concentration of socially-conscious consumers is in the Philippines, where 68 percent of respondents are willing to pay extra for products, while the lowest concentration is in the Netherlands, where 21 percent of respondents indicated a willingness to spend more.

Causes Most Important to the Global Socially-Conscious Consumer
Among 18 causes reviewed, Nielsen finds that socially-conscious respondents prioritize environmental sustainability (66%), improvements to science, technology, engineering and math education (56%) and the eradication of extreme poverty and hunger (53%) for companies implementing programs.

“Knowing what causes are most important to the socially-conscious consumer may help brands prioritize their social investments,” said Covey. “The next step is to understand precisely what causes are important to a brand’s individual customers.”

Reaching the Global, Socially-Conscious Consumer
According to Nielsen’s survey, when it comes to brands and advertising, global, socially-conscious consumers trust recommendations from people they know (95%) and look for opinions and information posted by other consumers online (76%). Socially-conscious consumers are more likely than other survey respondents to use social media to help make purchase decisions (59% vs. 46% of all respondents).

“In order for cause marketing efforts to affect sales, customers must first be aware of a company’s efforts,” said Covey.  “Nielsen’s information indicates that social media is a critical tool for effective cause marketing.”

Nielsen Global Survey
The Nielsen Global Survey of Corporate Citizenship was conducted between August 31 and September 16, 2011 and polled more than 28,000 online consumers in 56 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America.

The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey was established in 2005.

Nielsen Holdings N.V.  is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands.