Consumers Know: Where They Spend Their Money Matters

With many people calling for a boycott of BP for its lack of effective action in last month’s oil spill disaster, it is clear that consumers understand that where they spend their money matters.  Whether boycotts are effective or not is not the question…a lot of times, it’s the attention such efforts receive, which leads to negative PR and diminishing of brand equity for a company that may be one of the more effective consumer advocacy tools for corporate social responsibility.  (See Toyota, for example).

A few weeks ago, I wrote an article about CREDO Mobile, which, after having achieved price and service parity with other cell phone services, has become a no-brainer choice for those of us who value social justice, environmental responsibility, and transparent CSR efforts.  Supporting companies like CREDO is sort of the “anti-boycott.”  And personally, I love the concept of the carrot a little better than the stick, though I think both are effective in their own ways.

The bottom line, though, is that where you spend your money really does matter. 

CarrotMob is a positive consumer action organization, describing itself as a “network of consumers who buy products in order to reward businesses who are making the most socially responsible decisions.”  While CarrotMob somewhat predictably started in San Francisco, its global reach is now firmly in place, with a recent CarrotMob event in Argentina making headlines on CNN.

And there are others.  In September, I profiled an organization called Green & Tonic, which promotes sustainability initiatives at bars by planning bar crawls among its followers to all the zero-waste and other environmentally committed bars in a certain area.

And while consumer action can be a powerful force for good, corporate purchases can also be used for good, in addition to making business sense.  I run a meetup.com group called the Bay Area Green Business Meetup Group.  We meet regularly to discuss topics of importance, mostly to small business owners, regarding sustainability.  In a recent meeting, someone mentioned that they use CREDO Mobile as a business phone, as they were trying to become as socially responsible as possible with all their corporate spending.  Another member chimed in and said that CREDO was, in fact, owned by the bank MBNA, which gives a great deal of money to Republicans in addition to spending a lot of money lobbying against consumer fraud protections.  The group was a bit disgusted.

Turns out, it’s not true.  CREDO is independent, but has a credit card run through the credit processing services of MBNA.  With each purchase on this credit card, CREDO members automatically donate 10 cents to worthy non-profits, including the Sierra Club, Planned Parenthood International, and Oceana, which is currently embroiled in the campaign against BP mentioned above.  But the perception that CREDO was owned by MBNA was enough to make this green business person not only believe it herself, but be sure enough about it that she would put it out to a group of 20+ green business people that they shouldn’t necessarily be spending their money with CREDO.  For CREDO, this perception is simply a by-product of one poor decision–to use MBNA instead of a more politically neutral or progressive bank.

The lesson for businesses is clear.  Where you spend your money matters.

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Scott Cooney is author of Build a Green Small Business (McGraw-Hill), and principal of GreenBusinessOwner.com, an executive strategy firm for small business owners trying to utilize sustainability as a guiding principle.

Scott Cooney, Principal of GreenBusinessOwner.com and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector.In June 2010, Scott launched GreenBusinessOwner.com, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.

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