While many might suggest that the 1 for 1 Business Model may be the best way to rake in profits while giving back to society. One reason why it makes sense is that customers feel more motivated to contribute to something they connect with. Imagine for a moment, you walk into a store and try on different pairs of sunglasses. You note the rim style and frame colors while ensuring that all of it fits into your budget. After trying on at least 15 pairs, you finally choose one pair. Now, you’re at the billing counter when the customer service friend tells you that part of the final bill value will be:
- Used to give a pair of spectacles to children who cannot afford it.
- Used to contribute to the organization’s ongoing research to treat blindness
What would you choose?
We thought so too! It is human psyche 101. We feel more connected with situations that we find more natural to connect with over an abstract action. If an organization is extending to a customer the power to put a pair of spectacles on a poor child’s face, you have matched a giver with a recipient.
The organization is creating a win-win-win situation for the company, its customers, and the community! As a customer, you rely on social proof. Buying such a brand makes you come across as an ethical shopper while giving you a good feeling about it all. However, you would sometimes find yourself questioning the genuine impact that your contribution would have on the promised recipient.
The version of the 1 for 1 business model might be different for different brands.
– “If you buy this notebook, we will donate 10% that will pay for a child to receive a day of tutoring in a community center in India.”
– “If you buy this sustainable deodorant, we will plant a tree on your behalf.”
– “If you send this bottle for recycling, you will help us in removing one kilogram of trash from oceans.”
– “If you buy this, we will donate half of our profits to charity.”
It just depends on the type of customers that that company feels would meet their expectations in terms of customer loyalty and purchasing power.
If there is one brand that started this 1 for 1 Business Model, it was TOMS. The shoe brand gained so much traction for its impressive marketing and business strategy that it went on to trademark the term, “TOMS One for One”!
The brand was applauded by its loyal customers who further promoted the product with a great word of mouth marketing. TOMS’s customers also gave the brand a win and helped them establish itself as a socially conscious brand. Here’s an example – A social equity venture fund awarded Toms Shoes a prize for having an innovative enterprise solution to poverty. The brand’s answer to poverty lies in their version of a one-for-one business model. For a pair of shoes that a customer buys, TOMS gives away a free pair to someone who needs shoes.
It is not just TOMS; other businesses are at it too.
- Warby Parker sells and distributes eyeglasses;
- Everlane donates profits from exclusive sales and clothing collections to charitable causes, such as human rights champions, the ACLU and Equality Now;
- Etsy’s commitment to the environment includes its innovative program – Etsy Solar, which helps shrink the overall carbon footprint of the marketplace;
- For every nutritional bar it sells, Nouri Bar donates a meal to a hungry child;
- The Build-A-Bear Associate Volunteer Program also encourages associates to give back locally by offering paid time off for participation in community acts of kindness;
- Roma Boots sells and gives away boots;
While critics argue the effectiveness of a 1 for 1 model by suggesting that one cannot eradicate social evils by providing freebies, there exists a lot of oversimplification in this regard. One must applaud how companies are finally treating social impact as part of their corporate social responsibility and not just as an add-on.
The real power lies in the hands of customers like you, which decide whether the company’s purpose stems from a place of authenticity or not.
To help you determine the purpose of a brand’s social cred, here’s a thought we leave you with – poor people aren’t poor because they lack stuff; they’re poor because they lack the infrastructure to create wealth.
Would you be willing to pay a premium on the product if you were aware of your contribution to the community? What factors would influence your decisions? Tell us in the comments below!
Picture Credits: Official Facebook pages
TOMS : https://www.toms.com/
Warby Parker: https://www.warbyparker.com/
Nouri Bar: https://www.facebook.com/NouriBar/
Build – A Bear : https://www.buildabear.com/
Roma Boots: https://romaboots.com/