Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Monday, July 19, 2010

Social Strategies: Generosity

"When Gneezy told customers that half of the $12.95 price tag would go to charity, only 0.57% riders bought a photo – a pathetic increase over the standard price plan. This is akin to the practices of “corporate social responsibility” that many companies practice, where they try to demonstrate a sense of social consciousness. But financially, this approach had minimal benefits. It led to more sales, but once you take away the amount given to charity, the sound of hollow coffers came ringing out. You see the same thing on eBay. If people say that 10% of their earnings go to charity, their items only sell for around 2% more.

But when customers could pay what they wanted in the knowledge that half of that would go to charity, sales and profits went through the roof. Around 4.5% of the customers asked for a photo (up 9 times from the standard price plan), and on average, each one paid $5.33 for the privilege. Even after taking away the charitable donations, that still left Gneezy with a decent profit."

Link. Point: 21st century business models are more radical than most of us ever imagine.

Yes, it's easy to think of ways to nitpick at this study. But it's equally easy to point out that yesterday's lame, toxic, brain-dead business models are causing titans to tumble.

So perhaps the future of business isn't what we often think it might be.

-- umair // 3:09 PM // 1 comments


This certainly gives me something to think about in terms of the best way to build a socially conscious business.
// Blogger Drew Meyers // 7:02 PM

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