Are you ready for the new wave of conscious consumers?

Business leaders and marketers would have to have their head firmly in the sand not to see that today’s consumers are increasingly voting with their wallets, and choosing where possible to support brands operating with a higher purpose.

But aside from just doing the right thing, it’s good to know that for the number-cruncher’s out there, doing conscious business is not just good for the planet, but also great for shareholder returns.

A message from our CEO

If you haven’t yet read John Mackey and Raj Sisodia’s seminal book “Conscious Capitalism”, or are unaware of the conscious business movement I can’t recommend you get your hands on a copy fast enough, as this movement is here, it’s real and it’s quite frankly well overdue.

Short of sitting down with you and reading it aloud to you cover to cover, I have selected what I believe are the key points summarising the business case for conscious business and offer them here in a précis of sorts. I hope it strikes a chord with you just as it has done for so many others.

Steve Bambury, CEO, Espire Media
Conscious businesses outperformed the S&P 500 by 14x - Raj Sisodia
The business case for operating a conscious business
Abstracts and precis from ``Conscious Capitalism`` by Raj Sisodia and John Mackey

For far too long now business has put profit at the heart of its measurement of success and, in many cases, made this the single determinant of a company’s success. Although this is an important aspect for the longevity and sustainability of a commercial enterprise it is not the only one, and there are many other factors that determine overall “success”.

Businesses need to consider a wider range of criteria rather than purely financial performance and a business that operates with a higher level of consciousness will consider other aspects of wealth creation including intellectual, social, emotional, cultural, physical, spiritual and environmental.

Companies that operate with these broader elements in mind recognise that whilst financial performance is important, it is not the be all and end all of success, and that there does not need to be a “sacrifice” but rather a balance that considers these other aspects and acts accordingly.

Although not surprising to those that truly understand this approach, it is fascinating to others that those companies that operate with this broader mandate have proven to significantly outperform traditionally operating businesses from a financial perspective.

Espire Media marketing
The logic of superior financial performance

The two aspects of financial performance are based on the company’s ability to grow revenues and reduce costs through increased efficiency. Consciously operating businesses excel on both fronts.

They grow faster than their competitors by aligning better with the needs of their customers who grow to become ‘raving fans’ who continue to spread the word. As a result they typically spend less on promotional activities and also grow market share. At the same time they invest into areas that have a big impact on productivity and both staff and customer retention (such as team happiness and the customer experience) and this creates significantly lower costs on things like staff recruitment.

Direct evidence of superior financial performance

In his book ‘Firms of Endearment – How World-Class Companies Profit from Purpose and Passion Raj Sisodia selected companies based on what they called humanistic profiles rather than purely financial performance. They considered companies that created value to all stakeholders – including customers, employees, suppliers, investors, society and the environment – and success was determined by factors such as how well-loved they were by team members, customers, suppliers and communities; their culture and their leadership.

Eighteen publicly listed and ten privately held companies were selected and their financial performance was compared with both the S&P 500 and Jim Collins’ ‘Good to Great’ Companies (that analyses eleven companies that went from average to over performance over an extended period of time). Over a period of 15 years the “firms of endearment” that are featured in the book outperformed the S&P 500 by over 14 times, and Good to Great companies by over 6 times as can be seen in this table:

Cumulative Performance 15 years % 10 years % 5 years % 3 years %
US Firms of Endearment 1681 410 151 83
International FoE 1180 512 154 47
Good to Great companies 263 176 158 222
S&P 500 118 107 61 57

Source: Raj Sisodia

Explaining superior financial performance

Consciously operating businesses achieve their superior performance by:

  1. Generating high sales revenues by creating higher value for their customers.
  2. Achieving higher net margins than their counterparts, despite willingly sacrificing gross margins through investment into areas such as their people and environment.
Here's how it works
  • Higher sales are achieved based on greater acceptance by customers who in turn become ardent fans and advocates. These companies consistently outperform industry averages on metrics such as revenue per team member thus generating more revenue on a comparable asset base than their competitors. As such they can afford to pay better wages and create a virtuous cycle of well-paid team members with a true passion for their work and for serving customers that in-turn creates a superior customer experience. Their people are more productive, consistently creating excellence with greater innovation and love for what they do that clearly becomes contagious all round.
  • Lower marketing costs are possible thanks to a large number of ‘raving fans’, delighted customers and staff who love their work. Customer retention is high as is word of mouth advertising from the many loyal and passionate advocates for the company. Many conscious businesses spend as little as 10 to 25% of the industry average on marketing with huge cost savings on traditional marketing strategies.
  • Staff happiness + higher engagement = lower staff turnover. This equation says it all as most people will be familiar with the high cost of recruitment and training for new employees. When a company takes care to hire those with passion that aligns with the company purpose and truly values its people they simply stay longer, love their work and are more productive. The significant savings that this creates are then re-invested into their people providing benefits that in turn enhance loyalty, passion and longevity.
  • Lower administration costs are achieved through higher staff engagement, less bureaucracy and greater trust between all stakeholders. As a result traditional cost centres such as legal and health care are also greatly reduced.
Many conscious businesses spend 10 to 25% of the industry average on marketing
What is a conscious content marketing agency?
At Espire Media we believe that authenticity, purpose and connection are at the heart of effective customer engagement.
  • Conscious marketing is about building something so fundamentally good into the heart of your business, products and services that all stakeholders (customers, suppliers, staff and the community) want to join your tribe and spread the word.
  • It is about taking a deep dive into your business to understand your purpose – why your business exists (beyond profits) and the difference you seek to make in the world – it starts with “Why?”.
  • This then forms the heart of your content marketing strategy and also gives your business a real sense of purpose for all stakeholders, including staff.
  • We execute the strategy through informative and engaging content and storytelling that attracts and engages a community of people who care about the very things you stand for.
  • This level of conscious engagement will accelerate your growth beyond traditional (and often outdated) marketing methodologies allowing your organization to make a bigger impact.