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Friday, January 9, 2009

Ethical By Association

Does who we hang out with rub off on our image and should we take that into account as a customer criteria ?

I saw a TV ad recently for a heater called the HeatSurge . The ad featured that the heaters are Amish built. A bit more research established that the Amish make the fireplace surround, not the heater itself. But the vendor of the product clearly finds the Amish part of the story compelling enough to make it their prime USP. I guess the theory is that the Amish are good and trustworthy and focus on the basics of life, so this product that they are involved in making must meet the same criteria. Ethical by association.

But this works in reverse too. In this case have the Amish chosen their customer well and are they doing their own image any favors by association? In this discussion on Yahoo Answers a questioner asks about the HeatSurge heater unit itself. After a very comprehensive response, the questioner comments “I always thought Amish was God fearing people. It looks like they will scam you just like the News Papers and the Internet.”

Whether or not the questioner’s interpretation is correct, I doubt that the Amish are responsible for the overall sales message about the efficiency of the machine – they are only the supplier of the fireplace surround. But they have clearly been deemed guilty by association.

Coincidentally I heard an item on NPR a couple of weeks back about a mortgage loan officer in Amish country. “In this year of financial crisis, of storied old banks collapsing in hours, Hometowne Heritage has had its best year ever”. The bank had not suffered at all in the credit crunch because Amish culture sees defaulting on a loan as shameful so they only take out loans that they are confident they can pay back. A great example of the business benefits of bringing sustainability concepts into choosing your customers as well as your vendors!

These themes are relevant to large corporations as well. Stakeholders do judge companies partly by who we associate ourselves with. This can be an opportunity as well as a risk. And it applies not only to the suppliers we select, but to our customer relationships too. The idea of including sustainability credentials as a criteria in customer segmentation might be a bit exotic, especially in the current economic environment, but it can be a tool for driving sustainability improvement just like supplier criteria can be. It can also bring direct business benefit like the mortgage loan example illustrates and, who we hang out with does rub off on our image.

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