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Companies donate billions of dollars every year, hoping their generosity will not only help important causes but also attract socially conscious consumers to their brands.
What companies might not realize is that people focus less on the total amount a company donates than whether the donation seems like a sizable portion of the firm’s earnings. In fact, consumers favour brands that seem to be giving a larger cut of their profits, even if the total dollar amount is lower compared to brands that give a smaller proportion of profits but larger total dollar amounts to charity.
Consumers prefer brands that seem to be giving a larger cut of their profits, even if the total dollar amount is lower compared to brands that give a smaller proportion of profits but larger total dollar amounts to charity
People focus less on the total amount a company donates than whether the donation seems like a sizable portion of the firm's earnings.
People's perception is that brands that sacrifice relatively more of their earnings seem more generous. There's some good will associated with that type of generosity and therefore, people are more likely to prefer those brands.
The findings come as many companies-reassured by a growing economy-rethink their philanthropic efforts.
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