Being Ethical Is Good Marketing – and More
Posted by advantagemarketing on January 28, 2014
Companies that live and breathe good business ethics experience several benefits, according to research reported in Consultants News (11/05/13). Such benefits include
- Goodwill and a strong reputation among customers
- Reduced risks and costs
- Expanded access to capital
- International respect
- Improved recruitment leading to lower retention costs.
The most significant benefit might be better financial performance, especially over the longer term. The World’s Most Ethical Companies report reveals that the most responsible S&P 500 companies out-perform those regarded as less responsible.
The UK’s Institute of Business Ethics found that companies with a defined commitment to doing business ethically had profit/turnover ratios 18% higher than those without a similar commitment. The Institute also reported “a direct association” between companies that train their staff in business ethics and their financial performance, as compared to those that simply disclosed ethical values.
Investors also seek companies that are committed to acting ethically. So-called socially responsible investing in the United States has expanded by 486% since 1995, while the remainder of U.S. assets grew by only 376%. Companies that fail to incorporate ethics may face penalties and a damaged reputation, the impact of which can be severe and unexpected when unethical behavior occurs.
The bottom line? Ethics shouldn’t be something you last pondered in a college course. Your company should have an ethics strategy and offer training that guides behavior and actions. Committing to acting ethically is some of the best marketing your company can do.