During the holiday season, Americans embrace the spirit of giving. That spirit is reflected not just in a consumer spending surge as people buy presents for loved ones, but also in an increased likelihood to make charitable donations to causes they believe in. Holiday sales represent about 20% of annual retail sales in most industries -- but nearly one-third of annual charitable giving in the U.S. occurs in December. For many Americans, the idea of using their consumer dollars to support companies that are having a positive social impact may be particularly appealing.
The recent Bentley-Gallup Force for Good study found that most Americans are willing to pay a premium for products from companies that have a reputation for doing good. Specifically, majorities of at least 60% said they would be willing to pay extra for a simple consumer good -- a T-shirt -- if the company that made it was known for making a positive difference in four specific areas.
These findings are all the more noteworthy given that the survey was conducted at a time of high inflation when many Americans were likely particularly price-sensitive.
Younger Americans, Women Most Likely to Say They Would Pay Extra
Most Americans across age groups said they would pay extra if the company was known for making a positive impact on 1) the environment or 2) its local community. However, younger adults -- a key target market for many companies -- were particularly likely to respond this way, at 79% and 82%, respectively. Women were also more likely than men to say they would pay extra for products made by companies that had a positive impact on the environment and on the local community.
How Much Extra Would Americans Pay?
When people were asked how much they would typically pay for a plain T-shirt, with no additional information or explanation, the median response was $10. They were then asked how much more they would pay if the company was known for each type of positive behavior. People were willing to pay the highest premium -- $7.00 -- for a T-shirt made by companies known to have a positive environmental impact, meaning the total cost would be $17. Having a positive impact on the local community was worth $6 to consumers, while people were willing to pay an extra $5 if the company was known to treat its employees well or contribute to charities.
Implications
The Bentley-Gallup “T-shirt experiment” shows that, at least in theory, Americans will pay more for a product from a company known to do good things -- an important consideration for companies as consumers decide where to spend their holiday dollars. The results demonstrate that businesses’ financial goals and commitment to making a positive impact can be complementary rather than competing priorities. Americans themselves agree with this idea; in the same study, about seven in 10 said businesses that prioritize making a positive impact on society are just as profitable (47%) or more profitable (22%) than their competitors.
Read more about the findings from the Bentley-Gallup Force for Good Survey.
