If you haven’t read it already, I would recommend a look at the Harvard Business Review’s publication of Breakthrough Ideas for 2007. It’s a fascinating array of short essays covering insights and developments in business and science, ranging from unconscious decision making to user-centred innovation.

One of the essays is about the so-called ‘conflicted consumer’, UK consultant Karen Fraser’s description of a segment of people who are “apparently loyal customers who have ethical concerns about your company and are poised to switch as soon as a viable alternative emerges. In other words,” Fraser continues, “they buy your product but they’d rather not.”

The data for this was obtained in a UK survey of 1,300 consumers. According to the research, almost one-quarter of respondents said that they are currently buying goods or services from a company with an ethical reputation that they perceived as poor or very poor.

The implication is that conflicted consumers may abandon a brand as soon as a more ethical alternative becomes available. However, none of the articles I’ve seen on the conflicted consumer has actually mentioned what proportion of consumers say that they would actually do this switch if alternatives were available. As researchers in customer loyalty and disloyalty are well aware, staying or leaving behaviour is the result of many complex factors.

Loyalty despite a belief in a company’s lack of ethics is important if this leads to what is commonly called ‘cognitive dissonance’ (a simple but powerful social psychological concept developed by a man called Leon Festinger in the 1950s). Cognitive dissonance arises when our beliefs (e.g. perception of unethical business) and actual behaviour (e.g. continuing to be a customer) lead to a tension, which can be resolved only by either readjusting one’s beliefs or changing one’s behaviour. If an alternative business comes along that offers the possibility to switch, the conflicted consumer may just do it (Nike suffers from one of the worst ethical reputations, but no pun intended here!)

Unfortunately, the prediction of behaviour from beliefs and attitudes is difficult and has occupied the brains of many social and consumer psychologists over the last few decades. The Theory of Reasoned Behaviour, for example, considers beliefs, along with evaluations of those beliefs and subjective norms, all to be determinants of behavioural intentions, which may then cause actual behaviour. The reason why this is such an important theory is because consumption is perhaps a prime example of the gulf that sometimes lies between what we think we should do and what we actually will do (take healthy eating, for example).

Nonetheless, with rising awareness of ethical issues, and the more social norms and expectations change, the larger the segment of conflicted consumers will grow and the greater the dissonance experienced by existing consumers. It is inevitable that many will soon take advantage of the emerging, more ethical, product landscape.

According to coverage of the ‘conflicted consumer’ in World Business, the 10 companies with the worst ethical ratings include fast food chains (McDonald’s, Burger King), budget airlines (Ryanair, easyJet), financial service providers (Barclays Bank, American Express), along with Nike, Shell, BSkyB and Camelot. I’m sure many of them took Karen Fraser’s research to heart and are now engaged in ethical business research and the development of strategies to avoid the loss of customers.

The top 10 ethical business table is composed mainly of retailers (The Body Shop, M&S, Boots, The Coop, Sainsbury’s, Tesco, Waitrose), along with Kellogg’s, Google and the BBC.

It would be interesting to see the degree to which ethical reputation increasingly affects those companies’ ability to win new customers. As Karen Fraser (quoted in the World Business article) notes: “Mud sticks! It takes time to change a reputation. Companies should also know that throwing money at a campaign can be counterproductive if consumers don’t believe what you’re saying. And in an age of digital communications, companies do face increased scrutiny.” Consumers would rather trust others like themselves and share their feelings widely online.

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