Companies continue to promote their talent practices as a competitive differentiator not just to recruit talent, but to recruit customers as well. American Express recently pushed the frontier on this by announcing the changes to their family leave, adoption and fertility benefits, while Lyft has launched an aggressive ad campaign arguing that riders should pick Lyft over Uber because of how they treat their drivers (hint: you get to tip them). New research from Pew provides some insight into whether or not this strategy works:
Around half of Americans say the question of working conditions is indeed important to them, though fewer are actually willing to pay more to support businesses that are seen as worker-friendly, according to a Pew Research Center survey conducted in late 2015.
A little more than half (53%) of U.S. adults say that when deciding whether to use a particular service or shop at a particular store, it’s important for them to know something about the pay and working conditions of those who work there. But only a slightly smaller share (46%) say that worker treatment is not important to their purchasing decisions. … Only around one-quarter (28%) report that they often pay extra to support these types of businesses.
While the framing of this study is negative, Pew’s headline that customers don’t generally respond to how companies treat their employees misreads the tea leaves from their data. In fact, companies pursuing HR as PR strategies should take these results as evidence that the strategy should work. Think about this for a second: More than one out of every four customers is willing to pay more money to a company that values its employees. What other strategies can a company pursue that can get 28 percent of their customers to accept a price increase?
Furthermore, even if you are not able to get a price increase, you are still able to differentiate from your competition more than half of the time by talking with your customers about how you treat your employees. Again, what other marketing strategies are able to differentiate you from your competitors more than 50 percent of the time?
There is another piece of data in here that is interesting: Only 23 percent of customers say that it is easy to get accurate data about how their customers treat their employees. In light of the potential market upside and this information gap, expect to see more HR-as-PR strategies going forward.