How Patagonia Uses The Noble Edge Effect To Scale

Are you treating your Corporate Social Responsibility (CSR) as just another boring legal task? If so, you're missing out on a massive opportunity to turn it into your most powerful marketing funnel.

CSR initiatives that are done right can help improve the consumer's perception of your brand, leading to more trust from your customers that translates to more repeat business.

This psychology principle is called the noble edge effect.

Basically, brands that show they care about social responsibility earn goodwill from their potential customers and see an increase in revenue as a result.

Patagonia is a great example of this in action. The outdoor clothing company, worth around $3 billion, has always prioritized the environment over growth.

Since 1985, they've donated 1% of their sales to environmental causes, awarded over $100 million to grassroots groups, and recently announced that all of their profits will go towards saving the planet (a whopping $100 million per year). And here's the thing: their dedication to saving the environment has actually helped them sell more. It's the noble edge effect at work.

And here are the 2 dead-simple reasons it worked for Patagonia:

1. The halo effect - it's when one trait of a brand is used to make an overall judgment about it. In this case, Patagonia's socially conscious and ethical approach, make buyers think positively about the brand and even feel proud to own its items.

2. The perception of self-interest - people are a lot less likely to buy into the social movement and the generosity of the brand if they think it's all out of self-interest. With Patagonia, especially with its current actions, that was never a doubt.

How does the Nobel Edge Effect Work?

The Noble Edge Effect is a concept that psychologists have been studying in relation to its impact on businesses and corporations. It is related to the halo effect, which is a cognitive bias that causes people to associate positive traits with others who possess them.

Sean Blair and Alexander Chernev conducted research on this topic by having participants in a wine tasting rate the wine. They found that those who were told that the company producing the wine donated a portion of its profits to charity rated the wine higher compared to those who were not told this information.

How You Can Use The Noble Edge Effect?

Before you think of the Noble Edge Effect as a good marketing strategy you can use to rake in more sales, here are some cautions you should know.

Here’s the catch:

Your consumers shouldn’t perceive your noble cause as profit-motivated.

While many companies are adopting environmental and socially-responsible practices, for over 45 years, Patagonia has been an industry leader in sustainable practices, environmental activism, and advocacy for public lands protection.

The company’s philosophy has long been to, “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” The company's initiatives, campaigns, and products all align with its core values, which has helped to win the favor of many people over the years.

Here are three lessons on taking a stand that you can take from Patagonia to make sure your CSR does indeed have the noble effect and doesn’t fall flat or backfire.

#1: Importance of shared morals

Patagonia's commitment to sustainability and social responsibility likely resonates with many of its customers, who may value these issues and appreciate the company's efforts to align with their own values.

The Noble Edge Effect is stronger for consumers who share similar moral values. Make sure you tap into and align with their societal aspirations to super-charge your products.

Focus your efforts on the consumers that care a lot about social goodwill, and you might see a 53% increase in perceived product performance.

#2: Consumer Expertise

Socially responsible behavior has a greater impact on people who are not well-versed in a particular market or product line, particularly when their experience with it is somewhat uncertain, such as in the case of banking, insurance, or utilities.

However, when consumers have a high level of expertise, the impact of social responsibility on their perception of product performance is minimal.

On the other hand, when consumers have a low level of expertise, mentioning socially responsible activities, such as a charitable donation, can significantly increase their perception of product performance by as much as 35%.

Patagonia's focus on corporate social responsibility and sustainability may be more influential for customers who are less familiar with the outdoor clothing and gear market, as they may be more likely to consider these factors when evaluating the company and its products. Customers who have a high level of expertise in the market may place less emphasis on CSR efforts and focus more on product performance and quality.

#3: Genuine Efforts

Your efforts need to be genuine- long term initiatives, not one off campaigns. When participants viewed the company's actions are seen as self-serving, it lead to a 10% decrease in perceived product performance.

But when it seems genuine, it can increase perceived product performance by 22%.

Patagonia prioritises sustainability and environmental responsibility above profits, and they do this through various on-going initiatives:

• Patagonia emphasises the sale of durable products that have a long lifespan or can be recycled.

• They promote conscious consumption through its marketing efforts, encouraging people to think carefully before making additional purchases.

• Patagonia's Worn Wear program also encourages consumers to repair damaged items instead of buying new ones.

• The company also prioritises ethical sourcing of materials, including organic cotton and responsibly-sourced down, and transparency in its supply chains.

• Patagonia directs 1% of all sales towards protecting and restoring the natural environment through the 1% for the Planet program and has donated over $140 million to businesses, individuals, and environmental groups.

Their initiates show their long vested commitment to the cause instead of a short lived campaign or promotion.

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