When I first discovered social entrepreneurship – or, more accurately, social entrepreneurship came for me – in August 2011, the first three introduced to me were Bayani Brew, Theo & Philo Chocolates, and Human Nature (I’d been given Human Nature three Christmases prior, but had no idea they were a social enterprise until then). They all had such good products that, every time I went to the GK Enchanted Farm in 2012 for weekend work, I’d buy their stuff there. Even now, I’m still a Human Nature dealer, with more than half of my bathroom being powered by their products; we now carry Theo & Philo here at the Roots Collective, and I buy around two bars a week.
It’s just not me, either: All three of these enterprises have experienced much growth in the decade since, fueled by massive sales. That this could happen means that the enterprises have successfully tapped into their target markets, and that the latter have deemed the products worth it, purchased them – and kept coming back for more.
Sounds familiar? I have just described how a start-up becomes a scale-up. And if it sounds identical to a “traditional” MSME, that’s because it is: For social enterprises to grow and achieve the impact they want to achieve, they need their business to grow. And that means doing the sales and marketing properly – among others. Yes, on top of their social impacts.
Here’s where it gets a bit tricky – and where some social enterprises have fallen into the trap (us included): the concept of charity marketing or pity marketing.
What is charity or pity marketing?
Based on my experiences, I define pity marketing as “the use of one’s advocacy and/or beneficiaries to justify substandard quality, price mismatch, or other product or service attributes that do not adequately respond to market or consumer behavior.” Simply put, you use your mission to sell something that is not really sellable for whatever reason.
Social enterprises may inadvertently or intentionally employ this when offering community-made products that are low in quality of craftsmanship or taste, for instance, and chalk it up to being “made by a marginalized community in XXX, so please understand and support so they can earn more”. Others may charge prices much higher than in the market (though I’ll come back to this later), saying it all goes to the makers anyway and that asking for discounts would be tantamount to short-changing them.
While in general, pity marketing is an unsound business and development tactic, there is some merit to some aspects of it in the long run. I will discuss the dichotomy below beginning with the negative side, then the “positive” side.
What a pity
As I’ll never get tired of saying – and I mentioned this in our inaugural article of this column, which I wrote – the late Dr. Eduardo A. Morató, Jr. would always tell his students that, in the term “social enterprise”, “enterprise” is the noun, while “social” is the adjective. A true social enterprise must first and foremost be a viable business – and that means adopting sound business principles.
(Read more: Social enterprises: The true resilients)
Pity marketing doesn’t necessarily do the same. It runs the risk of bringing in an unmarketable product, all because it “supports so-and-so”. If it is a product that’s of low quality, in all honesty, it is no better than the cheaply-made, mass-produced “fast” or “disposable” goods that is the bane of every mindful consumer. Never mind that it’s handmade or beneficial to a family or a cause: it is just another inferior product entering and diluting a crowded market, and not in a good way.
Without the advocacy behind it, the product or model collapses, and the business is ultimately unsustainable. Even if the customer were a philanthropic spender, it actually does them a disservice: Although emotion is always part of a business transaction and a customer’s decision to avail of a good or service, pity marketing is borderline emotional blackmail, as someone can be guilt-tripped into buying something that does not really add value for them – which is, again, not a sound business practice. And it doesn’t sell for everyone (literally and figuratively). Thrust into the open water, the business will sink.
It’s also unfair to the social mission or beneficiaries themselves. It doesn’t give them justice, as they are immediately dismissed as confined within the bounds of mediocrity, their social status a convenient scapegoat: it creates an artificial limit around their perceived potential. For missions not centered on fellow humans as the beneficiaries, pity marketing may create an air of unattainability or, worse, undesirability around said mission. For social enterprises who would like the mission to become mainstream, this is not the ideal situation.
It ultimately condones the development of uncompetitive and/or unvaluable products – which will, in the long term, hurt the brand’s value, its beneficiaries, and the wider local market the enterprise operates in.
Although it sounds harsh for social enterprises, it’s business reality: For a social enterprise to become truly competitive and competent, and ultimately scale up, they need to be a well-oiled business machine. The products or services they develop should and do come first, as these represent the social enterprise and their mission. In the greater scheme of things, the product or service should speak for itself, with the social aspect being only an “added bonus” in the eyes of the market.
A change in mindset
On the other hand, it cannot be denied that many social enterprises do price their products at a premium. This is done out of necessity: If the value chain is to be compensated properly and ethically, the cost of goods or services sold would obviously increase.
Unfortunately, this is all being done against the backdrop of a crowded market rife with price wars – and with consumers placing budget first and foremost.
In last week’s article, my friend and partner Dexter wrote about how fast fashion is making life even harder for MSMEs. This phenomenon isn’t restricted to just apparel, though: So many industries suffer from this blight – and in many cases, they are forced to take part in it just to capture market share. MSMEs themselves are also participants in these price wars, such as the curbside small business or the tiangge – and, as mentioned, the casualties range from the environment, to producers, and even consumers themselves.
(Read more: The cost of low prices and its effects on MSMEs)
For budget-conscious consumers, however, personal savings takes precedence over a supply chain of integrity. Fair wages or environmental preservation are usually costs they are not willing to take on, especially when that alternative available on Shopee, shipping locally and for half the price, is so tempting and promises good quality as well. However, for us in this part of society, a competitive product at the expense of people or planet is just as bad, if not worse, than an uncompetitive product helping people or planet. The competitive factors lure in customers, without talking about the negative impacts their votes-by-wallet are creating.
This is what I mean by some form of pity marketing being beneficial in the long run, though it doesn’t work just on its own. Although we can never condone subpar quality for mission’s or beneficiaries’ sake, I believe that we should begin to educate consumers more on not just gunning for the lowest prices or love-at-first-glance, but on responsible, mindful, and sustainable consumption. Social enterprise products aren’t all high-priced per se, it’s just that people have become so used to seeing über-low prices – especially with the advent of Lazada and Shopee – that responsibly- and sustainably-made products are inadvertently compared.
Pity marketing, in this case, is not so much “pity” or “charity” marketing than awareness or transparency marketing to a cause or mission. There will still be some charity involved because of the nature of the advocacy, but it is important to highlight the attributes of the product or service and value chain, rather than just shining a bright spotlight on the beneficiaries that may ultimately not do them real justice.
Breaking the glass ceiling
Indeed, it is easier said than done to stop employing pity marketing, or at least to use it properly. But one advantage social entrepreneurs have is that the social entrepreneurship community is close-knit, and there is no shortage of mentors to help each other out. This is, in fact, one of the main raisons d’être of the Roots Collective. As a platform for social enterprises and creative startups, we treat each other in the community as fellow sounding boards for ideas.
Even taking a step back, the social enterprise intervention landscape is also full of organizations of non-social entrepreneur experts and advocates with their missions being to help social enterprises one way or another. For example, the annual BPI Sinag challenge, by the BPI Foundation and Bayan Academy, helps social enterprises solidify their business model in preparation to scale up and generate even more impact. The Masters in Entrepreneurship – Social Development Track (MESEDEV) at the Ateneo Graduate School of Business, also co-led by Bayan Academy, turns this into an academic-but-practical program where one’s pet project throughout the entire course is their social enterprise.
Sometimes, those closest to home can be our harshest but most loving critics. I have a friend – not a social entrepreneur, but a creative startup owner – whose product at the Ateneo de Manila University was quite promising. However, her mother kept on criticizing almost every detail of it, in an effort to help her fine-tune and perfect it. Now, she’s scaled up quite well.
My point being, as an MSME owner, do not be afraid to ask for help and feedback. We should never be arrogant to suppose that we can achieve something big all by ourselves; it is always due to the influence and support of others that we get there at all.
At the same time, as changemakers, it is our duty to educate and raise awareness on the broken systems and practices that we are trying to revolutionize in the first place. It cannot be messianic, however, lest we risk turning off or alienating an otherwise-supportive audience – it must be organic, non-judgmental, and relevant to the other. This is the balance that social entrepreneurs walk: serving both the market and their missions.
*This article was originally published on ABS-CBN News on 11 November 2021, in partnership between the Roots Collective and ABS-CBN News.