Philanthropy as Added Value

Customers care more about what you give the community than what you give them

Published: Monday, March 19, 2012 - 16:52

Not too long ago, my wife and I attended a fundraiser hosted by one local restaurateur on behalf of another. The locally owned and long-time eatery, Humpty Dumpty, in Grass Valley, California, had burned to the ground, obviously putting all its employees out of a job. So, the staff of Kane’s Restaurant and Maria’s Mexican Restaurant, both owned by John Kane, approached Kane and suggested a fundraiser where they would donate all their tips for one night to the out-of-work employees. Kane agreed and went further, offering to match the tips, doubling the night’s contributions.

A Tuesday night was chosen for the event, typically a slow night for restaurants, and the local newspapers advertised the upcoming fundraiser. My wife and I got there late, but the place was still packed. According to our waitress, earlier in the evening the waiting line had snaked out the door and into the rainy night. Practically everybody in this small town wanted to take part in helping out their neighbors.

It was pretty unbelievable. The wait staff were absolutely beaming, even though they had grossly underestimated the response, had too few staff on hand, and were hustling their rear ends off—and only getting their hourly pay. Our waitress said she had never seen anything like it. People were buying salads and leaving $50 tips, buying dinners and leaving $100 tips. Remember that Kane matched all the tips, so while he earned a lot of goodwill from the community and it was probably the most business he had ever seen on a Tuesday night, he was definitely out of pocket for the evening.

OK. So it’s a nice touchy-feely story; lot’s of tears and heart tugs. The customers were happy, the wait staff were happy, the staff from Humpty Dumpty were happy, and Kane was happy. Awwwww. What’s my point?

There are a lot of ways a company can provide “added value” for customers. Typically we think in terms of extra services that are immediately tangible to the customer. In other words, the added value to the customer is that the customer gets something extra for themselves. Of course, we all know that while the added value is usually something that has meaning to the customer, it doesn’t typically cost the company much… or anything. Added value is that little extra bit of service that says “we care.”

But there is a different type of added value that we don’t often think about, much less see, where the added value to the customer is what the company puts back into the local or global community—use my service, and I will do something, not for you, but for the community… and it is actually going to cost my company something.

This type of added value is much more important to the customer. Involving your customers in philanthropy makes them feel as if all of you are part of the community. Although this is probably most effective for smaller businesses, even big business recognizes the value of shared philanthropy. Look at how often companies offer to donate a part of your purchase to breast cancer, famine relief, or disaster recovery.

Sure, you can be a cynic and argue that a company might not really care about the philanthropy; it’s all about the publicity and positive PR. And while that may be true at times, who cares? Certainly not the people at the receiving end of philanthropy. Besides, I think we all know when a company is playing us and when it is being sincere. There is a “feeling” about a company that pursues philanthropy for the right reasons. When customers believe your philanthropy is sincere, they will do business with you because they want to support a company that supports the community.

For the customer, the added value takes several forms:
I feel good because I am indirectly contributing to the community.
I feel good because I am helping support a company that wants to make a difference.
I feel good because I know my money is meant for more than simply lining an owner’s or shareholder’s pocket.

And all that feel good translates to the bottom line. If you feel good about a company, you are willing not only to buy their products or service, you also are willing to pay a premium.

In our case, we want to support our waitress (which, incidentally, will also support Kane’s restaurant). Our waitress volunteered her tips for an evening to help someone else. So, she can expect to see us soon and get a big fat tip… just because. This one evening added value to our restaurant experience in a way that a coupon or even exemplary service never could.

I encourage you to think differently about what your company offers as added value. How can you help your customers feel like they are making a difference?

About The Author

Dirk Dusharme @ Quality Digest

Dirk Dusharme is Quality Digest’s editor in chief.