Freeset, an eco and people-friendly business model
The busy holiday period is a good time to highlight one of the many charity based business models. The revenue model that is being used by these organizations is often not that complex. Many of them simply ask for a donation while others will give a commodity in return. A pencil, a plant, a newspaper and so on. But asking thousands of families for donations is labor intensive so when you’re trying to do something valuable, a B2B charity business model might be a better option. Freeset is such a company. They realize they are not in the product business, but in the reputation business. So when you’re selling the value ‘doing good’ the focus of your branding will not be the functionality of the product. Freeset sells Jute bags so they won’t last forever. But even this lack of quality is being used as positive feature. Using Jute makes Freeset bags biodegradable so that makes them (more) eco-friendly. Not only the product is focused on ‘doing good’. The business model of Freeset is build on top of a revenue model where the profits are being used to fight sex trafficking. Thereby the fair-trade business of Freeset is being perceived as People-friendly as well. So when clients are buying these event bags, they are ‘doing good’ and receive a platform (the bags) to show this to the world. Events itself are generally build to give companies opportunities to get exposure. And sadly it is exposure what you need when you are selling charity to businesses. Doing good, without anybody noticing, is economically not interesting.
Large companies that are trying to be eco-friendly, people-friendly and thereby claiming to do good are having a hard time online. When done right a profitable revenue model can be the result. Freeset is therefor a good example. But brands that are using charity or good causes as a marketing gimmick will be publicly crucified. See how even Apple is trying to coop with bad publicity on their green efforts. They make attractive products but being green is currently not their focus. Consumers have more power than ever. This forces companies like Apple to be more transparent on their efforts. But when you’re active in the ‘charity business’ you better do this over the top like Freeset. Eco-friendly, Fair-trade, People-friendly and so on. Do it and show it to your clients.
Posted December 26th, 2009 in Consumer goods
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