Have consumers ever been more powerful than they are today?
A Facebook posting led thousands of people to move money out of big banks and into credit unions. When customers revolted, Verizon dropped plans to charge a $2 “convenience fee” to pay bills online. A petition at change.org led toBank of America back off a scheme to charge customers for using their debit cards.
“It’s a great time to be a citizen,” says Brent Schulkin. “It’s a really bad time to be a failed institution.”
Schulkin, who is 31, is the founder of Carrotmob, a startup that aims to use the power of consumers to do good. Instead of boycotting or protesting companies for missteps (or downright bad behavior), Carrotmob organizes campaigns in which people offer to spend their money to support a business, and in return the business agrees to take an action that the people care about. It’s the opposite of a boycott, and it’s called Carrotmob (not to be confused with the comedian Carrot Top) because it uses a “carrot” instead of a “stick” to spark change.
You can think of Carrotmob as another way to drive sustainability by using social media. The idea has been kicking around Schulkin’s head since 2003 when he was an undergrad at Stanford. As it evolves, it is likely to look more like Groupon (which uses the power of collective purchasing to drive discounts) or Kickstarter (where people can come together to raise money to support a project) while tapping into some of the frustrations that energizedOccupyWallStreet.
“There are a huge number of people today who look at the machinery that makes our society work, and they think it’s broken,” Schulkin says, and he’s hope to channel their energy into fixing it.
The idea that consumers can influence companies with their pocketbooks isn’t new, of course. My friend Joel Makower, the founder of GreenBiz, wrote a book called The Green Consumer back in 1989. (You can buy it for a penny on Amazon.) And socially conscious consumers helped build brands like Newman’s Own and Ben & Jerry’s. even today, though, green consumers are not well-organized, or connected to one another. You may buy Seventh Generation laundry detergent or Timberland boots but it’s not clear what difference, if any, you have made by doing so.
This is Brent Schulkin of Carrotmob
Schulkin got Carrotmob going four years ago by organizing his friends and their friends to support a liquor store in the Mission district of San Francisco. They spent $9,000 in a single day on “beer and popsicles,” had a party afterwards and in return the owner did an energy retrofit on the store. They made a video of that first campaign and the idea spread, as good ideas often do on the net.
Since then, more than 175 Carrotmobs organized by grass-roots groups around the world, including France (“Invasion des Carrottes a Rennes”), Germany (“Erster Freiburger Carrotmob”) and Finland (“Porkannamafia!”, my personal favorite). Most have focused on energy and climate issues because retailers can be persuaded to invest in energy efficiency or clean power.
These grass-roots efforts will continue, Schulkin says, mostly because they run themselves: “It’s their energy, their ideas, their passion. I just got an email from Estonia.”
The next step–and here is where things can get interesting and complicated–will involve harnessing all that buying power to support action by a big company or brand.
“What does it look like if we get millions of people into a network and drive millions of dollars in sales to a big company?” Schulkin asks.
This raises as many questions as it answers. How can Carrotmob insure that the quid for their quo is real? Who decides which companies or products are most deserving? And how does the venture govern and sustain itself?
Schulkin told me at the GreenBiz Forum in New York last week that Carrotmob is a work in progress, mostly supported by donations and sweat equity. He’s got bigger things in mind. The FAQ’s on the Carrotmob website point to a possible business model:
The primary model we are going to pursue will work like this: With our team and our technology we will help facilitate campaigns, and then we will charge businesses a small fee based on how much money the mob collectively spends. This fee will vary based on the circumstances of the campaign, but in general we think it’s the most sensible revenue model for us to pursue.
This makes Carrotmob sound a bit like Groupon, except that instead of a discount, its buyers get an environmental or social payback. Trust becomes a key factor at that point: consumers will have to trust Carrotmob and trust (or verify) that the company is, in fact, taking an action it would not otherwise do. Those are big hurdles. If Carrotmob can overcome them, it could become a real force for change.
This story was first published at GreenBiz.com, where I’m a senior writer.
Vote with Your Money!
How Organized Consumer Purchasing Can Change Business from carrotmob on Vimeo.