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Only Ethical Marketing Will Stand the Test of Time Ethical marketing, or a lack thereof, could decide the future of your business.

By Aaron Haynes Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Antonio Santarsiero/EyeEm | Getty Images

Ethics took a hit during the 2016 election cycle. Sometimes it seems the hits just keep on coming. From Kellyanne Conway's innovative term, "alternative facts," to former Gen. Michael Flynn pocketing a cool half-million in cash, politics, already seemingly rooted in the mud, got dirtier.

Is there anything from the recent activity in Washington D.C. that marketers can learn? Oh yes.

Every business, from the smallest mom and pop store to the largest multi-national company, can choose to be straight, transparent and fair with their customers -- or not. When carried out in a thoughtful way, ethical marketing can be an effective form of advertising. At the same time, unethical marketing doesn't guarantee more sales or less advertising costs.

Related: Want My Business? Don't Lie to Me.

What is ethical marketing?

Ethical marketing, simply put, is applying ethics to the marketing process -- giving thoughtful examination of particular marketing issues as they relate to moral judgment. Businesses who endorse and practice ethical marketing demonstrate a socially responsible and culturally sensitive business.

The growing trend of fair trade is just one example of the impact of ethical marketing. In the 2009 Ethical Shoppers Price Index Survey, the most popular ethical badge was fair trade. Fair trade means a consumer pays a guaranteed price to a small group of producers who, in turn, agree to pay fair labor prices and conserve the environment.

Many businesses have attempted to utilize ethics as a means to appear responsible by spinning environmental claims. Consumers, in return, have begun to be less trusting of ethical claims, and many top brands have suffered consumer boycotts. While many marketers have attempted to use green issues, research has shown that two-thirds of consumers respond to ethical claims related to people more than to the environment, according to Chris Arnold in Ethical Marketing & The New Consumer.

Unethical marketing.

Notwithstanding unethical marketing's ability to morph and change, almost all forms are branches of six types.

  1. Surrogate. In some places, there are regulations which prohibit advertising cigarettes or alcohol. Surrogate advertising seeks ways to remind consumers of their existence without being direct.
  2. Exaggeration. This is false claims made about a product's quality or popularity. A slogan such as "get coverage everywhere on earth" promotes a feature that can't be delivered.
  3. Puffery. This is when subjective claims "puffs up" a company's products. Statements such as "the best tasting coffee" cannot be confirmed.
  4. Unverified claims. Products that promise to deliver results without any scientific support as evidence fall into the unverified claims type of unethical marketing. Commercials promising stronger, shinier hair do so without letting buyers know why or how.
  5. Stereotyping women. Women are often portrayed as sex objects in advertising. This sort of advertising perpetuates a negative stereotype and sustains a sexist culture.
  6. False comparisons. Whenever a business makes false or misleading claims about competitors' products, it's a false comparison.

Developing an ethical marketing plan.

Ethical marketing offers tools so businesses may evaluate their marketing strategies. A strategic decision must be made -- should marketing increase profits or polish an image? Once a strategic decision is reached, steps to modify the current strategy are taken. Sometimes this means minor changes.

The initial step for any business involved in ethical marketing is a corporate analysis including customers and marketplace. Once a company has decided to pursue ethical marketing, it must decide which ad features to follow. The business ad campaign must deliver and strike a delicate balance between sustaining truth and persuading the customer.

For most businesses, knowledge of doing the right thing will not be sufficient. Ethical marketing highlights the choices a company has made in boosting their public reputation -- a powerful way to connect with consumers. Doing it wrong can seem self-congratulatory.

The Ethical Positioning Index (EPI) is an innovative tool for differential brand positioning. Blending a brand's identity, image, personality, awareness and communication with a company's ethics, beliefs, values and customs, the EPI helps determine a brand's ethical positioning.

Related: One Habit Multi-millionaires Have That You Need to Take Up

Core ethical marketing plan checklist.

Here are five steps to create an ethical marketing plan for your business. Each step contains a sequence of topics and questions for discussion that should be used to formulate a unique ethical marketing profile. The process can be as actionable as needed, depending on the key areas of emphasis for your business or brand.

1. Clarify

  • Determine exactly what is to be decided.

  • Devise the complete range of alternatives.

  • Eliminate illegal and improper choices.

  • Find at least three ethical options.

  • Examine each option to determine which values are involved.

2. Evaluate

  • Do any of the options require sacrificing any ethical principle?

  • Separate solid facts from beliefs, theories and rationalization.

  • Review credibility of sources.

  • Consider each alternative, and consider the benefits versus risk.

3. Decide

  • Determine which option is not true.

  • Evaluate viable alternatives.

  • Prioritize values.

  • Determine who will be harmed the least and who will be helped the most.

  • Determine the worst case scenario.

4. Implement

  • Develop a plan for implementing the choice.

  • Maximize benefits while minimizing costs and risks.

4. Monitor/modify

  • Monitor the decisions' effects.

  • Be ready and amenable to modify a plan or change course.

  • Adjust to supplementary perspectives as they become obtainable.

There's an app for that.

Your customers have the power to check your ethics in their pockets. Ethical Scanner is a free application which allows potential customers to find out if the manufacturer is responsible for harming the environment or mistreating their workforce. All a customer has to do is scan the barcode, and if there's a story of concern, Ethical Scanner links to the report. If there is no story, the app makes it easy for the customer to quickly submit a link, so other users will get to know about the business.

Related: Why Trust Is the New Marketing Currency

Ethical marketing is critical. Any business perceived to lack ethics is seen as a reflection lacking a moral compass, having doubtful product quality and holding no corporate community concern. When a lack of ethics becomes public knowledge, businesses lose credibility. Some companies may survive lost credibility. Others will find their customer base vanishing. Even if a business recovers, a lot of resources are consumed as it tries to restore its image and regain consumer trust. Just try to buy Enron stock.

Aaron Haynes

Entrepreneur and Digital Marketer

Aaron Haynes is an entrepreneur, digital marketing enthusiast and YEC member. With over half a decade's experience in business development, Aaron now oversees the marketing strategy and development of several businesses through his agency Fenix Pro Digital.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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