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In early 2009, the executive director of the Habitat for Humanity London (HFHL), located in London, Ontario, was faced with the responsibility of determining how to increase revenue for the non-profit organization. The organization provided safe, decent and affordable housing to those in need, and the board of directors had pledged to build 12 units in 2012. Funding generally came from the organization's ReStore; however, revenues had begun to level off in the preceding years. The executive director was evaluating several options of generating additional revenue. After examining HFHL's statement of cash flows and 10 years of ReStore earnings, the executive director had identified three options to increase revenues: relocation of the ReStore to increase efficiencies and increase inventory; increasing their salvage operation; and/or launching an automobile sale program. Or was there a better way to generate revenue that she hadn't yet considered?

In April 2009, the founder and owner of Terra Bite Lounge was considering opening another location. The Terra Bite Lounge was a Kirkland, Washington café with no prices and voluntary payment. The owner believed that Terra Bite was a demonstration of a high level of honesty and trust, between himself and the customer. There were several considerations to evaluate in deciding to open a new location. Where should the new location be? The current location was in an affluent suburb but the owner believed that several types of neighbourhoods would be receptive. What types of consumer characteristics would best be suited towards this model of trusting that payment would be made? Is there anything that could be added to the current model to make Terra Bite more successful? He was careful to consider those changes or additions that were consistent with the current social trust component of the original Terra Bite model.

In April 2009, the founder and owner of Terra Bite Lounge was considering opening another location. The Terra Bite Lounge was a Kirkland, Washington café with no prices and voluntary payment. The owner believed that Terra Bite was a demonstration of a high level of honesty and trust, between himself and the customer. There were several considerations to evaluate in deciding to open a new location. Where should the new location be? The current location was in an affluent suburb but the owner believed that several types of neighbourhoods would be receptive. What types of consumer characteristics would best be suited towards this model of trusting that payment would be made? Is there anything that could be added to the current model to make Terra Bite more successful? He was careful to consider those changes or additions that were consistent with the current social trust component of the original Terra Bite model.

This is an MIT Sloan Management Review article. That is a question that has long puzzled marketers who have heard from customers that they want to do business with ethically based firms -- defined as companies that produce products under conditions of progressive stakeholder relations, advanced environmental practices and respect for human rights. Marketers had no reason to doubt that sentiment, but they have always wondered if consumers would be willing to pay a higher price for ethically produced goods (since they tend to be more expensive to create.) It turns out that a series of controlled experiments proves that consumers will, in fact, pay a premium for ethically produced goods. But perhaps of equal interest is the fact that they will punish (by demanding a lower price) companies that are not seen as ethical. That relationship is not symmetrical. The punishment exacted is greater than the premium customers are willing to pay. How ethical do you have to be? Perhaps not as much as you might think. The research shows that a small degree of ethicalness "pays off" It is not necessary for a company's product to be "100% pure" in order to receive a price premium. This research is the first to find that consumers use price to punish unethical companies more than they use price to reward ethical companies, and that the ethicality of a company's behavior is, indeed, an important consideration for consumers (as demonstrated in their willingness-to-pay decisions).