Tuesday, November 1, 2011

Carrotmobs and the "race to the top"

Carrotmobs are the newest thing in consumer organization. Though the practice has thus far been used to advance a "green" agenda, the fundamental practice of carrotmobbing has been used by small groups trying to raise money for a long time.

In a carrotmob, the "mob" decides which business to all frequent on a set date. They pick one by soliciting bids to see who will dedicate the largest percentage of their revenues that day to making their stores more eco-friendly.

This practice works by reversing the incentive structure companies usually face when making decisions about eco-friendliness. Instead of making money by cutting costs, they stand to make more money by spending more to be the greenest; instead of a race to the bottom, it's a race to the top.

Carrotmobs are almost certainly flawed--unless they somehow increase overall demand, they cut into business profitability with unknown long-term effects--but they do seem like a good way to make consumer's pocketbook-votes heard more clearly.

A comparison to Groupon is inevitable, but I think that carrotmobs avoid a lot of the problems that Groupon seems to be having.

(Thanks to Peter Jaworski)

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Do you have suggestions on where we could find more examples of this phenomenon?