Sample Questions and Answers
on the New Consumer Survey
Reporters can ask some tough questions. Below are a few examples
of questions you should be prepared for, and suggestions on how
to answer them.
About the Survey
How many people were surveyed and when?
2,031 Americans were surveyed via telephone between July 24 and
July 28, 2003.
Was the survey nationally representative?
Yes, the survey was a random sample that was representative of
all Americans. Completed interviews were weighted by age, sex, geographic
region, and race to ensure reliable and accurate representation
of the total adult population.
What is the margin of error for the survey?
The margin of error at a 95 percent confidence level is plus or
minus two percentage points for the sample of 2,031. That means,
95 times out of 100, the survey results would vary by plus or minus
two percentage points if the entire U.S. population were sampled.
How credible is this survey if it was commissioned by cooperatives?
Though cooperatives commissioned the survey, it was conducted by
the reputable Opinion Research Corporation, Princeton, N.J. which
helps its clients design survey questions to reduce the potential
for bias in questioning and ensure the most accurate results.
Moreover, the Consumer Federation of America was a partner in developing
the survey questions in a manner that would provide the most representative
picture of the views of American consumers.
Why did cooperatives conduct this survey?
In light of corporate accounting scandals that have been
attributed to governance flaws of large, publicly traded corporations,
we wanted to gauge consumer perception of the more democratic governance
structure that cooperatives embrace.
We also wanted to find out how the public perceived cooperatives
relative to publicly traded corporations.
Why did you ask questions about democratic business structure?
Many corporate governance experts and observers have attributed
the high-profile corporate accountability scandals, like Enron and
Worldcom, to inadequate board accountability and inattention to
the best interests of the owners—that is, the shareholders.
In the case of cooperatives, the people who use the co-op's services
or buy its goods are the owners of the business: that is, the customers
and the owners are one and the same. And the board members are elected
by other members from within the membership. There are no conflicting
loyalties.
That structure provides for more board accountability than corporations
whose board members that are largely appointed by management or
other board members, and who receive hefty payments for their service.
Board members of large, publicly traded companies are not truly
elected.
We wanted to find out if a more democratic accountable governance
structure made a difference to the public in terms of trust. Clearly,
it does.
This survey says consumers are more likely to do business
with co-ops and that they trust them more than public companies,
but it doesn't necessarily say consumers distrust publicly traded
corporations. Aren't you drawing conclusions you shouldn't?
The survey doesn't say consumers distrust corporate America,
but it does show that consumers trust cooperatives more than publicly
traded corporations and believe that a more democratic, accountable
business structure is more trustworthy.
It's clear that some consumers agree that large, publicly
corporations operate ethically and in the best interests of consumers.
But on nearly every positive business attribute, co-ops
rate far higher than publicly traded corporations. The results are
clear that more Americans view cooperatives as trustworthy and ethical
businesses than view corporations that way.
The issue is public trust. And the way to regain it is for corporate
American to adopt the more democratic, accountable attributes of
cooperatives. But until that happens, consumers have an alternative
to corporations: local, consumer-owned [or producer-owned] co-ops
that operate to serve their members' interests, not to enrich Wall
Street investors.
If the survey was conducted in July, why did you wait until
October to release the results? Are the data still accurate?
The data were collected in late July, tabulated and analyzed in
August and distributed to cooperatives in September.
We wanted to be sure that there would be time to provide the survey
results to all cooperatives across the country in preparation for
their annual celebration of cooperatives during October.
The survey results are as relevant today as they were in July.
And they track with the results of similar surveys conducted in
previous years.
The survey says less than half of Americans are familiar
with co-ops. So how can they trust them more than other businesses?
We asked respondents how familiar they were with the structure
and philosophy of cooperatives. That's different than recognizing
cooperatives in the marketplace for the quality and service they
offer to consumers. This survey demonstrates that even though less
than half of consumers are familiar with the technical co-op structure,
their recognition of co-op value and service is quite strong. Consumers
clearly know co-ops by reputation: their reputation for customer
service, competitive prices, high quality products and services,
ethical operations, local ownership, and their commitment to communities.
For all the positive business attributes we asked about, a majority
of all respondents agreed that those attributes described cooperatives.
But more important, respondents that were already members of co-ops
rated them even higher. That demonstrates that consumers who are
members of co-ops have an even stronger recognition of the quality
and service that co-ops offer them.
And co-op members tend to be more loyal to their co-ops. Though
all consumers said they were more likely to do business with a company
if they knew it to be a cooperative, those who were already members
of a co-op were even more likely to prefer cooperatives.
Do co-op members trust and prefer co-ops more than non-members?
Yes. Survey results indicate that those who are already members
of cooperatives are more likely to do business with them than non-members.
But even among non-members, for most cooperatives, more than a majority
said they'd be more likely to buy a business's products or use its
services if they knew it to be a cooperative. And even among non-members,
co-ops are rated higher than large, publicly traded corporations
for the top eight business attributes we asked about.
Why are housing co-ops the only type of cooperatives that
consumers don't seem to prefer?
Housing cooperatives tend to be concentrated in just a few cities
in the United States: New York and Washington, D.C. As a result,
fewer consumers are aware of housing cooperatives.
However, among African Americans surveyed, a majority said they'd
be more likely to buy a unit or a home if it was part of a cooperative.
And African Americans were generally more likely than whites to
do business with a co-op.
Why do farmer-owned cooperatives rate so highly with consumers?
The survey didn't ask why consumers preferred products
produced by farmer-owned cooperatives or why they viewed
them so positively. But it's clear that consumers not only think
farmer co-ops serve an important role in the prosperity of rural
America, they prefer products produced by farmer-owned cooperatives.
We suspect that consumers recognize the pride of ownership among
producers that comes from belonging to a co-op and the quality products
that result from that ownership.
About Cooperatives
How many co-ops are there?
There is no official government accounting of cooperatives. However,
based on information gathered by the co-op community, we believe
there are some 48,000 cooperatives in the U.S. with some 120 million
members.
I thought co-ops were only for poor people?
Co-ops serve people from all walks of life and of all
economic backgrounds. Though there are many co-ops that target low
and middle-income consumers, such as community development credit
unions and limited-equity housing co-ops, co-ops serve all populations
regardless of income. In the survey, income wasn't a factor in whether
a consumer was more or less likely to do business with a co-op.
Likewise, where people live appears to make little difference
in whether they prefer co-ops. Urban and suburban adults and rural
residents, in most cases, are about as likely to say knowing that
a business is a co-op increases the likelihood that they would do
business with it.
I thought co-ops were only for wealthy people?
Co-ops serve people from all walks of life and of all economic
backgrounds. Most co-ops have members that have widely ranging incomes.
And there are many co-ops that target low and middle-income consumers,
such as community development credit unions, which serve underserved
communities, and limited-equity housing co-ops that seek to keep
the costs of their units affordable.
But the survey found that income makes little difference in whether
a consumer is likely to do business with a co-op or not.
I thought co-ops were only for farmers?
Some 48,000 cooperatives do business in just about every industry
in the U.S. economy, and serve just about every community—rural
and urban. Among the 48,000 co-ops, farmer-owned co-ops account
for about 3,500 of them.
In rural America, agricultural marketing and supply co-ops as well
as electric and telephone cooperatives are most common. But other
types of co-ops serve rural consumers: such as consumer-owned grocery
stores, parent-owned childcare co-ops, healthcare cooperatives,
housing cooperatives, and purchasing co-ops for Main Street businesses.
In urban America, co-ops are also prevalent: They include credit
unions, food co-ops, consumer-owned cooperative health maintenance
organizations, housing cooperatives, worker-owned co-ops, childcare
co-ops, purchasing cooperatives for independent businesses, and
mutual insurance companies. There are even urban electric and energy
cooperatives supplying urban consumers with affordable power.
Aren't co-ops a dying breed of business?
No. Co-ops are thriving. Co-ops are among some of the largest,
growing businesses in the United States. They include name brands
like Ace Hardware, TruServ, Land O'Lakes, Welch's, Sunkist, Best
Western, Carpet One, and many other well recognized brand names.
Purchasing co-ops are increasingly becoming the solution
for small, independent business owners who are seeking new tools
to keep their costs down and their service levels high. Independent
minded entrepreneurs want to join group buying organizations that
they can own and control—and those are cooperative.
Even among small food co-ops that face competition from conventional
and specialty grocery chains, returns are growing faster than for
most of their investor-owned counterparts.
Like all businesses, some cooperatives close each year. But new
cooperatives are forming all the time, even in industries facing
economic distress, such as agriculture. That's because co-ops are
engines for economic growth.
Are co-ops real businesses?
Yes, all co-ops are, by definition and in practice, businesses.
Many co-ops operate on a not-for-profit basis—that is, they're
in business to serve their members, not to generate returns for
investors. But that doesn't mean they aren't businesses. It means
that any profits that are generated are returned to their members
in the form of dividends or equity shares based on how much business
each member conducted with the co-op. Members receive returns in
the form of dividend checks (known as patronage refunds) lower prices
or fees, reduced interest rates on loans (credit unions), or in
the form of growth in a member's equity share of the company.
Co-ops range in size from Fortune 500 companies to co-ops that
operate a single, small local store.
I thought co-ops went out of fashion with the hippies?
In the 1970s, food cooperatives pioneered the natural and organic
food industry, forming small community retail markets for those
goods when the conventional industry wouldn't supply them to consumers.
As a result, some people associate cooperatives with the early years
of the alternative natural food industry, which, by the way, is
now mainstream, growing at about 20% per year. Even large multinational
conventional grocery chains offer organic products in their stores.
The early natural food cooperatives have grown into modern, thriving
retail outlets. And they are just one part of the co-op sector.
Farm and electric cooperatives have been around since the 1930s
and many purchasing co-ops have been in business for more than 40
years.
How is a mutual insurance company a co-op?
Mutual insurance companies are owned by their policyholders. Though
most don't formally refer to themselves as cooperatives, they operate
according to cooperative principles, returning some portion of the
profits each year to policyholders.
By the way, in many countries, cooperatives are known as "mutuals"
because they are mutual business endeavors.
Is an HMO a co-op?
No. Health Maintenance Organizations, though they refer to their
customers as members, are not cooperatives. However, at one point
in time, many of them were. But the high cost of health care has
driven consolidation in that market and many cooperatives were sold
to for-profit companies.
However, there are still several consumer owned HMO cooperatives
in the U.S. Two notable examples are Minnesota-based HealthPartners,
and Washington state-based Group Health Cooperative of Puget Sound.
Are all businesses that claim to have members really cooperatives?
No. Just saying a customer is a "member" doesn't make it so. In
fact, many "group buying clubs" —like Sam's Club—that
require consumers to pay membership fees are NOT cooperatives. HMO
"members" are not necessarily members of a co-op either. Most of
these businesses are for-profit companies.
Real co-ops are actually owned and governed by their members. If
you are a customer of a business that calls you a "member," but
you can't vote in the board election, attend the business's annual
meeting, read its bylaws or governing articles, or share in the
profits, it's not a co-op.
Why don't more consumers know about co-ops if there are
so many of them in the nation?
There is no single government source of information about cooperatives.
The Department of Commerce does not collect information about co-ops.
And there are no state or federal agencies dedicated to advancing
all types of cooperatives. So there is little consolidated information
about co-ops.
How are co-ops different from other types of businesses?
There are many ways that businesses can organize: as publicly traded
corporations that trade shares on national stock exchanges, as partnerships,
as privately held corporations, as limited liability corporations,
or as cooperatives.
Though co-ops can organize under different legal business forms
(as non-profits, as corporations, or as co-ops in states with co-op
statutes) they are all different from other types of businesses
in several ways. The most important difference is that they are
owned and controlled by the people who buy their goods and use their
services—their members—and return any surplus revenues
to those member-owners. No other business form has this characteristic.
How to Use the Key Messages
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