When it Comes to CSR and Cause-Related Efforts, it Pays to be Proactive

By: Mark Dority, Director of Marketing

Last year, under pressure from environmentally-conscious customers and activists, Disney – which, besides making movies and running theme parks, also produces and sells hundreds of millions of books and magazines yearly – began switching to sustainable paper suppliers.

Disney is doing this – as are many other publishers – because protecting the environment matters to its consumers. The overhaul, though likely to be expensive, is also likely to pay off in long-term brand equity and customer goodwill.

70% of US companies have a permanent corporate social responsibility (CSR) program in place (2011 survey by MIT) and that number is likely to be much higher by now. However, I was surprised to read in a recent Financial Post article that only about half of private Canadian companies do.

The article suggests that there’s more to CSR than just a business payoff. CSR initiatives can improve labor standards, protect the environment and support customers’ health.  So why have private Canadian companies placed CSR low on their priorities list?

The author says it’s likely these companies aren’t getting much demand for CSR efforts from their shareholders, regulators or customers.

Sure, CSR is not for 100% of companies: those in highly-technical or B2B verticals may not feel any pressure to adopt CSR, so for them it might not make sense.

Consumer brands, however, don’t have that luxury.

That’s because cause consciousness has been growing among consumers for years and, with the world growing ever more interconnected, this trend is likely to accelerate as the Gen X-ers and Millennials age. These consumers will put pressure on brands to do the right thing.

eMarketer recently reported that “a growing number of consumers considered ‘social purpose’ the leading purchase driver when quality and price were equal.” And Edelman found in its 2012 Goodpurpose study that over 56% of US Internet users have bought a product specifically because the brand supports a cause.

In fact, CSR may even factor into whether companies can attract top young talent. A 2011 Deloitte survey found that over two-thirds of Millennials say a company’s stance on CSR would influence their decision to work there.

In my opinion, the numbers speak for themselves.  But we also know that if a company wants to do well as a result of doing good it needs to generate revenues, or it can’t do either, a topic that I previously addressed in a post, For Profit or Not, All Programs Need to Show ROI, on our blog last year.

For many companies CSR pays off in a number of ways:

  • a better reputation,
  • increased consumer goodwill,
  • and, ultimately, in loyalty.

So how does a company determine whether CSR will pay off for them? By enabling customers to contribute directly to the causes they care about, while tracking those transactions.

Not only do technology solutions such as our Cause-Related Loyalty Marketing™ platform help companies boost loyalty by allowing their customers to donate unused rewards to causes of their choice, they also gather consumer data that shows where the ROI of their cause-related programs is coming from.

Even in tough economic times, making meaningful emotional connections with customers through CSR and cause-related efforts have been proven to boost engagement and ROI – not just in the US or Canada, but anywhere in the world.

Are you involved in any CSR or cause-related marketing initiatives?  I would love to get your thoughts and feedback on how these programs can boost engagement and ROI with consumers.