Why Customers May Never Care About Your Corporate Social Responsibility (CSR)

A few interesting studies have been released recently that look at the “Green or Corporate Social Responsibility Movement.” I like to focus on how it impacts customers. So a few recent stats to consider:

  1. Your messaging isn’t memorable. Over 70% of North Americans are interested in the CSR of the brands they buy, but most can’t identify which brands are socially responsible. (The Shift Report)
  2. Your messaging isn’t believable. 12% of consumers “seldom or never” believe green claims, while 65% will believe green claims “some of the time”. (Burst Online Insights)
  3. We don’t know what “Green” really means. Almost 50% of us believe that products marketed as “Green” or “Environmentally Friendly” have a positive (i.e., beneficial) impact on the environment. Turns out that green or environmentaly friendly products are only about being less harmful than prior versions or competing products. Only 22% of us understand this distinction. (2008 Green Gap Survey)

So it’s still a bit early in the CSR movement and the road to success isn’t fully paved, and some confusion in the market is expected. But a general lack of trust from customers in advertising claims and corporate motivations isn’t going to help. Corporations are still focused on the single bottom line of profit, versus the triple bottom line of CSR (profit, people, and planet).

Why isn’t your messaging memorable? Beyond the general skepticism out there, CSR messaging often misses because customers “don’t get it,” as it doesn’t fit with the profile or strategy of the business. It’s what Jim Collins refers to as the distinction between “inputs and outputs of greatness” in his Good to Great for the Social Sectors. Most businesses focus on the input (“how much money do we make per dollar of invested capital?”), but to be memorable, businesses need to focus on the outputs (“how effectively do we deliver on our mission and make a distinctive impact, relative to our resources?”).

Being a good corporate citizen requires CSR efforts that typically fall into one of five areas:

  1. Responsible business practices
  2. Environmental initiatives
  3. Cause marketing
  4. Corporate giving (philanthropy)
  5. Employee engagement & volunteerism.

All of these efforts impact customers’ perceptions and attitudes. But they need to fit the profile and strategy of the business. It’s not good enough to do these things just for the sake of doing them. Well, it’s certainly better than not doing them. For CSR to be sustainable it needs to be part of the DNA of the business. Drug companies need to partner with the organizations that help those with the diseases their drugs target. Auto part chain stores need to be involved in driver education so we have fewer accidents. Home builders need to partner with organizations that help the homeless. Credit Unions and banks should foster financial literacy/education in our schools and communities. It’s about making a difference at the root cause of an issue that a company and it’s employees have both the knowledge and desire to get behind. These CSR strategies fit the company profile, consumers will “get it” and feel their purchases will have an impact beyond the business’s profit motivation.

In the abscence of data, one needs discernement. CSR is a struggle, and most leaders want to see the data that tells them it’s the right thing to do. We don’t have all the data, but deep down a business leader who is any good should know it’s the right thing to do. Anyone can look at data and make a decision, but in the abscence of data, the best leaders of our time have proved their worth through their ability to discern the right decision, the best next step.


Who Really Shapes Company Reputations?

all_for_one.jpg  According to a recent study by Deloitte not only is there a significant amount of information on the web to aid purchasing decisions, but these reviews also shape company reputations.  Well, that’s really no big surprise to readers of this blog.  According to the survey:

62% of consumers read consumer-written product reviews on the Internet. Of these, 82% say their purchase decisions are influenced by these reviews, either influencing them to buy a different product than the one they were initially considering or confirming the original purchase intention.  In addition 69% of consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact beyond online.


What I did find interesting is this quote from Deloitte’s Pat Conroy in their press release:

“This increasing market transparency can adversely impact the margins, market share and brand equity of consumer products companies,” said Pat Conroy, vice chairman and US consumer products group leader at Deloitte & Touche USA LLP.  “In the past, clever marketers and advertisers shaped brands, but now consumers are increasingly empowered, everyone has a voice, and information and opinions are instantly dispersed. Consumer product companies need to determine how best to capitalize on this new landscape. Clearly, there will be consequences for those who don’t.”

Is it really ‘increasing market transparency’ that is adversely impacting the margins, or is it a lousy product or a lousy customer experience?  Marketing transparency has always been there, it just happens much faster these days as the result of all the online tools that speed up and increase access to word-of-mouth.  Companies are now faced with developing better products and better experiences because “the word” can get out there faster and be “heard” by more consumers than ever before.  Marketers need to understand that shaping brands is now a “partnership” with current customers where their voice should be heard, because potential customers are certainly listening.

This reminds me of the quote by Morris Hite in 1988:

“Nothing will put a bad product out of business faster than a good advertising campaign.”

So maybe know we need to change that quote: “Nothing will put a bad product out of business faster than honest word-of-mouth.”  So companies take note  – do your customer research, create relevant products and great customer experiences, and welcome this market transparency.  It could be the best marketing campaign you ever created.