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.


The Key to Customer Advocacy is …

key_image.jpg  According to the article “Is Your Bank an Advocate” on the 1 to 1 website, simplicity is the key for banks becoming an advocate for their customers.  The article discusses the results from Forrester’s 2007 report “How Canadians Rate Their Banks on Customer Advocacy.” Making advocacy simple equates to a simple product set, simple messaging, first-call resolution, and working hard to solve customer issues.

But let’s make sure we define advocacy.  It is not about a series of activities you do that only focus on getting customers to be advocates for your business by spreading positive word-of-mouth and referring others.  It is a strategy that focuses on first doing what is in the best interest of your customers, and by doing so, your business is then rewareded with stronger relationships, more referrals and positive word-of-mouth.  The first one is focused on what customers can do for you, the second one focuses on what you can do for customers.  It’s the second one that will bear better results.

Those results include a higher product purchase rate average (3.4 vs 2.75) for those banks who score high on customer advocacy.  According to Bill Doyle, the author of the report:

“High customer advocacy leads to stronger organic growth.  Customers who feel that the bank is doing what’s best for them rather than what’s best for the bottom line tend to buy more, and bring in friends and family as new customers.”

In addition, Ron Shevlin’s work on advocacy while at Forrester found that consumers’ perceptions of their banks’ customer advocacy is the strongest driver of the intention to make future purchases from their bank.  Ron also goes into the three facets of advocacy (human, operational, and product).

While simplicity may be the key, you need to be clear on what type of advocacy you are working towards and why. Measuring the results of an advocacy strategy can certainly include product purchase rates, but understand that there is whole lot more going on here.  One needs to account for the positive word-of-mouth, the increased referrals, and improved customer loyalty that are generated by this type of strategy. 

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The Big D’s – The Two Keys That Make or Break a Customer Initiative

block-d.jpg  After years of working on “customer” projects it always seems to be the same two “keys” that get a project to show results quickly, or force us into endless meetings to discuss these two mysterious “keys.”  With all the thoughtful strategy, market analysis, and product development that happens around “customer” projects you will hit a wall if you don’t deal with these two items up front and with painstaking detail. 

Can you guess what “D Keys” I’m talking about?  Here they are:

  • Definitions
  • Data

Think about it.  If the people in your organization don’t agree on the definitions of the words you use, and don’t trust the data you use to define those terms, you’re bound to have a bit of mess on your hands.

For example, ask your colleagues to define these terms for your organization and see if you all agree:

  • New customer
  • Retained customer
  • Loyal customer 
  • Lost customer

I recently had fun with a credit union as we looked at data for closed accounts.  As we dove deeper into the data we had to reconcile what a member (customer) really is.  When we say member do we mean a household, an account, or a share?

Which takes us to the second D – data.  Once you have defined your terms, what are the sources of the data you are using to measure those terms or types of customers?  Do you have a single source for data, or do you rely on multiple data sources to give you a complete view of your customer?  If you have multiple sources of data, is each field defined the same?  In the credit union example, one data source was stored as household information, the other data source had it stored as accounts (a household can have more than one account…).  If all the people trying to work on this project didn’t realize this, we would be talking different languages.

I know this may be basic for some of you, but time and again, and to this day, I come across these Big D’s constantly.  If you don’t know to look for them, you can go pretty far into a project before you have to back-track and deal with them.  So deal with these Big D’s before you get a double dose of disaster. (OK, enough with the D’s)

Focus Groups – Are They Fruitful or Folly?

2-green-apples.jpg  As with most research techniques, there are many different opinions out there regarding the usefullness of focus groups.  Some find them extremely valuable, others find them a waste of time and a lot of money.  Maybe they are all correct.  Like any technique, it’s how you plan and execute that helps determine the outcome.  I conducted a focus group project last week with 18-25 yr olds on the topic of banking, web 2.0, and social media.  For myself and the sponsor it provided a vast amount of insight and has really helped provide direction for our project.  So what makes the difference between focus groups that are fruitful versus those that are folly?

First, it depends upon where you are in the product development phase.  I have found focus groups most valuable and most cost-effective near the beginning of product development.  It’s the point when you are looking for ideas, trying to understand motivations, and what is good and bad about current offerrings in the market. 

Second, preparation can make or break a focus group.  That includes everything from recruiting, to location, to moderator preparation.  I found this demographic of 18-25 yr olds hard to recruit, but with a little creativity we managed to get some really great participants.  Several want to stay involved and help us create the product!  Recruting includes your message, your topic, your incentive, and your time and location.   Moderator prep is a critical element.  I spend significant time researching the topic, meeting with my client to clarify goals, and creating the moderator guide that I will use during the session.  Many say that the moderator can make or break the focus group.

Third, all the prep in the world can’t help you if you don’t win their trust by being genuinely interested in their opinions and ask questions in the right way.  Focus groups aren’t about the moderator, they are about the participants.  To get groups going in the right direction I like to use these type of questions:

  • “One thing that I’m surprised no one has mentioned is _____________. Does it matter or not?”
  • “I recall that some of you mentioned something a little different earlier, and I wonder how things like ____________ fit into the picture?”

Be sure to have a good method for recording the session.  Be open-minded. You want to facilitate and at the same time be open to exploring directions that you had not thought about.  For example, one insight that came out of the web 2.0/social media project was that 18-25 years olds are somewhat different than Gen X, and very different than Baby Boomers in their approach to growing up and becoming adults.  That also has a big impact on how they approach their personal finances and banking services. 

It’s about timing, preparation, and moderator skills.  With those in mind, may all your focus groups be fruitful!