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.


Do customers care if you are going “green?”

green_field.jpg  At last week’s monthly ACG meeting here in San Diego, the presentation title “Greening the Bottom Line” was delivered by Irene Stillings, Executive Director of the California Center for Sustainable Energy.  The disucssion focused on what companies are doing to make their facilities more energy efficient and the cost savings that they experience.  Along with her presentation, Ms. Stillings moderated a panel discussion with representatives for Johnson & Johnson, Qualcomm, and X-nth.

The message from Ms. Stillings is that there is a cost of indifference to going green, and to help companies get over their indifference, her organization offers both financial and educational support.  There are some really wonderful things these organizations are doing to lessen their impact and to be good corporate citizens in their communities.  I asked how they are sharing all this great stuff with their customers.  The only answer, which I expected, came from the Johnson & Johnson guy.  He said they have a Sustainability Report that is available that discusses the performance of their programs in this area.

So I wondered if that is all they are doing, do customers care if companies are going green?  Some will and some won’t.  All things being equal, some customers will purchase products from greener companies.  While others will go out of their way to purchase products from greener companies.   I was really happy to know what Qualcomm is doing since they have one of the biggest footprints of office space in San Diego.  But I couldn’t see them advertising that to those who buy their cell phone chips.

For some companies it will make sense to tell their customers what they are doing to go green.  For others the benefit may not be clear yet.  I think the biggest impact on customers for all these companies is through their employees.  Going “green” is here to stay, and employees of these companies should feel proud to work at companies that take it seriously.  That employee pride and satisfaction will spill over to customers.  Because to have satisfied customers you first need satisfied employees.  Yes, the cost of indifference is significant, and in more ways than most of us realize.