More critical than ever, consumers have become particular and discerning about brands. Consumers make purchasing decisions with brands that they feel are dedicated to giving back, particularly with causes they also believe in and support. We can all attest that we live in an age when customers and consumers have infinite options. It is easy to switch brands based on price and availability.
In this sense, there is an increase in traditional loyalty programmes such as loyalty points, discounts and rewards to woo customers. But today’s consumer has so many choices of where to shop. How times have changed. Organisations now realise that being a good corporate citizen can prove enormously beneficial all round.
Now let’s delve into the Corporate Social Responsibility (CSR) and Corporate Social Investment (CSI) phenomenon that has shaped the mutually beneficial relationship between organisations and societies in which they operate. Previously the terms CSI and CSR were used interchangeably, but have now been defined separately.
According to CSI Solutions, CSR refers to an organisation’s total responsibility toward the business environment in which it operates. CSR describes the broader solution to triple-bottom-line matters of the 3Ps – profit, people and planet; while CSI is one of the sub-components of CSR and aims to uplift communities in such a way that the quality of life is generally improved and safeguarded.
CSR runs both broader and deeper and gets beyond the corporation’s spend to the true spirit of the initiative. This is where a business refuses to use suppliers that take advantage of child labour. It could mean the company obtains its raw materials from sustainable sources and ensures that its sources are environmentally friendly. This then fulfils the company’s compliance to both CSR and sustainability requirements.
Besides being a Public Relations exercise, or a way to become media-friendly, CSI fulfils a company’s obligations to be compliant with legislature; and for some, they expect a return the investments they make into CSR. But Corporate Social Responsibility is the display of a company’s values.
Nevertheless, all firms engaging in CSR are pledging to conduct their business in ways which protect the interests of current and future generations. Fundamental to most CSR models for organisations are economic, legal and ethical responsibilities. Consumers believe that firms have a moral obligation to behave in certain ways. This might include a focus on issues like employee rights, health and safety in the workplace, product quality and safety, charitable work, education activities and environmental conservation.
Efforts in these and other areas of CSR often prove a worthwhile initiative for the company. Research shows that CSR can be more effective than advertising when it comes to attracting interest from consumers. Of even greater worth is its potential to enhance customer loyalty. This effect emerges as a result of ‘generalised reciprocity’, whereby customers reward an organisation for the indirect benefits provided to them when its CSR activities positively impact on their society.
Now few people will doubt the importance of customer loyalty to business organisations due to the addition to the bottom line. Loyal customers boost a firm financially through their willingness to spend more per transaction, make frequent purchases and provide positive word-of-mouth (WOM) recommendations and referrals to significant others.
It is widely acknowledged that loyalty becomes most powerful when it is comprised of both behavioural and attitudinal components. The blend of repeat purchase behaviour and emotional attachment to the company and its brands helps generate loyalty that is robust and enduring.
Recently, many Ghanaian companies are becoming more aware of their environment – including recycling, use of organic products, contributions to local charities and support for community projects. I have had the opportunity to be part of executing CSR projects for some leading Ghanian companies.
For instance, United Bank for Africa (Ghana) Ltd. contributes a part of its annual profits to education through their National Essay Competition, wherein three top winners are given grants of US$5,000, US$3,000 and US$2,000 respectively. Aside from this, the company also donates over 2,000 pieces of African Literature books to some Senior High Schools to boost reading culture. The total CSR budget under my control for that year was in the region of US$100,000.
Guinness Ghana sources about 61 percent of local raw materials – i.e., maize, sorghum and cassava used to produce its premium beverages – from 30,000 farmers in 11 of Ghana’s 16 regions.
Three years ago, I was part of a team that launched and executed activities for the 25th anniversary celebration of Gold Fields Ghana Ltd. As part of its anniversary celebrations, the mining company commissioned a 33km reconstructed road worth US$15million from Tarkwa to Damang for its host communities.
Other companies such as Voltic, Verna and Awake are also pushing environmental and health-related CSR activities, which is commendable. Research indicates that the impact of CSR on customer loyalty can be direct or indirect in nature. A range of different intermediaries have been identified; including customer satisfaction, consumer identification with the firm, trust and brand image.
Optimising the impact of CSR on customer loyalty should therefore be high on the agenda of companies. A focus on sustainable development offers a route toward achieving this objective.
Companies can create positive perceptions in consumer minds by using Public Relations and publicity to promote themselves as socially responsible. Another area could be the use of digital media and influencer marketing to further project the great work done by companies in the area of CSR.
To many consumers like myself, experiential and emotional benefits play a significant role in solidifying our loyalty. That’s when things like social causes and the charitable organisations that your brand supports enter the loyalty equation.
Your loyalty programme needs to be unique for your customers. Highlighting charitable causes is a great way to engage new members. These emotional moments go a long way toward delivering higher levels of brand loyalty.
Loyalty is developed over time and through a series of moments, such as emotional connections a brand makes with its customers.
What charitable causes could your brand stand behind that would be supported by your customers?
Customers who feel an emotional connection with a brand will recommend it more than those who don’t feel the same emotional connection. This kind of business-customer relationship can’t be achieved only through generic advertising and discount sales. It’s achieved through offering a unique customer experience and humanising your brand through CSR initiatives.
>>>the writer is a Public Relations Specialist