Brand Building: Impacting Customer Loyalty Through Corporate Social Responsibility

What is the Brand?

Perhaps the truest representation of what a company is all about is not what product or service is sold, nor how, or for how much, that product or service is produced and sold for. No, the real definition of a company in today’s marketing climate is best understood when examining the company’s brand. Yes, the brand, which represents the core values of an organization.

Brands are promises that consumers believe in. These promises tell what a company stands for and the unique and valuable benefits that a company delivers. From the top of the buying funnel to the bottom, from general awareness through the buying process, brand is the key influencer.

It still holds true that brand recognition and relevance combined with consumer benefits and perceived value influence buying decisions. But, now more than ever, in a marketplace with increasing competition and less product differentiation, those factors alone are not enough to influence the most savvy consumers who are educating themselves about a company’s brand in a more enlightened way.

Consumers are looking to do business with companies that share similar ideologies and these consumers are investigating what a company believes in beyond the bottom line. Not surprisingly, more and more companies are paying greater attention to their Corporate Social Responsibility (CSR) and adopting strategic initiatives in an effort to better connect with their customers.

What is Corporate Social Responsibility?

The Financial Times identifies CSR as a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. http://lexicon.ft.com/Term?term=corporate-social-responsibility–(CSR)

Organizations like The World Business Council for Sustainable Development (WBCSD), which define CSR as the “commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” consider CSR to be an integral part of an organization’s day-to-day operations.

From an altruistic sense, it’s refreshing to hear companies concerned with bettering the world around them. But, make no mistake, this movement at its core is a marketing strategy to address a changing consumer landscape in which consumers are as concerned about the values of a company they are doing business with as they are about the products or services they are purchasing. Companies are evolving from a purely customer-centric approach to one that is more humanistic, by balancing corporate responsibility with profitability.

By the Numbers

A 2014 study titled The Nielsen Global Survey of Corporate Social Responsibility reports increased sales for brands with sustainability claims on packaging or active marketing of corporate and social responsibility efforts. The study which polled more than 30,000 consumers in 60 countries worldwide clearly reports that a “brand’s social purpose is among the factors that influence purchase decision.” Among the facts revealed in the study from respondents:

• 67% prefer to work for socially responsible companies
• 55% will pay extra for products and services from companies committed to positive social and environmental impact
• 52% made at least one purchase in the past six months from one or more socially responsible companies
• 49% volunteer and/or donate to organizations engaged in social and environmental programs

Additionally, “these consumers are more likely to buy products repeatedly from a company if they know the company is mindful of its impact on the environment and society.”

And, millennials (age 21-34) appear the most responsive to sustainability actions. Half of the global respondents in Nielsen’s survey who are responsive to sustainability actions are millennials.

To be sure, the traditional buying funnel still exists. But, it has expanded to include a company’s social impact which is increasingly affecting consumer behavior, trust and brand loyalty.