In this post, I am going to expose how the big companies are differentiating their business offerings using corporate social responsibility strategies, and how you too can deploy these proven strategies to grow your business and your reputation.
At the end of this article you would learn:
- how to use CSR to build brand reputation
- how to use CSR to grow your customer base
- how to grow sales using CSR
- how to communicate your social values to the world
Most new companies focus on developing a product/service that meets a need that no one else serves- or a believe they can meet this need better than others. This time the company is not thinking of social responsibilities, because it is engaged in the daily operations of running their business and competing. There may arise a need from a charity, political party or some other worthy cause that will approach the company for help. The company has a choice to respond to these request to satisfy the good opinions of those soliciting these funds.
In the business world ,most companies are resorting to benchmarking as a competitive strategy.By benchmarking I mean that if one company adopts a low cost structure in other to outperform the competition, in a very short time the competition will catch up, and also adopt a low cost structure as a response. What this implies is that the competition is usually alert and will copy your business strategies sooner or later.
Innovative companies are constantly searching for other ways to extend the value curve in their industries. One of such ways that most big companies do that is by leveraging the power of corporate social responsibility (CSR).
What is corporate social responsibility (CSR)?
It is usually, how companies manage their business operations and processes to produce an overall positive impact on the society. So what does this mean? Let’s consider this imaginary business “Cex Ltd” that manufactures face mask in a community. Cex ltd discovered that the members of that community do not have access to potable water. And Cex ltd decides to singlehandedly fund the installation of a pipe borne water system in the community, free of charge, as a way of ameliorating the sufferings of this community. This singular action of Cex ltd is an example of a corporate social responsibility (CSR). The company set up the pipe borne water as a means of giving back to the society.
The competitive margin of social value
Innovative businesses are pivoting and redefining the way brands are perceived in the market. They are recognizing that they could harness social values from the society and build their reputation in the market.
Have you ever wondered why some businesses are very active in this covid 19 era? Samsung has been in the news, it has donated over $29 million in fighting this covid 19 and given one of its offices in Korea to treat people with mild symptoms of covid 19 virus.This donations go a long way in portraying Samsung as a caring business and a strong brand too.Their host community and the world would remember this good deed.
Competitive margin of social values is a strategy where businesses move their focus away from the customers to the community and for the sustainability of the planet-the triple bottom line: people, planet and profits.
What major social areas can a company support?
There are no hard and fast rules in determining where /how a company can invest its resources in service to the community. But a much more practical approach is through consultation. By this I mean the company can reach out to stakeholders in the community and ask them how the company can help or share in their needs.This approach gives a win-win situation ,because both the stakeholders and the company would end up doing something that is a perceive need in the community.
Another way is for the company to use any of its digital platforms (social media handles) to reach out to its customers, asking them through opinion surveys what project to embark on.
Some social areas that a company can support include:
-ensuring health and safety of products
-not harming the environment
-treating employees fairly
- Ensuring health and safety of products
Some company’s products are detrimental to the health of the society. For example a company involved in the manufacture of Genetically Modified Foods (GMF) could decide to stop the production of such foods, so as not to predispose the society to untoward effects of such genetically modified foods. Stopping the manufacture of such foods is one way of showing that the company is socially responsible.
- Not harming the environment
The use of eco-friendly manufacturing processes is gradually gaining traction in the business world. Telsa is one company leading in the manufacture of electric cars that would not use fossil fuels to run. This it does to cut carbon emission and pollution in the society, thereby preserving the ecosystem. Another example is seen in the toilet paper industry. To make virgin pulp ,the toilet paper manufactures cut down trees and process the trees in other to get their virgin pulp, used in the production of jumbo reels (used by paper converting industries to make toilet paper rolls).The toilet paper manufacturers could decide to use recycled papers to produce these jumbo reels, instead of cutting down trees (deforestation).It would have achieved two things (a) mop up waste paper through recycling (b) preserving the ecosystem –not practicing deforestation.
- Treating employees fairly
The employees of a company could be treated well by their company in a way of giving back to society. They could design housing schemes for them or design programs that would ensure that their families are well taken care of –say a scholarship scheme for their children.
5 CSR STRATEGIES
Corporate Social Marketing
A company can decide to support a behaviour change campaign to improve public health safety. Most fortune 500 companies are pooling their resources to fight this covid 19 pandemic. They are crafting messages that encourage the implementation of the various nations’ Centre for disease control (CDC) covid 19 guidelines, such as social distancing, regular hand washing and the use of face masks. These are all examples of corporate social marketing. While they try to encourage the implementation of these behavioural changes,they are also putting their brand names out there, which will win them a good reputation in their industries in the long run.
This is the most popular initiative embarked upon by most companies. Here a company may decide to make a direct contribution to a cause in form of cash grants or donations. But the strategic approach to corporate philanthropy for a company is to tie philanthropic activities closely to the company’s business operations, goals and objectives. One company leveraging this strategy already is Nestle. She supports the Nutritional Science Foundation being a food company.
A company can allow its employees to embark on a community project or cause. For example a construction company can allow its employees to go clean up a blocked drainage system.Or a tech company could allow its employees to offer trainings on online course creation for youths and teachers in a community.
Socially responsive business practices
This a company can do by supporting a cause to improve community well-being and protect the environment. An example is for a company to find much more environmentally friendlier ways of disposing its waste. Maybe treating the waste and finding a means to recycle it instead of dumping them in the environment.
Cause related marketing
The amount of financial or material support for the specific cause or charity organisation by the company depends on the quantity of the product type the company sells in a given time frame. What this strategy implies is that, before a company signs up for a charitable cause in a community, it would agree with the stakeholders that it has to sell a certain quantity of its products, to be able to carry out the project. This strategy would help the members of the community to find ways of helping the company to liquidate the targeted stock, either by spreading information through word-of –mouth or patronage.
How to communicate company’s values and social responsibility
It is one thing to be a socially responsible company; it’s another thing to communicate to the world what you have done. Remember if you don’t say “I am” nobody would say “thou art”.
So, it is important that companies find ways to get their good works known to the public.
To do this, both the traditional and digital means of mass communication should be used by companies.
Traditional means of mass communication include:
Digital means of mass communication include:
HOW CAN CSR CONTRIBUTE TO A COMPANY’S GROWTH?
The company is better able to attract and retain world class talents
There would be people who would identify with the values of the company through their CSR commitment and
would be motivated to work for such companies.
Attracting more socially concerned suppliers and distributors
Financial analyst would be interested to know how a company is able to manage the competition and still have funds to invest in social courses. Such companies are usually recommended to investors to partner with. Also, certain suppliers and distributors who shares the same social sentiments with the company would be attracted to it.
Improvement of reputation
Customers want to be socially engaged and more interested in the community as well as the environment. Customers also want companies to reflect the customers’ values. Any company that engages in CSR would have an improved reputation in the community. An improved reputation allows the company to differentiate from the competition. A good reputation helps it have a customer base who are interested in the preservation of the environment.
By being better corporate citizens, businesses can generate goodwill among the community of stakeholders, which can pay off in terms of brand recognition, increasingly loyal customer base and ultimately higher earnings.
Strengthens brand positioning
CSR creates pre-conditions for positive perceptions of the company and the community’s attitude towards it.
Evidences suggest that share prices of socially responsive companies perform better than the benchmark market indices.
So,does the public know about your level of commitment to CSR? If not,would you want them to know more? How would you go about informing them?