Author Archives: Chuck English

CSR is no longer a bandwagon. It’s a standard.

The recently released Cone Cause Evolution Study makes it clear that in the eyes of consumers there can be absolutely no doubt about the importance of CSR. In fact, the data would seem to indicate that on many issues, positive attitudes to CSR have reached a natural zenith.

In the 2010 study, 85% of those surveyed said they have a more positive image of a product or company when it supports a cause they care about. That represents no change from a 2008 study that asked the same question but in a 2007 Cone study, 92% agreed with the statement.

Likewise in 2010, 80% said they would switch from one brand to another if the other brand is associated with a good cause. But in 2007, that number was 87% and in 2008 it was 79%.

Cone’s headline to the 2010 study was that Moms and Millennials are leading the way in CSR attitudes. In reality, millennial attitudes showed very little movement over time. In a 2006 Cone study on Millennials, 89% agreed with the “brand switching for a good cause” statement from above. In 2008, that number had dropped to 88% and in 2010 it rose to 93%. Once you factor in statistical probabilities, the numbers are close to identical.

One could try and make arguments to explain the rises and dips in these numbers but it seems to me that once the measured agreement with certain statements reaches particular levels, the movement in numbers is irrelevant. Whether its 85%, 89% or 92%, it is very clear that buying decisions are indisputably being made on the basis of the CSR profiles of products and companies. Would 95% be that much more impressive than 92% for example?

There is (at least) one sobering statistic that emerges from the Cone study. Only 19% of people said they would buy a more expensive brand because of its cause profile. So, while CSR is firmly a part of consumer thought, it may not yet be translating into action. But that number is likely on the rise and increasingly we will see CSR investment translating into revenue.

In our firm’s interaction with numerous companies and prospective clients, we find many that wonder about “that CSR thing” and whether there’s just a fad factor  – a bandwagon effect. The answer – that successful owners and managers have already discovered – is that the bandwagon has passed. A strategic CSR program is now a business standard and a necessity to effectively compete in the marketplace.

Passion Points:

  • CSR is not a passing fad. If your business doesn’t have a strategic CSR program, is time to develop one.
  • Those who have implemented CSR programs should be evaluating and improving. As CSR increasingly becomes part of buying decisions, the quality of CSR programs will have to keep suit.

The Humility Hurdle

Here’s a situation we’ve encountered a number of times. A business owner is very socially conscious and has actively brought that sensibility into the company. It has resulted in philanthropy or sustainability programs that are well developed and in some cases examples of best practice. Because of the owner’s personal ethos, there are many other aspects of the operation that in fact reflect exemplary CSR principles. These include promoting diversity, the support of charitable causes and ethical business practice.

However, when faced with a proposal to develop a more integrated and strategic CSR plan, the answer is a resounding no. Why? Because it will inevitably result in greater recognition for their socially responsible efforts – and she or he is uncomfortable with undue credit for what is considered to be “just doing the right thing.” In an age of seemingly unbridled corporate egotism, this is almost unbelievable but their enviable humility may be resulting in a disservice to their company and the community.

Perhaps the owner would relent if presented with some of the following benefits that could accrue if a CSR program was well built and strategically articulated.

The company’s employees would be better engaged. They would feel proud of working for a company that stands out, and they might share those feelings with prospective employees. They would be motivated to be a part of CSR efforts. Productivity, retention and the ability to attract top talent would grow.

Other companies will be encouraged to adopt similar practices. This would especially be true of supply chain partners.

There would be greater social outcomes. More organizations would benefit from more support – whether in money or time. In turn, this could result in more people being helped, fed or housed; in more treatment or even cures for those that are sick; or in greater advocacy, awareness and support for causes and communities.

The company could become more profitable. Consumer willingness to support brands that are more socially responsible has been well established. Even in B2B enterprises, buying decisions are increasingly influenced by CSR profiles.

While a CSR program will focus on the company’s efforts, it’s inevitable that some of the spotlight may be cast on the owner. Perhaps the solution lies in convincing him or her that overcoming the humility hurdle may ultimately be for the greater good.

Passion Principles

  1. CSR reporting should focus on the company or employee groups but not individuals.
  2. Consider the collateral benefits of establishing a CSR program
  3. Don’t underestimate the extent to which a well executed CSR program will drive business results.

Communication bridges the CSR Words vs Actions gap

Communications may be the key to understanding and developing the relationship between companies and consumers when it comes to CSR.

The Cone Shared Responsibility Survey that was released a few weeks ago presents some interesting data. To varying degrees, 65% of Americans believe that companies should be active regarding environmental and social issues. And in large numbers, consumers hold companies responsible for a wide range of issues including everything from alleviating poverty to ensuring that products are produced safely and in an environmentally responsible manner. So, it’s clear that at least as a matter of principle, consumers care about CSR.

But what about the practice? Well, here it’s not so clear. Consumers did indicate that if a company incorporated their ideas (presumably about social/environmental responsibility), over 50% of them would recommend the company, 54% would be more loyal toward it and 61% would be more likely to buy its products and services. But when asked what initiatives they would adopt to influence corporate social/environmental practices, less than half (44%) said they would buy or boycott a company’s product or services.

There seems to be a great divide between words and actions here. The truth is that while there is abundant data on consumers’ buying intentions relative to a company’s CSR platform, we don’t know that much about whether that translates into action

Recent reports from the American south might provide an answer. Local news stories are indicating that some BP stations are selling 500 fewer gallons per day. That’s certainly a result of the Gulf oil spill and consumers’ perception about the company’s environmental irresponsibility. But that may just be an extreme example based on a sensational event.

The Cone study may provide some insight. While consumers indicate they want to be informed about companies’ CSR performance and can even suggest the ways in which they would like that to be done (advertising, in-store, social media), they are, at best, confused by the messages they are receiving. And, in fact, they are very cynical. Fully 87% of respondents said that companies share positive information about their efforts but withhold negative information. 67% said they are confused about the messages companies use to talk about their social and environmental efforts.

It seems reasonable to me that if consumers don’t feel they can trust the information they have regarding companies’ CSR activity, they aren’t going to take action. Let’s not doubt whether CSR is a source of competitive advantage. Let’s do a better job of communicating.

Passion Points:

  • Ensure that your company’s social and environmental activities are effectively communicated through a variety of channels
  • Use social media tools to monitor what consumers are saying about your company
  • Be consistent. Ensure that what you say about your CSR activity is the same across all channels
  • Be transparent. Tell consumers about what you have done but also about what is yet to be done.

Green and Generosity – 2 New Envy Trends

There are significant CSR implications in Statusphere, the latest offering from trendwatcher.com – one of the world’s leading consumer trends firms. Based on the premise that “consumers are finding increasingly diverse ways to get their status fix,” it identifies five new areas in which consumers are vying for bragging rights.

One of them is Generosity. Perhaps as a reaction to the impact of greed on the latest economic meltdown, giving now trumps owing as a mark of prestige. Not only are consumers feeling a need to express their more altruistic side, they want to share the experience with others. Giving circles, crowdsourced giving and collaborative giving models abound. Online initiatives that allow individuals to choose the beneficiaries of corporate philanthropy are becoming increasingly common.

As it relates to CSR, many companies are recognizing that corporate philanthropy alone isn’t enough. A more strategic approach dictates a path of stakeholder engagement where customers are an integral part of the giving program – helping to make making decisions and given an opportunity to share experiences. (See Pepsi’s Refresh Project)

Another area identified is “Green Credentials and Unconsumption.” Increasingly consumers are anxious to demonstrate their “eco-credentials” to their peers. The latest ecological symbols and obviously eco-friendly products are taking on the status previously reserved for labels like D&G, Coach and others. And ecologically friendly services (from landscaping to roofing to banking) are taking on the same appeal. Just as in the case of Generosity, consumers are seeking the forums to tell the world they are truly green with envy. The days of the gas guzzling SUV as a badge of accomplishment are gone. Hybrid is the new hot auto label as consumers try to outdo their peers by consuming less.

Most companies have recognized that the green plank is essential to any CSR platform. The truly enlightened players are providing stakeholders with products and services that can express both the company’s and the individual’s eco-interests. Moreover, they are providing ways for stakeholders to share the experience by becoming actively involved and expressing their opinions. (See TD Friends of the Environment)

Passion Points:

  • Meaningfully involve employees and customers in your company’s philanthropic efforts.
  • Make sure your communications plan trumpets their successes and provides the forums for them to share their experiences
  • Ensure that your company’s eco-initiatives are well publicized and well-known by employees.
  • Wherever possible include a respected eco-certification with your green products and services
  • Provide employees and consumers with ways to be active partners in your ecological or sustainability efforts.

Cause Splash vs Cause Marketing

The not for profit world has been abuzz in the past few weeks about a cause marketing campaign gone bad. While bloggers and pundits (here’s a good  example) have been quick to lambaste the charity for its lack of judgment, the real issue is that the company opted for cause “splash” and not more strategic cause marketing/CSR decisions.

Here’s the background. Susan G. Komen For The Cure – this is the organization that pioneered the pink ribbon campaign in support of breast cancer research – entered into a cause marketing initiative with KFC. In a program called Buckets for the Cure, KFC is donating 50 cents for every “pink” bucket of chicken sold and is aiming to make the largest-ever single corporation donation (over $8.5 million) to breast cancer research. The problem is that one week after launching the campaign, KFC introduced a new product called the Double Down sandwich  – two pieces of fried chicken, bacon and cheese. The critics jumped on KFC for promoting an extremely unhealthy food product that can lead to obesity, which is a risk factor for breast cancer.

It is worth pointing out that despite furor in the blogosphere, to date the campaign has raised over $3.7 million and the website has inspired many people to share their breast cancer stories.

The real problem here is that KFC made a bad decision in its choice of cause marketing campaigns. The criticism of the campaign was foreseeable, particularly because KFC obviously knew when they were launching the Double Down sandwich. What’s even more striking is that the campaign doesn’t align with KFC’s business model. While it provides some temporary splash, in a year it will be forgotten because it really has nothing to do with what KFC does for a living. Contrast this campaign to other initiatives that are part of KFC’s CSR platform. The Colonel’s Scholars program provides scholarships enabling young people to go to college. This makes sense because KFC employs large numbers of high school students and the program aligns with founder Colonel Sanders’ legendary entrepreneurship; it focuses on “dreams and aspirations, and the perseverance to succeed.” KFC’s Animal Welfare Program is also well aligned providing expert oversight of the company’s practices and a supply chain component that includes farm audits.

Other examples of recently announced cause marketing campaigns illustrate the power of aligning with the corporate business model. Huggies (the diaper brand) has launched a program/site called HuggiesMomInspired.com through which it will provide venture capital to entrepreneurial moms.  Read more about it at http://bit.ly/d7QXty.  Barnum’s Animal Crackers recently launched a campaign that will see them raise funds to protect the endangered Asian tiger and raise awareness about endangered species.

Well-aligned cause marketing campaigns are more powerful because they become part of an integrated Corporate Social Responsibility platform. They provide greater opportunities for stakeholder engagement and are more enduring. Ultimately, they enhance the brand while allowing businesses to be good corporate citizens.

Passion Points

  • Cause marketing campaigns should align with your business model and should be just one element in an integrated and strategic CSR approach.
  • The most effective causes will relate to the products that you sell, the service that you provide, your articulated business philosophy or perhaps even personal philanthropic efforts of owners/executives.
  • Ensure that any upcoming marketing efforts won’t diminish the impact of prospective cause marketing campaigns.
  • Choose cause marketing campaigns that provide opportunities for employee engagement.

Technology reveals cause marketing truths

CauseWorld is a new iphone app that combines the cutting edge of location-based marketing with the power of cause marketing. Its newest initiative reveals the degree to which consumers want to be engaged and the importance that smart companies are placing on brand reputation.

Using GPS technology, CauseWorld provides you with a list of nearby participating retailers. By visiting the retailer and “checking-in,” users earn “karmas” that they can eventually direct to one of 15 causes. Companies like Citi, Kraft and Proctor & Gamble provide the funds that turn karmas into dollars for the causes. In exchange for their support, the companies are provided with opportunities for advertising and branded statements.

CauseWorld’s newest initiative allows users to earn karmas by scanning the bar code on consumer products like detergent, deodorant and mayonnaise. And that’s the part that is so incredibly revealing.

First, it demonstrates the degree to which consumers want to be engaged. The app requires the user to go out of their way to check in to a retailer or to scan the bar code on a product that they may or may not be buying. And to date over 300,000 people have downloaded the app and hundreds of thousands of dollars have been directed to the charities involved. The fact that users can direct their support to the cause of their choice obviously heightens the appeal but its still fascinating that so many people are prepared to go out of their way to do good.

Secondly, the companies involved clearly see the tremendous brand enhancement that is derived from participating in the program. Think about it. Kraft will donate money because someone picked up a jar of Miracle Whip and scanned its bar code whether or not it results in a purchase. But don’t for a moment underestimate the importance of the advertising and branded message opportunities that are part of the program.

While it would be easy to dismiss this as a world in which only hip iphone users and huge consumer goods companies get to play, any business would be smart to carefully consider what this means to the importance of CSR initiatives.

So, what can you be doing? Here are some Passion Points:

  • Develop ways in which customers or prospective customers can be engaged in CSR efforts. Allow them to choose causes to be supported. Provide opportunities for customers to have specially guided visits of participating organizations. Provide customers with login access to special sections of the causes’ websites.
  • Recognize how vital the brand enhancement derived from cause marketing can be to the competitive position of any business. More and more studies indicate that consumers make buying decisions based on their perception of a brand’s CSR efforts. At the same, ensure that your involvement in any cause marketing initiatives provide abundant opportunities for advertising, pr and media exposure. CSR efforts can be a key driver to improved business results but only if consumers know about them.

What Matters

More and more, companies are aligning with community causes, certainly because they’re interested in making a difference, but also because it’s proven to be good for business.  In fact, a poll of more than 25,000 citizens across 23 countries on six continents revealed that public perceptions of companies are shaped more by corporate citizenship than either product quality or business fundamentals (Reputation Institute, 2007).

So how do companies decide what matters most?  With hundreds of thousands of charitable enterprises, and an infinite number of causes to support, how does Joe CEO decide where he’s going to direct his company’s charitable efforts?

There are essentially two approaches to take.  One would reflect the more personal and intimate community priorities of the business’s leadership.  What do Board members care about?  Are there causes that have personally touched the CEO or other senior executives?  What causes are meaningful to employees?  This approach would ensure that a company’s community investment would be sincere, passionate, and borne from a true sense of caring.

The second approach really puts business interests first.  What does the company stand for?  What are its target markets, and what do people in those markets care about?  What kind of reputation does the company have, and how could a cause alignment be leveraged to enhance that reputation.  It’s no small coincidence that tobacco companies often publicly support programs that teach youngsters about the dangers of smoking.

In a best case scenario what matters to a company marries both of these two approaches.  A strong cause alignment is sincere and heartfelt; it engages employees and executives in a meaningful way; it enhances a company’s reputation and resonates with customers, and it drives bottom line business interests.

Passion Points

  • Identify a cause that genuinely resonates with your target markets, your leadership and your stakeholders.
  • Align with that cause strategically so that it aligns with your core business interests.
  • Use your cause alignment to your best advantage – to engage employees, drive sales, enhance reputation and develop consumer loyalty.