Tag Archives: strategic CSR

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.

To compost or not to compost

So, I was going to write an article about Frito-Lay/SunChips’ new biodegradable bag (which I purchased for the first time last week), and to initiate a discussion about whether or not, from a cause marketing point of view, the company has done a strategic job of leveraging their CSR efforts to their best business advantage.  But when I sat down to read up about SunChips’ marketing process, I learned that the biodegradable bag had been yanked due to noise levels!

Indeed, I noticed right away that the bag was noisy.  Like a freight train actually.  But as an environmentally concerned consumer, I felt good knowing that I could put the bag in my green bin. In fact – I wasn’t much of a SunChips enthusiast before the bag hit the shelves.  I bought the chips because of the bag.  And I suppose that was part of the company’s motivation for introducing a compost-able bag in the first place.  Again, as an environmentally concerned consumer, I was shocked that feedback over the bag’s noise level would have been enough to prompt an overhaul of SunChips’ heavily hyped and costly compost-able bag rollout. 

So what exactly is going on here?  Why all of the corporate flip-flopping around a fairly compelling and cutting-edge green packaging initiative?  My best guess is that Frito-Lay determined (after an assessment of focus groups and initial reactions) that the bottom line business gain resulting from their CSR efforts (after all, lots of folks like me would have probably continued buying the chips in spite of the noise) was going to be eclipsed by the broader public’s reaction to the bag’s noise level.  In other words, good business sense trumped the company’s interest in doing good

Frito-Lay is going to reintroduce a quieter version of their biodegradable bag soon enough, so they haven’t abandoned ship altogether.  But there is a fundamental lesson to be learned – that is, CSR efforts must be strategic.  They have to integrate with the bigger business picture.  They have to consider the needs and interests of target markets and corporate stakeholders.  In other words, while they have to be authentic, they ultimately have to help drive business (and certainly not undermine it). 

Sounds like basic stuff.  Also sounds like Frito-Lay learned the hard way.

Passion Points:

  • When considering a CSR or sustainability strategy, don’t lose sight of the business bigger picture
  • Consider the demographic of your key stakeholder groups – what are their priorities and interests, how will they react to your CSR platform?

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.

CSR Harmony

Loblaw Companies Limited recently released its third annual Corporate Social Responsibility report titled “The Way We Do Business”, and true to form, the company continues to blaze trails in this arena. According to Galen Weston, Executive Chairman, Loblaw’s goal is to, “to meet the needs of today while preparing to address the social impacts facing Canada in the future.”

Loblaw’s CSR platform defines the nature of business which fuels a symbiosis that is exemplary.  “Doing Good” and “Doing Business” are enmeshed priorities that function as complements to one another.

Five pillars establish a corporate culture against which all business operations are measured: Respect the Environment; Source with Integrity; Make a Positive Difference in Our Community; Reflect Our Nation’s Diversity; and Be a Great Place to Work.

Clark Turner writes about the dangers of Greenwashing and counsels businesses on how to develop sustainability practices that are authentic and genuine.  And in fact all CSR initiatives (employee engagement programs, environmental projects, cause branding campaigns) should be rooted in genuine core corporate values.

If a company starts with a strong sense of its corporate identity – what it stands for, what its stakeholders care about, it’s vision for the future of the community it serves – than it is more likely that an authentic CSR effort will follow.  Too often, companies explore CSR and Sustainability practices as a knee-jerk reaction to stakeholder pressure, churning out programs that are ad hoc, and in no way a meaningful reflection of true corporate values.  We are seeing the implications of that process with BP and the oil spill.

Loblaw figured this out early on their process and they continue to reap the benefits on all fronts.

Passion Points

  • Let your corporate identity lead the way
  • Be true to your values
  • Practice what you preach
  • Make sure that your CSR practices reciprocally support your business model

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.

Baggin’ CSR

I am a shameless handbag addict. It’s a silly vice, really. But handbags make me happy. And considering their functionality, I think that my addiction is perfectly acceptable.

In addition to all of the CSR and sustainability blogs that I read every day, I also allow myself 20 minutes each morning to indulge in The Purse Blog. And the recent post about Botkier’s generous move to donate 50% of revenues from the sale of their Joy Satchel to charity got me thinking. Can the world of CSR learn something from handbag manufacturers?

Botkier’s move notwithstanding, handbag designers have made some bold CSR decisions as of late. Louis Vuitton, arguably the world’s most iconic handbag designer, announced a few weeks ago that it had signed a five year agreement with SOS Children’s Villages to create a program called “Partnership for Children’s Futures”.  The partnership will help children who are orphaned, abandoned or whose families are unable to care for them.

Though it’s a generous move, I can’t help but find the alignment a bit strange – coming from a luxury mega-brand that charges upwards of $2,000 for some of their more basic designs. (think orphaned children in remote villages juxtaposed against the LV patchwork tribute bag – that retailed for $45,000). Perhaps LV identified mothers as a priority market, and mothers naturally care about children. In that sense, it’s a smart partnership.

Beyonce with a $45,000 LV Tribute Patchwork Tote

Beyonce with a $45,000 LV Tribute Patchwork Tote

Handbag designer Mat & Nat offers a collection of design-centric, eco-friendly, vegan handbags and their entire business model is built on a very solid and creative foundation of social responsibility. The linings of their current designs are all made from recycled water bottles, for instance.

So I think that my handbag indulgence has taught me valuable lessons that can be transferred to the professional world of CSR.

Passion Points:

• Giving back is a universal notion that has become a baseline standard even in luxury markets

• Think about causes that will resonate with your customers and target markets

• In a best case scenario, establish a business model that aligns seamlessly with a CSR mandate

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.