Apologize via Corporate Social Responsibility

Being a good corporate citizen might lift the spirits of corporate staff. But to what extent does it lift sales? The answer from researchers at Indiana University, Georgia Tech, and Texas A&M. University is that it depends on whether audiences view the initiatives as primarily compensating for misdeeds or as primarily appealing for goodwill.
     Corporate social responsibility (CSR) refers to a broad range of actions intended to improve societal wellbeing. Funding a community orchestra. Maintaining a food bank. Cleaning a polluted lake. To qualify as CSR, the actions must be seen as voluntary rather than as being taken to comply with regulatory or legal requirements.
     The researchers categorized press releases issued by consumer packaged goods brands for a total of 80 CSR initiatives. Of the 80, 27 were considered as primarily emphasizing corrective actions to remedy societal harm; 19, compensating actions to balance out societal harm which continues; and 34, cultivating goodwill without addressing societal harm by the brand. Also collected were publicly available sales figures for the brands and for an equivalent set of brands not engaging in CSR initiatives. The sales figures covered one year before and one year after each focal brand’s CSR initiative.
     The data analyses revealed that corrective or compensating CSR actions seemed to increase sales, but actions primarily emphasizing goodwill were instead associated with a drop in sales. Follow-up studies pointed to the theme of sincerity as an explanation. What a profitmaking organization intends to be understood as a selfless initiative to combat homelessness or domestic violence, for instance, is often viewed with suspicion. You’ll derive greater sales boost from your CSR activities by positioning them as taking accountability for what your target audiences view as social misdeeds. Air pollution. Displacement of heritage businesses. Increases in obesity rates.
     Along with this, the study results indicate lower CSR initiative return on investment for brands already enjoying a reputation of consistent corporate social responsibility. Moreover, what counts as a misdeed depends on your business operations and can change over time. The researchers tell of Coca-Cola discovering how from a set of CSR candidates presented to focus groups, the favorite of the consumers concerned reductions in water consumption. My thought is that this might play better at times of anticipated drought than in other circumstances. In implementing the advice from the research, monitor what your target audiences are probably considering as most in need of apologies.

Successfully influence the most prosperous & most loyal consumer age group. For the specific strategies & tactics you need, click here.

Click for more…

Sustain Reservations by Showing Sustainability 

Sow Trade-Ins with Social Responsibility 

Apologize to Customers for Retailing Errors