A look at how industry perceives corporate social responsibility.
Businesses that take an interest in social and humanitarian issues are praised for their positive contribution to society. Instead of being huge establishments that only care about their revenue and growth, corporate giving programs have changed the narrative of industries as a whole. In this article, we’ll look at how the industry perceives corporate social responsibility.
Customers Want Socially Responsible Companies
While not all customers care about whether a company is socially responsible or not, most customers do what to be associated with brands and businesses that are beneficial to society as a whole. There has been an increase in the number of socially responsible companies in the past few years, reflective of the customer’s desire to support purpose-driven brands.
If a brand wishes to begin a corporate giving program, it is essential to figure out what kind of cause its customer base would feel passionate about and then work towards incorporating that in the company’s narrative. Not caring about the customer base’s desire to support a good cause can backfire on the company and cause it to lose its following.
Different Types of CSR
There are many different ways in which a company can be socially responsible, so the decision to choose one type solely depends on what the company and its customers feel strongly about. Choosing a cause that does not resound with its customers will result in disinterested customers who do not wish to support the brand or its cause. Here’s a short list of some common types of CSR:
- Corporate philanthropy: Deals with promoting the welfare of a set of individuals through charitable donations and funding.
- Environmental CSR: Makes it a point to recycle their products and reduce their carbon emissions as a means of reducing the environmental pollution.
- Ethical labor: Focuses on the employees and making their lives better through competitive pay packages, parental leave, and child tuition reimbursement.
- Economic CSR: Focuses on giving back to society through paying their taxes and investing in the community for its upliftment and growth.
- Corporate Volunteering: Encourages its employees to volunteer during their workdays in nonprofit organizations.
Drawbacks of CSR
One of the main drawbacks in companies that are socially responsible is that not all their customers will be supportive of their cause. Some customers might tend to see more cost in their products than the benefits produced by CSR. Thus, this leads to the issue in prices, where some customers may feel that the benefits produced are not equal to the price they pay for it.
A study proved that high levels of CSR activity did motivate some customers to be more supportive of the business, while the pricing of the company put off some other customers despite the results they produced in CSR activity. To combat this, companies will have to convince their customers as to why the prices are fair and why it is necessary.
In addition to this, it is also important to let the customer know that the CSR costs are also cutting down the profits made by the company. With this knowledge, customers will be a little less skeptical about the price markups.
This article gives a summary of how corporate social responsibility is viewed and also highlights some of the advantages and disadvantages of having a company that supports a cause. While there may be some issues that can be seen as a drawback in CSR, the fact remains that a majority of customers prefer supporting brands that are socially aware and contribute to society by focusing on a cause that matters to them.