Dr. Bates Talkback: How corporate social responsibility boosts business

Dr. Andree K. Bates explains how focusing on corporate integrity and responsibility yields real business benefits



Integrity. Trustworthiness. Corporate social responsibility (CSR). The buzz around these words has reached a fever pitch in recent years, and they are increasingly imbued with significant power for the future of a business.

Along with quality products and services, companies must offer more to the marketplace today.

Customers want to buy more than a tangible object; they want to invest in companies they feel comfortable with and that seem deserving of hard-won cash and trust.

Corporate irresponsibility is a hot topic in our society.

The power with which corporations are vested means the capability for some terrific products and services, but also the potential for massive failure, disappointments and scandal.

Large corporations are understandably focused on shareholders as their main audience, since their investors are the direct beneficiaries of company success and those who bear the brunt of diminishing financial returns.

However, companies today also must look beyond shareholders to stakeholders.

The stakeholder group to whom to pay keen attention are those directly responsible for company success or failure: customers.

If customers dont trust your company, sales and profits will plummet.

And if they believe anyone else except the voices from your company, or catch even a whiff of compromised or absent integrity, the results could be devastating.

In a recent study, about one quarter of Americans felt there was nothing businesses could do to recapture their trust once it was lost.

And with the omnipresent scrutiny by regulators, lawyers, journalists, bloggers, and more, the potential for tripping up and losing that trustand businesshas never been more pronounced.

How can companies court, build, and maintain the base of customer stakeholders crucial for business success?

Focus on integrity

Concentrating on corporate responsibility and integrity may seem to represent a major drain on time and other resources.

Rather than spending time on building product portfolios that gain customers naturally, companies are investing time and money in boosting their image.

Opponents could say companies are then weaker and less worthy of attention. However, the opposite is true.

First of all, engaging in strategies to build/promote social responsibility and integrity is a trackable activity.

Comprehensive accounting of activities related to CSR and other efforts can be done and differentiated from those activities that directly focus on products, services, customer acquisition, and other traditional business building.

This means that time is not wasted or unaccounted for and is, instead, able to be harnessed.

Just like return on marketing investments, return on marketing integrity can be calculated.

Person hours and spending dedicated to CSR or other integrity measures can be encapsulated, and the returns are logical to separate from others.

It is important to remember that corporate responsibility and integrity also are worth focusing on and tracking because of the very real benefits that can result. (For one big pharma firms take on CSR, see GSK's approach to corporate social responsibility.)

The benefits of CSR

Focusing on what makes your company reputable and worthy of trust engenders attention from prospects, and can easily lead to increased sales.

Customers know authentic integrity when they see it.

A company that works to provide the best products and services possible, as well as engage in other respectable, important activities outside the marketplace, is one many customers are willing to conduct business with.

Engaging in integrity building/promotional activities, and measuring the impact of those activities, can help marketers learn why customers buy your products and become loyal.

What do customers value about the company?

Why do they trust the company enough to make purchases on a repeat basis?

These insights can provide powerful marketing messages for future campaigns and points to emphasize in CSR or other endeavors.

Boosting company integrity and responsibility, and publicizing it, offers a distinct competitive advantage.

To stand out in an extremely competitive marketplace, quality of products and services is key, but so are trust and reputation.

Companies that can leverage all of these things will be the most attractive.

By actively focusing on integrity and responsibility, companies can avoid the dangers of unanticipated blow-ups.

Integrity issues that become magnified by press and irate customers, like those experienced by Guidant Corporation due to product flaws, can cost a company billions of dollars.

Making integrity building/promotion a priority can prevent these potentially very costly problems.

Integrity and responsibility boosts a customers opinion of a company.

This can lead to more immediate sales and a competitive edge and also can bring long-lasting loyalty, brand devotion, and overall equity.

Its an investment in the long term that provides a very real future for your brands and overall business efforts. (For more on how a positive image can boost adherence, see Compliance and the corporate brand.)

Building a powerful program that promotes a companys integrity and responsibility helps drive image, sales, and more.

However, it also has hidden economic gains.

Consider a CSR program that focuses on leaving a smaller environmental footprint.

That is a big public relations boost in a society increasingly concerned with going green, but also can lower energy costs, reduce waste management costs, and increase employee motivation.

Its a win-win situation of improved corporate profits, reduced overheads, and enhanced employee morale. (For more on business upsides of CSR, see Mals Musings: Its time for pharma to get serious about CSR and Mals Musings: A call for purpose-driven marketers.)

Methods for successful CSR

Implementing a successful program to boost/promote integrity and responsibility is dictated by specific company needs and goals.

However, a number of characteristics of a successful program exist.

Authenticity: Nothing backfires quicker than a token effort at corporate whitewashing, done solely for profit. And that is a sure way to alienate customers and prospects.

Accuracy: Programs focused on integrity and social responsibility must be authentic and, therefore, must accurately reflect the company.

If the efforts come from one isolated department and are not part of the company culture and strategy, they wont be taken seriously.

The goal is to make integrity and responsibility part of the way your company does business day in and day out.

Assessment: Measure the impact of activities built around integrity and responsibility and then associate them with external standards or audits.

Make the measures transparent and goal-orientated.

This aligns company efforts with a greater cause and lends credence to claims of integrity.

Corporations today must realize that, in addition to stellar products, customers want and need more.

The trend towards corporate responsibility and visible, transparent integrity is influencing how customers spend and is directly related to business success.

Focusing on integrity and responsibility is an investment for companies, but one that can yield very real benefits now and in the future.

Dr. Andree K. Bates is CEO of Eularis, which applies analytics to determine the sales impact of marketing programs.

For exclusive business insights into KOLs, attend KOL and Stakeholder Engagement Europe 2012 on February 21-22, 2012 in Berlin.

For more articles on KOLs, see Special report: KOLs and pharma.

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