For-profit companies traditionally operated within a set of rules dictated by the government, such as collecting and paying taxes or meeting state and federal regulations. Everyone accepted profit maximization as the goal, and it didn’t really matter how companies managed to achieve that mission.
Today, many judge companies based on their broader impacts and whether they contribute to beneficial change. It’s definitely a positive shift, but new businesses must strike a delicate balance: Too much of a focus on corporate social responsibility (CSR) for a new brand over the effectiveness of the product or service can actually damage brand appeal. Researchers at North Carolina State University found that consumers view new brands as less enticing when their key messages focus on CSR more than the benefits of their products, even if they donate money to good causes.
While consumers want to support brands that give back to the world, they are more concerned about the efficacy of new products. And who can blame them? Nobody wants to spend hard-earned money on a subpar product. When product quality is equal but one item comes from a company with a social mission, customers are more likely to choose the company with a focus on CSR, though.
Patagonia stands out as an excellent example of effective CSR. The company aggressively incorporates environmental causes into its corporate DNA — and its customer base is just as aggressively loyal. Volkswagen, on the other hand, went out of its way to greenwash its corporate image by promoting “clean diesel” while flagrantly violating federal emissions laws with nitrogen-oxide emissions (a smog-forming pollutant linked to lung cancer). The disparity between VW’s mission and its actions had steep consequences.
Finding the Right Fit
CSR should be authentic to the soul of an organization — it should not be an add-on or a marketing ploy. Before committing to CSR, brands need to survey potential customers and brand ambassadors to ensure they focus on the right initiative.
For smaller companies and startups, this could constitute a more informal process of casual interviews with a few dozen people coupled with the founders’ personal goals. Established companies will want to undergo more extensive research that includes surveys and in-depth focus groups with employees, customers, and potential customers. In both cases, companies must confirm that the CSR initiative resonates with potential customers while identifying any concerns that could alienate critical groups. Without genuine authenticity, it’s only a matter of time before an initiative fails — it’s imperative that the CSR mission resonates with the company, its staff, and its executives.
Patagonia earned plenty of attention in 2016 for donating 100 percent of its profits from Black Friday sales to environmental groups. By literally putting its money — more than $10 million, in fact — where its mouth is, Patagonia proved its dedication to protecting natural resources. Considering a large swath of Patagonia’s clientele is environmentally conscious, that single day of sales truly resonated with brand loyalists.
Once a company pinpoints the CSR initiative that meshes with its identity, its leaders must articulate the CSR mission internally and externally. That mission will likely evolve, but it should be authentic to ensure long-term success. A genuine effort at CSR initiatives can be a great way to motivate and empower employees.
Internal CSR messaging focuses on culture and creating a universal message across the company. Everyone should understand the overlap between the CSR initiative and the company’s mission, as well as how the initiative affects every employee’s role. Externally, brands must simplify this messaging into an easy-to-understand version for consumers.
I’ve had to tackle this challenge with my own company, 2920 Sleep. We have boiled down our CSR focus to three elements: a commitment to product quality, excellent customer service, and 1% for the Planet. We aspire to make high-quality, long-lasting products that will have a reduced environmental impact with lower return rates; take care of our customers with great service; and stay financially successful so we can channel one percent of our revenue to support organizations that protect the environment. Our commitment to product quality and customer service enables us to support our CSR initiative. This mission is driven by everyone at the company — from our leadership and marketing teams to our customer service department and our brand ambassadors.
More than anything else, brands should ensure the CSR narrative is a part of the corporate culture. Think again of the difference between Patagonia and VW. Patagonia’s founder, management team, and employees all actively support its mission. VW, meanwhile, has lost brand integrity and market share, and its executives face significant fines and possible jail time.
Consumers can spot the difference between pretenders and companies that are committed to a mission. CSR offers an opportunity to pivot a business from a purely financial operation to an organization that recognizes its ability to help a wider community in addition to meeting financial goals. With a balanced approach to CSR and business goals, companies can truly shine.
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