The proven power of CSR on customer and brand loyalty

Phoebe Pappoe, Public Relations Specialist

More critical than ever, consumers have become particular and demanding of brands. Consumers make purchasing decisions with brands they believe are committed to giving back, especially with causes they believe in and also support.

We can all attest that we live in an age where customers and consumers have endless options. It’s easy to switch brands based on price and availability.

In this sense, there is an increase in traditional loyalty programs such as loyalty points, discounts and rewards to entice customers. But today’s consumer has so many choices of where to shop. How times have changed. Organizations are now realizing that being a good corporate citizen can be hugely beneficial in every way.

Let us now consider the phenomenon of corporate social responsibility (CSR) and corporate social investment (CSI) that has shaped the mutually beneficial relationship between organizations and the society in which they operate. Previously, the terms CSI and CSR were used interchangeably, but have now been defined separately. According to CSI Solutions, CSR refers to an organization’s total responsibility towards the business environment in which it operates. CSR describes the broader solution to the triple bottom line issues of the 3Ps – profit, people and planet, while CSI is one of the sub-components of CSR and aims to uplift communities so that the quality of life is generally enhanced and saved.

CSR is both broader and deeper and goes beyond company spending to the true spirit of the initiative. This is where a company refuses to use suppliers who profit from child labor. This could mean that the company obtains its raw materials from sustainable sources and ensures that its sources are environmentally friendly. This then fulfills the company’s compliance with CSR and sustainability requirements.

As well as being a public relations exercise or a way to become media friendly, CSI fulfills a company’s obligations to comply with legislation and for some they expect a return on the investments they make in CSR. But corporate social responsibility is a display of a company’s values.

Nevertheless, all companies engaged in CSR are committed to conducting their activities in a way that protects the interests of current and future generations.

Economic, legal and ethical responsibilities are fundamental to most CSR models for organizations. Consumers believe that companies have a moral obligation to behave in certain ways.

This could include a focus on issues such as employee rights, occupational health and safety, product quality and safety, charitable work, educational activities and environmental preservation.

Efforts in these and other areas of CSR often prove to be a worthwhile initiative for the company. Research shows that CSR can be more effective than advertising when it comes to generating consumer interest. Its potential for customer loyalty is even more valuable. This effect results from “generalized reciprocity” whereby customers reward an organization for the indirect benefits provided to them when its CSR activities have a positive impact on their society.

Now, few will doubt the importance of customer loyalty to businesses due to the addition to the bottom line. Loyal customers financially boost a business through their willingness to spend more per transaction; make frequent purchases and provide positive word-of-mouth (WOM) recommendations and referrals to significant others.

It is widely recognized that loyalty becomes more powerful when it includes both behavioral and attitudinal components. The combination of repeat purchase behavior and an emotional attachment to the company and its brands helps generate strong and lasting loyalty.

Recently, many Ghanaian businesses are becoming more environmentally conscious, including recycling, using organic products, contributing to local charities, and supporting community projects.
I had the opportunity to participate in the execution of CSR projects for some large Ghanaian companies.

For example, United Bank for Africa (Ghana) Ltd dedicates part of its annual profits to education through its National Essay Competition where three top winners receive a grant of US$5,000, US$3,000 and US$2,000. USD, respectively. In addition to this, the society is also donating more than 2,000 books of African literature to selected high schools to boost reading culture. The total CSR budget that was under my control for the year was approximately $100,000.00.

Guinness Ghana sources around 61% of the local raw materials, i.e. maize, sorghum and cassava used to produce its premium drinks, from 30,000 farmers in 11 of Ghana’s 16 regions.

Three years ago, I was part of a team that initiated and executed activities for the 25th anniversary celebration of Gold Fields Ghana Ltd. host communities.

Other companies such as Voltic, Verna and Awake are also pushing CSR activities related to environment and health, which is commendable. Research indicates that the impact of CSR on customer loyalty can be direct or indirect in nature. A range of different intermediaries have been identified, including customer satisfaction, consumer identification with the business, trust and brand image.

Optimizing the impact of CSR on customer loyalty should therefore be high on the corporate agenda. The focus on sustainable development provides a pathway to achieving this goal.

Businesses can create positive perceptions in the minds of consumers by using public relations and advertising to promote themselves as socially responsible. Another area could be the use of digital media and influencer marketing to further project the great work companies are doing in the area of ​​CSR.

For many consumers like me, experiential and emotional benefits play an important role in solidifying our loyalty. This is where things like social causes and charities your brand supports come into the loyalty equation.

Your loyalty program should be unique to your customers. Promoting charitable causes is a great way to engage new members. These emotional moments go a long way in delivering higher levels of brand loyalty.

Loyalty develops over time and through a series of moments such as the emotional connections a brand makes with its customers.

What charitable causes could your brand support that would be supported by your customers?

Customers who feel an emotional connection to a brand will recommend it more than those who don’t feel the same emotional connection.

This type of business-customer relationship cannot only be achieved through generic advertising and discount sales. It is achieved by providing a unique customer experience and humanizing your brand through CSR initiatives.

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