Saturday, 27 October 2012

Corporate Social Responsibility and Your Customers.



I have recently been confronted, in my position at work by the issue of what I call conscientious purchase marketing. While I have some knowledge of the issue involving CSR (Corporate Social Responsibility) marketing principals I was confronted by the lack of reliable data surrounding this marketing concept. While this marketing approach is not new and the company I work for supports a number of charitable organisations it has recently been decided that our organisations USP (Unique Selling Proposition) is in fact our social mindedness/ responsibility.

To be honest at first I was bemused but as I have watched some in upper management embrace this new position I have become increasingly alarmed from a brand / marketing perspective. Our organisation, a manufacturing and consumer product based business has recently undergone work to become a 100 percent carbon offset company. While I support this move I have growing concerns that the management think that this position of social responsibility should become our USP and will think it will be a “silver bullet” to improve sales and our market position.

Recent market research undertaken by our organisation identified that our customers (with out prompting) highly valued our products and services and customer service. On issues such as our environmental position this ranked lower in terms of importance to our customers. We also tested the market to the fact that we were 100% Australian owned and this, while ranking lower than our products and services in importance ranked higher than our environmental position.

Feed back from non customers was equally lukewarm to the environmental / social issues. However non customers also did not value our products and services (obviously as they have not experience them). However what non customers did rate as high importance was price over quality and service, the Australian owned question followed by our environmental position rating lower down the list.

The position taken by management has been that anyone can say they have great customer service or great products and despite the importance of this in our customer’s opinion have decided that our USP should be our social and environmental responsibility / activities.

Taking a look through the available market research and public information there are numerous articles espousing the great benefits of this kind of marketing. However if you delve a little deeper it would seem that there is not all that much market research on the subject of CSR and the relationship between the consumer and purchasing decisions to warrant the level of faith in the practice. In fact there are very few who have looked at this issue with a critical eye in my opinion and time and time again in the few in-depth studies I found the same comment was made that” there was limited research available”.

When I started looking into business and their position on corporate responsibility and customer purchasing I began by looking at a few of the larger companies around the world like Microsoft. Knowing that as an organisation they have a strong CSR position I could not help but notice something. None of these companies general marketing material such as web sites talked about charities, CSR or causes that they are involved with. When you dig a little deeper you can find it but why is it not obvious? Thus my dilemma, our company has a strong product and we perform well against our competition. Market research identified we have a clear market position in our customers mind and our products and pricing are positioned in such away that we would be able to attract new customers based on those attributes.

Many of the research documents I have found talk about the value action gap. This is the gap between the customer concern of the issues and their willingness to pay for it. This brings into question the influence that a cause has over the purchasing of a product. Our own market research concluded that environmental issues (social issues) are a “nice to know and play a role when other benefits are aligned”. Or to put it another way; so long as we have our product and services, customer service and pricing right the social issues is a reassuring “nice to know”. Other research documents also talks about the role of education and CSR. Many conclude that with out education of the issues involved your support of a cause may make little difference to your customers. 

So why a USP based around this CSR approach? I get the good corporate citizen thing, don’t get me wrong and I can see that for some people it will have an influence on their purchasing decision and it should form part of our marketing message. But build your entire marketing on this as a foundation? I find it risky.

In a recent online marketing article titled Cause marketing has become ubiquitous and high risk. It was pointed out how there is a growing concern in marketing fields that the cause marketing approach was increasingly seen as a ubiquitous “last ditch” tool to capture market share and drive sales when all else has failed”. And that they “run the risk of being targeted as opportunistic by socially-conscientious consumers”. I find this particularly concerning given the consumers obsession with social media and the ability to go on line and voice an opinion on any number of online consumer sites about a product or service right or wrong.

What I don’t get is why you would focus 80% of your budget on an audience that may only make up less than 5% of your customer base at the expense of other marketing messages / opportunities identified as strong in your own market research.

I personally get the feeling with these types of campaigns that they are more akin to guilt marketing where a company tries to make you feel a level of guilt by not purchasing its products and services. Purchasing should be about pleasure at some level not guilt. I am sure that when a person goes to McDonald's to buy a burger they buy it for the level of pleasure that the purchase brings them whether it is the price, convenience or (god forbid) taste and not because of the charity they support. In fact we probably buy products from companies that support charitable organisation without even knowing it. However knowing that they support a charity is a “nice to know” and not a purchase driver. McDonald's don’t make a secret of their charitable endeavours but nor do hey make it 80% of their advertising message. In fact I would be amazed if it made up 5% or of their over all advertising message.

To me the companies that seem to make the most of their CSR positions are those who don’t make a “song and dance” about it but rather just get on with it just gently reminding their customers that “it’s a nice to know” and giving their customers reassurance that they are doing the right thing. 

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