Tag Archive for: corporate social responsibility
Companies are learning that good customer loyalty is a vital part of their business. It’s no longer enough to rely on new prospects; companies are recognising the importance of repeat business and customer advocacy.
What is Customer Loyalty?
Customer loyalty is an attitude and behaviour where customers favour one business brand over others. Usually, a company earns customer loyalty through satisfying the customer’s needs and requirements, whether it’s a service or product (or both!). It can also be born out of a sense of familiarity with a brand’s image, and, more and more, a company’s corporate social responsibility.
Also read this article for more information: How To Improve Customer Experience
Why is it so important?
The Gartner Group discovered that 20% of existing customers generate 80% of a company’s profits. This is backed up by marketing data, which reveals that selling to brand new customers if only 5-20% likely, versus a whopping 60-70% for current customers.
That is customer loyalty at work.
A customer who has previously been satisfied by the quality of a product or impressed with the level of customer service, is more comfortable with the brand in question and as a result is far more likely to purchase again. And recommend that brand to others, enter customer advocacy.
What drives Customer Loyalty?
People tend to be driven by emotions. Customer loyalty comes from the emotional response to a successful business transaction. Are they happy with a product? Happy enough to come back and buy again? That ‘happiness’ is the driving factor, and must be maintained over time to stop the relationship from deteriorating.
There are many emotions and states of mind that play a part in this. On the whole, however, the following four take the lead:
1. Appreciation & Gratitude
These two emotions go hand-in-hand. A grateful customer is a loyal customer. They feel appreciated by the business because they’ve been looked after. In turn, they appreciate the business for performing up to their expectations, a great way to win customer loyalty!
2. Comfortable
While not strictly speaking an ‘emotion’, this has to do with how comfortable customers are with a brand’s image. It’s about familiarity. People are more likely to use a brand they recognise and know to be ‘safe’ than step out of their comfort zone to try something different. This isn’t just about big business; today, with the Millennial consumer focussing on corporate social responsibility, smaller businesses with strong ties to the community, for example, have the power to outperform the large businesses in this area.
3. Surprise!
Surprising a customer – in the right way – can ensure that a business stands out in a crowd. Being different is important to outdo the competition. More than that, however, surprise is one of the strongest emotions to tap into when it comes to maintaining customer loyalty as it will keep brand messages from going stale.
4. Inclusion
People like to feel as though they belong and are part of a community. Being able to generate the feeling that customers are included in decisions, ideas, festivities, is a great way to increase customer loyalty, and a good way to stand out from the crowd. People are less likely to swap businesses if they feel like they are part of a family.
Of course, these aren’t the only emotions driving customer loyalty. People are too complex for us to assume that everyone reacts the same way or wants the same thing. Some of us just want to walk into a store and buy a pair of shoes, or a sundae, without being bothered that it’s not our ‘usual store’. But, let’s be honest, we do get a nice buzz when we walk into our favourite cafe and the barista goes “Hi, Sam, the usual?…One pumpkin-spiced double-frothed skinny latte, extra hot, extra large, with cinnamon dusting, to go, coming right up!”.
The quest for corporate social responsibility goes on. In a world where we are now combating more crisis and global issues than ever before, it has become imperative that companies lead the way towards a sustainable future for society and the environment.
Corporate Social Responsibility: what is it?
Corporate social responsibility – CSR for short, or “for pretty” as my aunts would say – is not just about lowering a company’s carbon footprint and saving the world from global warming – though that is certainly part of it! CSR also demands that companies no longer turn a blind eye to the social issues of the world such as poverty, unemployment, healthcare, and education.
The concept behind corporate social responsibility is fairly straightforward: everyone is part of the world, and everyone should be helping build its future. By ignoring issues, social, economical and/or environmental, individuals or companies are making those issues worse. The message is simple: take responsibility, and if you’ve got the power, it’s your responsibility to to help solve the world’s issues.
Also read this article for more information: How To Improve Customer Experience
How does Corporate Social Responsibility impact a company? aka. Why are we so focussed on Millennials?
Studies have shown that companies with a solid reputation as being a socially responsible business are more likely to attract Millennial customers. And believe us when we say you want to attract them; Millennials are today’s consumers and are rapidly becoming today’s leaders, if we don’t take steps to engage them our companies are bound to crumble and fall.
In a previous article, I’ve touched on their importance, but to summarize the ever-important subject, we should know that Millennials are the ‘always connected generation’ which is a nice way of saying that we – because I’m one of them – don’t have the excuse of shutting out the world’s problems thanks to the Internet and our inability to survive without social media.
Defining the Millennial generation is fairly straightforward, and so far the best definition I’ve come across came from LinkedIn’s Alex Rynne in the introduction for her Millennial Playbook:
- You grew up with the Internet
- You didn’t see any of the first three Star Wars movies in the theater
- You were in elementary school (or kindergarten) when grunge was popular
- You don’t remember leaded gasoline or smoking on airplanes
[…]Odds are you were born between 1980 and 2000.[…] According to Gen Xers and Baby Boomers, we’re lazy, entitled, thin-skinned, and always distracted. We require constant positive feedback. We can’t function without three screens in front of us at all times.
Estimates for the buying power of the Millennial generation sits around $1 Trillion – yes, that’s trillion with a ‘t’. For marketers and salespeople, Millennials don’t buy into the ‘traditional’ tactics we were taught in school. On the contrary, according to many studies – like this one – they’re not swayed by advertising and they’re likely to research a product or survey before they buy it. More than that, they are more likely to trust a brand they know has a solid socially responsible reputation than one they know nothing about.
In other words, we’re not very far off from having only Millennial customers, and those Millennials take CSR very seriously; so seriously, in fact, the 2013 Cone Communications Social Impact Study shows that when companies support social and environmental issues, Millennial consumers respond with 91% increased brand trust, 89% increase in brand loyalty, and an 89% increase in the likelihood to buy companies’ products and services.
Corporate Social Responsibility isn’t just about the PR
Let’s be really honest for a moment: humanity and the planet could use the help. If all companies did what they could, even on a small scale, the world would be a better place.
If we’re extra honest, however, I think we can all look at our feet a little and shuffle around the fact that a lot of us actually don’t really care about the issues, and we’re actually chasing the PR behind corporate social responsibility. Let’s face it, it looks really good when you can say “We fund research to cure cancer!”.
Actually supporting that research is great, but shouldn’t this be about actually finding the cure for cancer rather than just the warm and fuzzy feeling we get from knowing that we’re actually being responsible?
Technically, motives shouldn’t make a difference: after all, as long as the research (for cancer, or to combat global warming, or eliminate starvation in Africa) gets done, should it matter why donate or drive that research? 10% of PR-motivated research funding is still more than 60% of nothing. Should it matter what motivates a company to do the right thing and take responsibility?
Maybe not.
But think about it for a minute. If there’s one thing I’ve learned from popular television drama: the truth always gets out. Perception of the truth is a great thing, but all it takes is a whiff of hypocrisy and the brand is instantly damaged.
Take the Volkswagen carbon emissions scandal for example. They may not have been lying outright about the numbers, but now that The Truth™ – and its many versions – has come out, there’s no denying that their reputation – and their sales! – have taken a hit. How long before they make a full recovery? Can they?
Corporate Social Responsibility + Sustainability = Happy Planet, Happy Society, Unbreakable Company
Which leads directly into the big issues of sustainability.
A sustainable company will outlast all the other companies out there (because it’s self-sustaining! Obviously.). A company with solid CSR policies will naturally develop a better level of sustainability. We’ve established that Millennials will buy from a company with a strong CSR reputation; those same Millennials prefer to work for the same types of companies, and given that they make up the largest percentage of the workforce already, this is not something to sneeze at.
Recruiting, managing and retaining Millennial talent is a subject worthwhile of its own exploration!
To be responsible, or not to be responsible…
We might sit here, behind our desks, twiddling our thumbs about the whole thing. Why bother? If we can’t decide on a cause we actually believe in, should we still chase this down just because of the PR?
My argument would be: yes. Even if your company doesn’t actually believe in a cause, there are plenty of things in the world that need fixing, and every bit help. But I’m a pragmatist and I believe that money’s money, as long as what needs doing is getting done then what’s the problem?
There are plenty of people who would disagree with me, and being a Libra, I understand where they’re coming from.
The point is: human nature dictates that if we truly believe in a cause, then we’re not just tipping our hats, but we’re feeling the need that drives us to support it. That awareness, that motivation, is the essence of what will really change the world.
For a company to be truly responsible on a corporate level, the people behind that company have to be aware of the world’s issues.
And any problem can be fixed as long as people realize it’s a problem first.
