07 Sep CSR Only Works When It’s Genuine
A study published in the Journal of Marketing noted that corporate social responsibility can have its potential downsides: customers have a tendency to believe that CSR-prone companies typically charge higher prices, and oftentimes unfairly so. The study noted that in order to avoid this pitfall, it’s important for companies who participate in CSR to convince customers that they’re pursuing CSR for genuine reasons, and that profit is only a secondary concern.
As ESMT Berlin Knowledge noted, CSR does have its upsides: for example, studies have shown that customers usually feel “a warm glow” when they support companies that actively choose to give back or support a charitable cause. However, the Journal of Marketing study—authored by professors Laura Marie Schons, Sascha Alavi, and Jan Wieseke—sourced 4,000 customers concerning their perceptions on companies that engage in CSR, and the researchers found that some customers believe that companies use CSR as an excuse to charge unfairly high prices. Customers assume that companies increase their prices to cover the expenses related to CSR, therefore negating any charitable intentions.
The study concludes by highlighting that companies can avoid any CSR pitfalls by convincing customers that their CSR goals are entirely honest. Sometimes customers believe that companies pursue CSR efforts in order to remain relevant and ride the current sustainability trend—but companies can use PR campaigns and other marketing strategies to showcase their commitment to charity, therefore highlighting their genuine concerns regarding giving back. The study also noted that companies can offer a complete and public breakdown on their CSR expenses and funding efforts—this type of transparency is extremely effective and easy to implement. By doing this, customers can see exactly where their money goes, and it can also help customers to better understand why companies charge certain prices—for instance, some companies charge higher prices to not only cover CSR expenses, but to also simply stay in business.
In short, customers care about CSR, especially when it’s done for the right reasons. Companies interested in exploring CSR should consider implementing a zero-waste generation policy into their business model. Zero-waste is a cost-effective way to become sustainable, and Good360 specializes in helping companies create customized zero-waste strategies. In fact, Good360 helped JPMorgan Chase & CO. develop a unique zero-waste strategy that was extremely effective. To learn more, click here.