A company may be an independent legal entity in its own right, however, a company is built by people and works for people. There are many stakeholders involved starting from the employees, board of directors, shareholders, customers and most importantly, the community.
Here are a few reasons why your business should invest in corporate social responsibility initiatives.
Consumers expect businesses to be socially responsible
Our customers can be our most important stakeholders and the saying “the customer is the king” has never been apter. In the digital age, customers have a lot of information and can easily shift to a competitor if their needs are not being fulfilled.
This holds true, especially for Millenials. According to 2015 study, 91% of global consumers expect businesses to be responsible and proactive in dealing with social and environmental issues. 84% said they prefer buying products that were produced ethically.
Embarking on a solid corporate social responsibility campaign can help you to not only retain your customers but also attract more customers from this market segment.
Increased brand awareness
The first step in any marketing and sales campaign is generating brand awareness. Investment in brand awareness is crucial for the growth of small businesses. Even big established businesses often have to invest a vast amount of money to re-enforce and promote their brand image to existing and potential customers.
If you invest in corporate social responsibility projects and campaigns you can help your company’s brand become memorable and be respected by all the stakeholders involved. This increased brand awareness can not only help you reach to new potential customers but also engage with your current customers and build trust with them. This, in turn, can help you increase your sales and increase your revenue.
We, humans, are emotional beings and often make decisions based on our emotions. Customers would be more receptive towards your brand compared to your competitors if you are a company that tries to have a positive impact on the world.
Reduced operational costs
Did you know that investing in corporate social responsibility initiatives can help your business save money in the long term? Think about it, if you provide good health insurance to your employees, they are less likely to fall ill because they would get quality treatment. If you invest in technology that reduces excessive packaging, it would cut down your operational costs as well.
According to Francesco Perrini, Angeloantonio Russo, Antonio Tencati, and Clodia Vurro who are prominent researchers from the Bocconi University in Milan Italy, firms with established reputations as positive places to work can attract talented employees. Employees at organizations with positive CSR practices and ethical values are more committed to the organization and have greater job satisfaction. This can raise your employee’s morale and personal well being and increase their motivation.
It is a long-established principle that highly motivated employees are more productive. This can not only help your company generate more value and profits but also help you retain your talent and cut costs in recruiting and replacing your existing talent because they are more likely to stick with your company.
This would allow you to stand out amongst your competitors. As stated earlier, consumers prefer buying products from ethical companies that invest in corporate social responsibility. If you invest in CSR customers would definitely prefer buying your business’s products or services over your competitor.