Corporate social responsibility (CSR), the term given to companies’ efforts to deliver economic, social and environmental benefits alongside great products and services, is not always a favorite topic in business meetings.
The idea of “giving back to the community” certainly has its appeal, and there’s no doubt that it makes for a great press release. But contributing to society at large is often a much lower priority for companies than turning a profit.
Improving the Company’s Brand
Being a socially responsible company can bolster a company’s image and build its brand. The public perception of a company is critical to customer and shareholder confidence in the company. By projecting a positive image, a company can make a name for itself for not only being financially profitable, but socially conscious as well. Also, by being active in the community, a company’s employees are engaging with potential customers and in doing so, indirectly marketing the company in the process.
Building relationships with customers is the cornerstone of a successful company and having a social responsibility policy can impact the buying decisions of customers. Some customers are willing to pay more for a product if they know a portion of the profit is going to worthy cause. Also, if a company is active in the local community – for example, a bank that offers loans to low-income families – the company will be viewed positively by the community and perhaps boost the company’s sales as a result. In short, building a positive relationship with customers and their communities can lead to increased sales and rising profits.
Retaining Top Talent
Many employees want to feel like they’re part of something bigger. Social responsibility empowers employees to leverage the corporate resources at their disposal to do good. Some public corporations’ employees number in the tens of thousands, and when they get behind an initiative, the results can be amazing.
Furthermore, being part of a strategy that helps the greater good can boost employee morale and lead to greater productivity in the workforce. Knowing a product and service is also helping with social causes can create a sense of pride and that pride shows in relationships with customers and fellow employees.
Helping Companies Stand out from the Competition
When companies are involved in the community, they stand out from the competition. Building relationships with customers and their neighborhoods helps improve the brand’s image. For example, Elon Musk, CEO of Tesla Inc. (TSLA) has bridged the gap between the corporate world and his socially responsible vision by offering electric-powered cars and environmentally friendly automotive products.