Build Loyalty by Taking a Stand

Expectations for corporate social responsibility (CSR), like so many parts of our social fabric, are evolving. Amid changing social perspectives, political upheaval, and increasing consumer demand for brands to demonstrate positive impacts on the world, CSR engagement is no longer a differentiator between companies, it’s the norm.

In The Lacek Group’s recent global research study, half of respondents indicate the importance of brand values has increased over the past few years. Furthermore, 92% of S&P 500 and Russell 1000 Index companies published reports charting their efforts related to CSR and sustainability in 2020. In 2011, that figure was below 20%. Consumers are making more deliberate brand choices, which suggests brand-purpose alignment is becoming a critical factor in brand loyalty. This is especially prevalent with Gen Z consumers, who are three times as likely to say that the “purpose of business is to serve communities and society” rather than “make good products and services.”

Today, acting in concert with their stated values is a must for brands, but expectations for how to do that are changing. Once limited to writing checks to food banks and making supportive statements during natural disasters, CSR has transformed to address a broader scope of issues. For many consumers—especially millennials and Gen Zers—silence from a brand on major issues is a dealbreaker, even on issues considered taboo just a few years ago.

Let’s take a closer look at four core issues that intersect with CSR.

Embracing diversity, equity, and inclusion

Creating a culture of inclusivity and representation has never been more important. In a recent poll, 57% of consumers reported they’re more loyal to brands that commit to addressing social inequities. That starts internally with meaningful representation at all levels of the organization. From a call center to the C-suite, a commitment to building a staff that better reflects society is imperative, but it’s really just the beginning.

George Floyd’s death at the hands of a Minneapolis police officer in May 2020 sparked an unprecedented response from American businesses. From small shops to major corporations, most brands offered public statements announcing their commitment to addressing racism within their companies and the country. And for good reason. In June 2020, 60% of Americans said corporations must take a stand on racial injustice. An equal number reported they would buy from or boycott a brand based on its response to the social unrest sparked by Floyd’s murder.

While some brands have been criticized for inconsistent follow-through in the two years since Floyd’s death, one brand largely living up to its commitment is Nike. The brand’s Don’t Do It campaign kicked off an ongoing company program to “be a leader in building a diverse, inclusive team and culture.” The company’s efforts include an investment of $1 billion in suppliers representing diverse populations; a goal of 30% representation of racial and ethnic minorities at director level or above in the U.S. by 2025; and a variety of partnerships dedicated to advancing racial justice. Nike’s website shares internal metrics for each defined goal and highlights its certification from MLT Black Equity at Work.

Addressing climate change and sustainability

With the global climate crisis intensifying and consumers growing increasingly leery of “greenwashing,” sustainability has become an important driver in purchase decisions. According to a recent study, 78% of global consumers feel environmental sustainability is important, and 50% rank it as a top-five value driver.

Companies face increased pressure from consumers to produce, package, and distribute their products in more sustainable ways. And more than two-thirds of consumers consider sustainability when making a purchase and are willing to pay more for sustainable products. This trend promises to continue as eco-conscious Gen Z gains more purchasing power.

Grove Collaborative, an e-commerce company that’s a certified B Corporation, sells eco-friendly household, pet, and personal care products. Grove built its brand on making environmentally friendly decisions easy for its customers. With strict sustainability standards for products and partner brands, a plastic-neutral model, and a commitment to be entirely plastic-free by 2025, Grove provides its customers with home delivery of a variety of eco-conscious products. And the model is working: When Grove Collaborative Holdings, Inc., made it’s NASDAQ debut in June 2022, its shares increased 68%.

Major corporations are increasingly invested in sustainability too. In fact, Fortune 500 companies continue to add chief sustainability officers in record numbers; demand for that role rose 228% over the past decade. And sustainability isn’t just beneficial for the planet. Shareholders are also seeing positive results. According to Barron’s fifth annual ranking of America’s Most Sustainable Companies, the 100 companies on the list outperformed the S&P 500 Index.

Speaking up about controversial political issues

Historically, brands shied away from public statements on political issues, such as racial justice, gun control, or LGBTQ+ rights. But in this new era of corporate political responsibility, silence is no longer an option for brands that claim to be socially responsible.

The ice cream brand Ben & Jerry’s has a long history of taking a public stand on issues often sidestepped by other brands. Among its stated core values are human rights and dignity, social and economic justice, and environmental protection. And while the company doesn’t shy away from strong statements on political issues (e.g., racial justice and gun control), according to CEO Matthew McCarthy: “Our activism work tends to focus on the root causes of social injustice which normally leads us to systemic issues. We are political but not in supporting any candidates.”

Other brands are increasingly entering the public conversation either by choice or as a result of external and internal pressure. Disney’s decision to delay a public statement about Florida’s Parental Rights in Education bill—more commonly referred to as the Don’t Say Gay bill—was met with criticism and boycotts from customers, and walkouts from employees. The company has since voiced its opposition to the bill and according to CEO Bob Chapek, Disney is “reassessing our approach to advocacy—including political giving in Florida and beyond.” The company has also signed the Human Rights Campaign’s statement opposing similar legislative efforts and pledged five million dollars to organizations working to protect LGBTQ+ rights.

In the wake of the recent overturning of Roe v. Wade, many brands responded quickly with statements and policies to cover expenses for employees to travel to another state to access healthcare. Other brands have remained publicly silent on the issue to date. It will be interesting to watch the corporate response adapt or expand as states enact new abortion legislation, and as related policies are debated leading up to the November midterms.

Treating employees fairly and equitably

With the effects of the Great Resignation still reverberating, corporate employment practices are in the spotlight, especially given the high-profile unionization and boycott efforts at Starbucks and Amazon. Companies must take a fresh look at employee engagement, recruitment, and retention—and how those policies align with and reflect corporate social responsibility.

Fair wages and working conditions have always been key considerations for potential employees, but in a culture of growing social awareness, they’ve become differentiators for customers too. According to a McKinsey study, how a company treats its employees is an increasingly important factor in customer purchase decisions. This insight is supported by Edelman’s Trust Barometer, which indicates nearly three in 10 respondents say how a company treats its employees is the most important factor in deciding whether to become a loyal customer and 27% say it is a primary factor in deciding whether to become a customer in the first place.

Retaining customers by implementing three best practices

Authenticity

Consumers have an increasing desire to purchase from brands that share their values and a corresponding expectation that those values be supported with actions and policy. Before issuing any statement, carefully consider how it aligns with your company’s mission, business model, policies, and practices. Consumers will notice if the values you promote are not lived within the company.

Transparency

Customers have shown a willingness to forgive an imperfect track record on social causes, but they’re less likely to do so if they perceive a brand is being dishonest about it. Brands have been called out for public statements supporting issues such as LGBTQ+ rights and abortion access while donating to political PACS and candidates whose policies are at odds with those statements. Instead, be forthright in how your company has handled social justice issues in the past and in your plans for addressing them in the future.

Measurability

Once your company commits to taking action on an issue, determine a set of metrics for measuring your success. This may be a combination of internal metrics, industry benchmarks, or certifications from outside agencies. Do frequent check-ins on your progress and adjust your strategy as needed.

It may seem daunting, but authentic CSR practices can improve financials, drive employee engagement, increase customer brand loyalty and retention, create branding and PR opportunities, and, most importantly, have a positive and lasting impact on the world.

Stephanie Hoch is senior copywriter for The Lacek Group, a Minneapolis-based data-driven loyalty, experience, and customer engagement agency that has been delivering personalization at scale for its world-class clients for more than 30 years. The Lacek Group is an Ogilvy company.