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The COVID-19 pandemic has changed the way we think about corporate social responsibility (CSR), especially the importance of corporate action and philanthropy. It has also changed our understanding of how public events, like a health crisis or social justice movement, can influence consumer behavior.
Over the past two years, consumers have grown more conscious of where they shop. For millennials and Gen Z especially, reflecting personal values through everyday purchases has become a high priority. These generations prefer buying from companies that have responsible business practices, invest in causes, and stand up for social justice issues over those that do not. Companies that have embraced these trends are seeing extraordinary revenue growth.
Young consumers insist companies step up and take action. A body of research from HBS, Porter Novelli, McKinsey, and Deloitte show clear evidence with standout statistics like 88% of consumers saying that they would buy a product from a purpose-driven brand. 9 out of 10 millennials would switch brands and purchase products from one associated with a cause — and they will happily pay more if the brand is clear about its purpose.
While it is advantageous for brands to differentiate their market position in terms of their corporate purpose, it’s not just about having CSR policies in place for the sake of it. Brands that build strong emotional connections with their customers by adopting sustainable business practices and prioritizing social impact can see customer lifetime value increase by up to 306%.
Companies that ignore social responsibility trends do so at their own risk. Those that invest in authentic social impact initiatives outperform their competition on measures like revenue, valuation, and value creation. They have seen up to 20% more revenue and a 20% higher market valuation than low-purpose brands.
Consumer trust
Trust and loyalty go hand in hand when it comes to customer relationships. Today, consumer trust is built through consistency, transparency, and authenticity. Brands that value their stakeholders and the environment as much as they do profit more easily gain potential customers' trust.
Consumers want to use their purchasing power to make the world better. They also strongly desire to build connections with the brands they buy from. To open their wallet, they must trust that the brand they are buying from acts in the best interest of the environment and society as a whole.
Brand strategy
Investing in social responsibility is a great way to demonstrate your brand’s higher purpose and build deeper, authentic relationships with your customers. Social impact initiatives can be more effective than loyalty marketing and advertising. They can inspire more frequent purchases, increase the amount spent per transaction and raise company valuation.
The one thing beloved brands have in common is customer loyalty. These brands have built emotional connections with their audiences through corporate social responsibility initiatives that resonate with today’s consumers.
For example, &pizza, a fast-casual pizza chain with 60 locations in the Northeast, has grown its popularity through philanthropic programs. The brand enjoys its fair share of loyal customers, thanks to its effort to strengthen the communities in which it operates.
&pizza has baked social responsibility into its core values. One of its philosophies is to learn about the core social issues at each of its locations and partner with local causes to help create a positive impact. Michael Lastoria, co-founder and CEO, stated that the company is laser-focused on how they can continue to “support the things that are meaningful and impactful in these neighborhoods.”
During the COVID-19 pandemic, &pizza partnered with Citi to launch Hero Kitchens as part of their Hero Pie Program. The program showed appreciation to frontline workers by gifting them with thousands of free pies every day. With its wide range of ‘&’ initiatives, &pizza is way more than just a pizza brand. It is a brand of action.
By making a difference for the communities in which they do business, &pizza has shown their customers that social good is part of their DNA. The company’s brand and social responsibility strategy has played a vital role in its growth and success — they plan on opening 40 new stores by the end of 2022.
In this new era of transparent business, consumers want companies to live up to their promises and provide evidence of their sustainability practices. More than ever, it is important to demonstrate your company’s core values and set impact goals you can measure and achieve. Turn prospects into repeat buyers by involving them in programs for social good. They’ll feel like they are a part of something greater, and you will build strong relationships around your common purpose.
