CSR and customer value

Feb 24 2011 by Brian Amble Print This Article

How can corporate social responsibility (CSR) activities enhance customer value? According to John Peloza, professor with Simon Fraser University in Vancouver and co-author of a new report for The Conference Board, "any purchasing choice is a trade-off between the need to satisfy an egoistic value and the sensibility to the social and environmental impact of personal consumption on the society at large."

The report points out four distinct forms of CSR-related value for customers:

  1. The efficiency of a product or service
  2. The aesthetic appreciation of consuming a product
  3. The social status a customer acquires from using a product
  4. The social or environmental benefit a community can derive from widespread dissemination of a product.

Leading on from this, it makes a number of recommendations to enhance the effectiveness of CSR activities on customer responses, including:

  • Prioritize product-related activities over philanthropy and business practices.
  • Ensure coherence of the activities included in a CSR portfolio to build a strong and recognizable "CSR brand."
  • Ensure consistent, long-term commitment to each activity in the CSR portfolio, especially when not product-related.
  • Make adequate use of marketing to enhance the customer value proposition of CSR activities.
  • Tie CSR to functional and utilitarian products.
  • Seek optimal level of CSR investment, and avoid over-investing.

"It is critical for a company designing a CSR program to embed different value components. Without that multi-faceted value, the trade-off won't be possible and there's risk that the customer won't respond at all to the CSR activity," said Matteo Tonello, Research Director of Corporate Leadership at The Conference Board.