How Corporate Social Responsibility Influences Buying Decisions

Corporate Social Responsibility

What is Corporate Social Responsibility?

Make money and make a difference: social responsibility has long been a part of many brands’ marketing strategies. From charitable giving to recyclable packaging, there’s a rising demand for socially conscious companies to put their money where their mouth is.

But why is it important? Social responsibility within marketing focuses on attracting consumers who want to make a difference with their power of purchase. This responsibility works in conjunction with actual socially responsible practices, as putting on an act to deceive customers can harm a brand’s reputation.

Supporting companies that share the same values

More and more consumers are wanting to buy from companies that they believe share their values. Millennials are one of the largest living generations and will soon surpass boomers, and they in particular value brand loyalty.

Supporting issues they care about

Many people see their buying decisions as a way to support issues they care about. When companies have values which align with consumers, this creates a sense of community and solidarity around their brand which is more likely to increase brand loyalty.

Prioritise those values over price

It’s true that no one wants to pay more than they have to for a product or a service: people will always pay what they can afford and what they think is a fair price. However, it’s now becoming apparent that people are willing to pay a slightly higher price for something that comes from a brand that’s socially conscious and aligns to their values.

Brand activism must be followed with action

Consumers can smell insincerity a mile off, so it’s vital that brands take stances on issues that are relevant to them. These stances need to be followed up by actions otherwise it can be seen as performative; examples being where they invest their money, what their executive team looks like and track record of certain behaviours and attitudes.


Types of corporate social responsibility

There are four main types of corporate social responsibility (CSR), and each in their own way can influence consumer buying decisions. It ultimately boils down to the values the consumer holds.


This value means to follow fair and ethical business practices across the board. It can include practices such as setting a higher minimum wage, ethically sourcing materials and ensuring employees have good working conditions.


This is a biggie – companies who are committed to CSR must engage in environmentally friendly practices. It can take many forms depending on the size and scale of business, and can be anything from using sustainable energy sources to installing a company wide recycling programme.


Intertwined with the other values, economic social responsibility involves making financial decisions that benefit the greater good, rather than just make more money for the company. This could be using a supplier that has sustainable materials, even if it costs more. It could also mean committing to a fair and transparent salary system that compensates all employees fairly.


Consumers want to see that businesses care about the communities they exist within. Following through with philanthropic responsibilities can include things like fundraising for a local charity or donating a percentage of the business profits to an important cause.


The need to be genuine

It should go without saying that the need to be genuine is vital for those businesses who want to be socially responsible. Many issues can crop up if this isn’t properly addressed.

Environmental issues: If a company doesn’t adhere to the practices it claims to, this can mislead consumers into acting unsustainably without realising.

Societal issues: Companies who want to increase profits by demonstrating social responsibility may over exaggerate their actions. Once this is exposed to the public, this can be detrimental to a brand’s reputation. This can get in the way of actual important initiatives.


Benefits of corporate social responsibility

Improving your CSR has a whole multitude of benefits, including those that influence buying decisions and improve your business performance overall.

Increase customer retention and loyalty

It’s much easier to retain customers than to keep winning over new ones. Once your customers have placed trust in your business and your product, they’re much more likely to remain loyal to your brand.

Improve bottom line financials

If stakeholders want to put their money where their mouth is, they will want to know they are making a good business decision. If they can see your organisation is continually working to improve not only financially, but making a positive impact both socially and environmentally, they will be more likely to invest in your business.

Increase brand awareness

Great corporate social responsibility can get excellent press coverage, as long as you are genuine in your mission. Creating an excellent CSR programme can boost your brand awareness and brand affinity.


How to put CSR into practice

So, what are some practical ways in which you can improve your company’s corporate social responsibility?

Incorporate it into your code of ethics

A business code of ethics can set in stone the ways in which it should be run, and the values that are important. In addition to other issues such as ethics and diversity, consider changing your documentation to include your societal and environmental goals as an organisation. This can then be filtered down through the company.

Protect the environment

Take time to develop policies and implement them to fulfil your business’s commitment to the environment. This could be anything from documenting your activities and their environmental impact, to producing annual sustainability reports to keep you accountable and see where you can improve. Our S-Factor product can help with is.

Protect your staff

Create a clear health and safety programme. This will allow you to put systems in place to help protect your employees, helping to prevent accidents and injuries. You can also put procedures in place to improve the rights and wellbeing of your employees, which will help with both attracting and retaining staff.


Consider the risks

People want to shop at places they feel match their values. This is particularly true of the younger generations such as Gen Z and millennials. Studies have shown that people are likely to stop shopping at a company that has been shown to support causes they disagree with.

You may alienate some of your audience: When your organisation chooses a stance on a particular issue, you risk losing customers that support the opposite side.

Answering questions you’re not prepared for: You need to ensure your PR team is ready for anything, so – once you decide on a stance – be prepared to do your research.


Measuring the effectiveness of corporate social responsibility

So you’ve done the hard work, how do you measure success?

It’s vital you do measure it as it can help you improve future decision making, and allows you to convey the importance to stakeholders.

Use the top performers as a benchmark

Look at the others in your industry. Who is doing particularly well? Using these organisations as a benchmark for great corporate social responsibility allows you to lay the foundation for your brand’s performance and could indicate ways in which to improve in the future.

Use KPIs

As with many other aspects of your business, KPIs are vital for success. Of course, every organisation is different and so will have different goals, but understanding these variables will help you measure your progress. To get you started, a few variables you could use within your performance reporting are employee perspectives, greenhouse gas emissions and health and security.

Industry standard measurements

Although there is no standard measurement across the board for CSR, there are industry standard tools which can help guide you in your journey. These include CommunityMark, a national standard that recognises excellence in community investment in the UK, or B Corp certification which measures a company’s entire social and environmental performance.

It can be hard to measure CSR, as benefits such as improved customer loyalty and brand reputation can be hard values to quantify. However, it’s vital you do measure it as it can help you improve future decision making, and allows you to convey the importance to stakeholders. If we say so ourselves, we are really good at grabbing the real human insight which fuels all of that strategising and decision making lots of us are faced with. Our favourite ways to do this is with our S-Factor tool – which helps companies go green by measuring and tracking brand perception, and comparing against key competitors – and with Flexi-Track – which allows our clients to know their market, including their customers’ perceptions better than anyone else. Quite simply, we’re really good at measuring brands because it is our day job!


Get in touch

If you’re interested in finding out how Spark could help you with your CSR agenda, visit our contact page and get in touch today.

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