The Sustainable Business Model in 2021
Businesses should have a Corporate Responsibility strategy. Many organizations deem CSR to be an unnecessary cost and not important enough to spend time and resources on implementing a strategy. Their idea of a sustainable business model focuses solely around sales and marketing. Why should they have a CSR strategy?
The Consumer Perspective
First, let’s think from the perspective of the consumer. Consumers want to support companies that are addressing social and environmental issues. According to an international study conducted by Unilever, 33% of consumers are choosing to purchase products from companies that positively impact sustainability and community issues. Moreover, more than one in five would actively choose a product based on the company’s CSR credentials showcased on the packaging of their products.
Why is it important to consumers that companies are engaging in CSR activities? It could be that the consumer is affected by causes the business is supporting. Another possibility is peer pressure. Based on location and culture, people react differently to causes depending on the issues faced by society. For example, businesses that support human rights are more important to some demographics than companies supporting environmental causes.
Consumers also identify common traits in businesses. When a consumer sees common traits in a company they feel a stronger connection to the brand. They are, therefore, more comfortable and confident in purchasing products and services from the business. They feel more connected with the brand. Furthermore, consumers feel better about themselves when purchasing from companies that do good. Thus, businesses should have a clear strategy with regard to CSR and communicate it internally and externally.
The focus of the CSR strategy should not be to increase sales. The focus should be supporting a cause for the sake of doing good. Not being genuine can be sensed by consumers and have a permanent negative impact on a brand.
The Corporate Perspective
How about from the business’ perspective? Why should an organization support charities and causes? Well, there are plenty of reasons. Job seekers are increasingly paying attention to company CSR activities when choosing where to apply. Employees should feel like a part of the organisation. Top managers shouldn’t be the ones taking all decisions. The process of choosing causes to support should be democratic. When the employees are aligned with the cause of the company they feel more comfortable working there and feel a part of something bigger and meaningful. When the organisation and the employees represent common values, the consumers get a clearer message of what the company stands for. This way, the business has more loyal customers and attracts like-minded individuals and corporations to do business with.
If your employees, clients and partners all share similar values: you’ve created a community.
A CSR strategy is the foundation of a sustainable business model in 2020. The newer generations increasingly pay more attention to how companies use their “superpowers” to make positive changes to the world. Therefore, if businesses want to remain in business, it is important they start working on giving back to stakeholders. This not only leads to a good corporate image, but also to more loyal customers. If your customers are loyal and passionate about your business, it is more likely that they’ll share their positive experience with their family and friends. People believe their peers more than corporate advertisements. Word of mouth is the most effective way of making people aware of your brand.
There are plenty of reasons why corporates should be implementing a CSR strategy into their business model. Working toward a better environment and society is a win for everyone. It has evolved from being preferential to essential for consumers and employees alike.