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Customers Increasingly Expect Your Company to Make a Difference
Doing good doesn’t have to hurt the bottom line.
- June 18, 2021
- CBR - Strategy
The news is filled these days with major corporations stepping up to—or being pulled into—various social and political stances. Coca-Cola’s opposition to Georgia’s new election laws is resulting in threats of boycotts, while Facebook is losing customers to alternative platforms since it shut down former President Donald Trump’s account.
Small and midsize businesses watching all this might be wary to support a cause for fear of losing customers. A recent survey by insurance company Aflac in 2020 all but confirmed the risks. More than half of respondents said it’s important for companies to take a stand on social issues, but about the same amount said they’ve stopped supporting a business because of its position on an issue.
Still, there are good reasons for a company to consider its options for supporting social causes. In that same Aflac survey, the vast majority of customers (77 percent) and investors (73 percent) said they are motivated by a company’s commitment to improving society.
Businesses can approach this as an extension of the support they already provide to their communities. They’re no strangers to donating prizes to church and school raffles, purchasing uniforms for youth athletics, and so many other worthwhile causes. Keep doing those things, and go further.
There are ways you can be responsive to the issues affecting your community and your customer base in a more active and comprehensive way. Rather than just taking inbound requests, seek out opportunities directly.
Evaluate your suppliers and outside vendors. If you want to show support for marginalized communities, consider minority-owned suppliers, service providers, accountants, and legal services.
Assess how you make hiring decisions. If your company’s leadership is predominantly white males, make an effort to recruit and promote female or minority executives. Examine whether the ways in which you advertise or screen for a position affect the makeup of applicants and look for opportunities to broaden your reach.
Give employees paid time off to dedicate toward skill-based volunteer work that extends the reach of your firm.
In the midst of a social movement, it takes more than words to win public opinion.In Corporate Responses to Black Lives Matter, Commitment Speaks Volumes
In choosing, pick a few consistent and targeted approaches that will best support the communities in which your company works.
Of course, as you go down this path, consider how you share with your stakeholders the support you are providing. Of growing popularity is certification as a B Corporation, which requires verification that a company meets standards for “social and environmental performance, public transparency and legal accountability to balance profit and purpose.” More simply, talking about issues you are engaged with in an annual report, company meeting, or with customers can be important to convey what you are doing behind the scenes and might get others invested in the same effort.
The point: These actions don’t have to be controversial. Your customers, employees, and investors are increasingly expecting your company to take an active role in bettering society. Doing so can be good for your community, and it doesn’t have to hurt the bottom line.
Christina Hachikian is clinical associate professor of strategic management at Chicago Booth.
This column is part of the Chicago Booth Insights series, a partnership with Crain’s Chicago Business, in which Booth faculty offer advice for small businesses and entrepreneurs on the basis of their research.
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