Do good works really have customer appeal?

In today’s world, more and more businesses are going into partnership with charities, sponsoring charitable events or finding other ways to support good causes. Many people feel a strong emotional desire to help others when they have the means to do so, but what does such activity mean for the company itself? Can it really attract more customers and increase customer loyalty? We look at the evidence and at what you should be doing if you want to make a success of it.

What the numbers say

First, let’s consider what research has to tell us. A study by Cone Cause Evolution found that 85% of US consumers view companies more positively if they support charities they like, and that 80% consider themselves likely to switch brands in favor of buying from such a company. Other studies published in the Journal of Consumer Research have found that consumers feel more positive about a company’s products when they admire its philanthropic stances, perceiving them to be of higher quality.

A 2019 study by Edelman identified 64% of US consumers as belief-driven – that is, motivated in their choice of companies by societal concerns. Mintel found that a similar number believe companies have a responsibility to give something back to society while, interestingly, only 42% believe that companies should keep their distance from controversial causes, a figure which gets lower as customers get younger. This is good news for marketers who like the attention that a bit of controversy can bring – the trick is to find causes that your particular customer demographic finds appealing.

Demonstrate responsibility

Whichever cause you choose, philanthropy is seen by customers and clients as evidence that a company cares about something beyond the bottom line and sees itself as a part of society rather than a separate entity. This establishes a responsible persona which in turn enhances that company’s perceived authority and expertise. It’s particularly important in a social context where people are losing confidence in the government to always do the right thing, sometimes looking to companies to lead the way. By defining a clear social role for themselves, companies increase trust and can connect with customers on social levels, which naturally increases loyalty. The relationship is then no longer purely transactional.

Promote your core values

One way in which companies can increase their social presence is by building up their brand personas. This helps customers to think of them almost as if they were people, and it’s one of the reasons why marketers increasingly talk about associating values with a brand. If you consider Malini Saba, Crunchbase shows that she has enjoyed great success as an investor in pharmaceuticals and real estate, two areas which have a very immediate connection to people’s day to day lives. By supporting health and human rights-related causes, she has solidified her personal brand, and she is also able to bring her business expertise to bear in her philanthropy.

By finding a cause which is a good fit for its core values, a company also gives the impression that it possesses a deeper understanding of what its customers value. This makes customers themselves feel valued and gives them a sense of being part of a winning team.

Get customers involved

When they buy from a company that shares their values and acts accordingly, customers feel as if they themselves are doing good. This is a very attractive prospect for them, and you can make it even more so by giving them the chance to get directly involved in value-driven activities. This can mean anything from having a collection jar on the counter to inviting them to join in a sponsored event or sharing petitions with them online. It’s human nature for us to bond with each other when we do things we care about together, and companies can benefit from some of that magic.

Don’t expect to get away with half measures

If you’re thinking about increasing this type of work within your own company, here’s a word of warning: it must be about actions, not just words. Consumers are very cynical about companies which talk a good line during public events or on awareness days only to be conspicuously absent for the rest of the year. They’re not impressed by mere window dressing, so any commitment must be serious. In fact, researchers have consistently found that one of the most effective tactics a company can use is to associate itself with one particular cause and support it on an ongoing basis, ideally in a variety of different ways, building up a strong association with it in the customer’s mind.

Ultimately, there is no doubt that philanthropy is good for business. When companies get it right, everybody is a winner.