Adopting corporate social responsibility (CSR) isn’t required by the law. But many companies do it anyway. CSR is the idea that businesses have a responsibility to society. From protecting the environment to championing human rights, companies can take on roles to become a positive force in society.
Harvard Business School has categorized CSR into three types: environmental, ethical, and philanthropic. Environmental responsibility is the belief that businesses should be as sustainable as possible. Examples of this responsibility are reducing plastic waste, using renewable raw materials, and increasing reliance on clean energy sources.
Ethical responsibility ensures that companies operate fairly and ethically. It can be fulfilled by eliminating questionable labour practices, offering a higher salary, or supporting local producers of goods.
Lastly, philanthropic responsibility refers to a business’s ability to make the world a better place. Donating, raising funds for a cause, and volunteer works are some examples.
At a glance, CSR appears like it has no benefits for the business other than a better image. After all, consumers respect companies that give back. But that’s exactly what makes CSR important. A bolstered image will allow a small business to grow fast.
The Impact of CSR on Your Small Business
You Can Charge Higher
According to Forrester Research, around 52% of U.S. consumers factor values into their purchase choices. In addition, Nielsen found through a survey that 66% of consumers were willing to pay more for products and services if the company was socially responsible. Another study, which was made by Cone Communications, found that 87% of consumers would buy a product because its company cared for the same issues they did.
Considering all of those, you can price your offers higher than your competitors and still expect a high revenue, thanks to your CSR. But if higher prices aren’t your brand, you can charge extra by selling bundles instead. For example, if you sell clothing in which part of the proceeds goes to charity, you can offer a discount for customers who would buy at least two garments. That way, customers can save money but donate more.
You Can Increase Foot Traffic
Financial institutions can increase their foot traffic if they offer financing to low-income consumers. For instance, if you run a small lending company, you can encounter more walk-in clients by providing affordable loans. You can even help boost the economy of a particular area. Affordable loans can encourage low-income individuals to start businesses. If they succeed, the livelihood in their community will significantly improve.
You Can Attract Employees Who Want to Change the World
Your CSR can attract job candidates with the vision the same as yours. This will enhance your talent pool, as you value not only skills but also advocacies. Employees who want to change the world don’t work just for the money. They’re passionate individuals who will help you reach your CSR goals. Of course, this doesn’t mean they’re fine with being paid less than they deserve. But still, you can count on them to stay if things get rocky in your business. As long as you’re working toward the same goal, they’ve got your back.
You Can Target a Younger Audience
Millennials and Gen Zs are the lifeblood of many small businesses, especially online ones. And since these generations are internet-savvy, they’ll spread the word about your business fast. Do good, and you’ll get positive user-generated content. Upset them, and your misdeed will go viral quickly.
Thus, your CSR will leave a lasting impression on these generations. Millennials and Gen Zs believe that companies should invest in improving society. They also like to partake in volunteer work or donation drives. If you organize a fundraising campaign, count on them to help you hit your targets fast.
You Can Share How You’ve Improved Society
Many companies and NGOs use CSR management software. It’s a platform that allows you to share details about your CSR activities and campaigns. The platform shows the progress of a specific project, such as the amount of funds raised or the number of volunteer hours rendered. This enables you to boost your CSR transparency. This benefits stakeholders, employees, and customers.
CSR Will Aid in Your Long-term Success
As your small business makes a name in the industry, its CSR will fuel its growth. In time, your business will be recognized not only because of its offers but because of its positive impact on society. Coca-Cola, for example, isn’t the healthiest drink, yet its beverages never stop selling. That’s party because of their 5by20 initiative, which aims to empower women across the world.
These may not even be half of what you can do after adopting a CSR. As your business grows, its capacity to give will also increase, positioning it toward a goal that can change more lives.