Corporate Social Responsibility Can Enhance Customer Value

NEW YORK, Feb. 15, 2011 /PRNewswire/ -- Corporate social responsibility (CSR) activities have the potential to enhance customer value in many ways, The Conference Board said in a report published today.

Investing in CSR to Enhance Customer Value, the most recent installment in The Conference Board Director Notes series, includes a review of 163 articles about the relationship between corporate social responsibility (CSR) activities and financial performance. It finds that this relationship is impacted by many mediating variables, and that the metrics used to measure CSR vary widely.

The report points out four distinct forms of CSR-related value for customers: the efficiency of a product or service, the aesthetic appreciation of consuming a product, the social status a customer acquires from using a product, and the social or environmental benefit a community can derive from widespread dissemination of a product.

The report offers business leaders 10 recommendations to enhance the effectiveness of CSR activities on customer responses, such as:

• Prioritize product-related activities over philanthropy and business practices.
• Ensure coherence of the activities included in a CSR portfolio to build a strong and recognizable "CSR brand."
• Ensure consistent, long-term commitment to each activity in the CSR portfolio, especially when not product-related.
• Make adequate use of marketing to enhance the customer value proposition of CSR activities.
• Tie CSR to functional and utilitarian products.
• Seek optimal level of CSR investment, and avoid over-investing.

"Any purchasing choice is a trade-off between the need to satisfy an egoistic value and the sensibility to the social and environmental impact of personal consumption on the society at large," says John Peloza, professor with Simon Fraser University in Vancouver and co-author of the report for The Conference Board.

"It is critical for a company designing a CSR program to embed different value components. Without that multi-faceted value, the trade-off won't be possible and there's risk that the customer won't respond at all to the CSR activity," adds Matteo Tonello, Research Director of Corporate Leadership at The Conference Board, and director of the Directors Notes series.

Source: Investing in CSR to Enhance Customer Value, Director Notes, Volume 3, No. 3, February 2011.

About Director Notes

Director Notes is a series of publications through which The Conference Board engages experts from several disciplines of corporate leadership in an open dialogue about topical issues of concern to member companies.

About The Conference Board

The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501(c)(3) tax-exempt status in the United States.

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