4 Reasons Why Social Responsibility Is Profitable

We feel compelled to weigh in on the sensationalized debate over whether or not your business needs a social mission. Entrepreneurial pundits like Kevin O’Leary are saying no, “Profit is the Mission.” Basically the argument says so much is required to keep your customers happy, you don’t have time to pursue a social mission.  We think this is a very short-sighted view. Long-term profits require a social mission.

This debate is exacerbated by simplistic thinking on both sides. As much as we would like to think that companies would choose a social mission out of the goodness of their hearts simply to make the world a better place, the fact is it’s just good business! Here are 4 solid business reasons why social consciousness is profitable in the long term:

1. Saves on Advertising. We chose social missions for our brand because we simply couldn’t afford commercial advertising. And after some success with what we called Worthy Cause Marketing, we continued with it as our only form of advertising. It was more efficient and targeted, and created more customer loyalty than commercial advertising. It gave our customers a social reason to buy our products rather than a mercantile reason. Sure, we wanted to make the world a better place but we didn’t have the luxury of doing that unless we were selling! How much money was saved as a result of supporting worthy causes?
2. Creates Brand Advocates. We took an expanded view of our responsibility to our customer. We not only provided products at the price, quality, and convenience they wanted, but we supported the groups and causes important to them. We viewed our customer a not just a consumer, but as a living, thinking, reasoning, and feeling human being with real social interests. Once they witnessed our support for their social causes, an interesting effect took place. While they could choose any product in our category, they chose ours. They also became advocates for our brand because they saw us a partner for their cause. So they passed the word to friends, neighbors, and colleagues. What is the business advantage of that kind of advocacy?
3. Reduces the Cost of Turnover. Soon we discovered that we had reduced turnover, which is the number one hidden cost of doing business. Turnover not only costs the advertising for a replacement, but the vetting, interviews, orientation, training, false starts, and all the lost business resulting from disrupted relationships. When we began to embrace social causes, our people developed a sense of pride working with a company that stood for more than the products it produced. Now they could help make the world a better place – at work! This gave them a social reason to stay loyal to our company. How much is reducing turnover worth?
4. Consumers Increasingly “vote” for Socially Responsible Products. The company that mistreats its employees and the environment is being progressively exposed by the new transparency. Your competitors want to “dig the social dirt” on your practices to distinguish themselves in your customer’s mind. Today’s customers know they are “voting” with their brand choices. Don’t set yourself up to lose their vote in the future. Think of social responsibility as an insurance policy. What is the cost of losing customers?

So it’s not a simple argument of “evil” guy versus good guy as the Inc. Magazine headlines. It’s more like wasteful guy versus prudent guy. There are just plain good and profitable reasons for taking an interest in your customer’s causes. Looking at the bigger picture can go a long way to improving the bottom line.