When it comes to giving back, corporations got the memo years ago. In fact, 93 percent of the world's largest companies publish an annual report detailing their social responsibility initiatives.
But giving back doesn't mean giving away profits. Corporate social responsibility (CSR), a blanket term that can apply to small businesses too, often actually increases the bottom line. CSR programs can lift a company’s market value, compared to competitors, higher than 40 percent to 80 percent over a 15-year period, according to research from IO Sustainability and Babson College.
Here are five ways social responsibility is good for your business.
1. Consumers want to buy into a brand, not just buy from it
“Most consumers seek an emotional connection and want to feel good about how they spend their money,” notes Brian Hughes, founder and CEO of Integrity Marketing & Consulting in an Entrepreneur.com editorial. “Marketing the actions your company takes to respond to selected hot-button issues provides that feel-good experience for your customers, which can translate into an emotional connection with your business. This effort leads to brand awareness and customer loyalty.”
A recent Weber Shandwick/KRC Research study found that 46 percent of consumers “increasingly buy from companies that make them feel good and happy.” And millennials in particular believe it matters if “American businesses give back to society.”
2. Giving back is good for PR—and SEO
Participating in charitable events, such as fund-raising walks, or creating your own event, can help your business get positive media coverage (if you publicize your efforts in a thoughtful way). That’s what you call "good PR."
But the benefits don’t end there. In the world of search engine optimization (SEO), that media coverage is known as "earned media." And it's gold.
A mention of your business, and a link to your website from a credible media outlet, can increase your small business website’s authority. The more earned media links your site gets, the more authority it stands to gain. The higher your website’s authority, the more Google trusts your site. And the more Google trusts your site, the higher your site may appear in relevant search result pages.
In a survey of Search Engine Journal’s Twitter following, 50 percent of respondents said earned media will deliver the best SEO results in 2017, followed by paid media (30 percent) and owned media (20 percent).
3. You can boost your social media profile
Promoting your charitable initiatives is not only good for PR and SEO, it also helps build your profile on social media.
Contrary to popular opinion, social media likes and shares don’t directly impact your company website’s SEO, according to Stone Temple Consulting. But sharing your small business’s philanthropic activities on Facebook, Twitter, Snapchat, Instagram, Pinterest, and other social media helps get the word out. Your followers may share your posts with their followers. Those shares can act as the online equivalent of positive word-of-mouth, which can drive new visitors to your website.
4. Consumers may spend more on your products or services
At least 55 percent of global online consumers are willing to spend more on products and services from socially responsible businesses, according to Nielsen, though the percentage (42 percent) is lower for North America.
“Consumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence purchase decisions,” according to Amy Fenton, global leader of public development and sustainability for Nielsen. “This behavior is on the rise and it provides opportunities for meaningful impact in our communities, in addition to helping to grow share for brands.”
5. You may save money by retaining employees
It’s expensive to find and hire new employees, with average onboarding costs of $4,000 per new employee, according to Bersin by Deloitte research.
A better bet: Keep the good employees you have. How? Turns out, just as consumers like to feel good about the companies they buy from, employees like to feel good about the companies they work for. The better your employees feel about you, the better the chances they’ll stick around.
“If you make your company a positive force in the community, it can improve employees' regard for their corporate leaders, which can only help you,” according to Entrepreneur. “The daily grind is difficult. Employees need all the motivation they can get. Good morale is essential to a successful business, and this is one of the best ways to bolster it.”
Examples of businesses giving back
Once you’ve decided to give back, the next question is: How? Many successful small and midsized businesses have gained loyal customers by giving back in ways that are relevant to their business. Here are just three examples worth checking out.
- In the uber-challenging bookstore business, Better World Books has earned a following (and a Wikipedia article) for donating books and contributing to global literacy initiatives. The company’s website runs a ticker across its home page, providing visitors with a constantly updated account of books donated and funds raised for literacy and libraries.
- Eyeglass sales company Warby Parker makes a monthly donation to its nonprofit partners based on the number of eyeglasses sold. The goal is to train citizens in developing countries how to give basic eye exams and sell inexpensive eyeglasses in their communities.
- Detroit-based Better Life Bags designs custom, made-to-order bags. To make the bags, the company hires women who have had difficulty finding employment. The bags come with the names of the woman who made it.