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Make Money—Practice Social Responsibility

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Conventional wisdom would have many executives believe that social responsibility is in conflict with revenue and profit growth. It's true: A company's responsibility is to increase profits. Yet social responsibility doesn't have to be a drag on the bottom line. Today, you can actually make money by giving.

Social and environmental responsibility are no longer just about donating money and services to needy groups. Business process, product development, and partnerships can all be analyzed for better, more responsible alternatives. And if the responsible choice saves money in the long run, adds value to the product, and creates a positive culture inside the company, then it's a good thing.

Social and environmental responsibility should no longer be an afterthought, but a key part of how a company exists, develops its products and services, and attracts great employees. And that's where marketing comes in.

Marketing should take the lead and catalyze the company to move forward on social-responsibility programs. Within the company's strategy and vision, marketing can find opportunities for product differentiation and customer loyalty that integrate solutions to social and environmental problems.

Being creative and inventive here can push your strategy ahead of the competition and shine a positive light on the company.


Here are some thoughts on how to get started:

Think self-interest

Look at the industry your company is in. What are the social and environmental hazards or issues? Is there a way to address them and at the same time provide your company with an advantage (lower cost, higher value, unique differentiator)? Nestle eliminates middlemen and buys milk directly from farmers in third-world countries, significantly lowering the company's costs. To enable this process, Nestle educates and trains local farmers. This is a huge win-win. As farmers learn to farm better, their wealth grows, the community expands, and milk resources for Nestle's requirements are met at a lower cost. The best place to start is where the impact of the social program is in your own backyard.

Attract more customers

With the broad coverage social and environmental issues receive in the press today, consumers and business purchasers are becoming much more aware. You can get ahead of the curve for what will attract tomorrow's purchasers by incorporating social responsibility today. Moreover, consumers consider choosing environmentally safe products or those developed by socially responsible companies a badge of honor. Companies that use recyclable materials, donate to a cause, or turn a cause into a corporate passion can provide unique value and differentiation for the company. It can give customers another reason to choose your product over your competitors, and even better, another reason for customers to talk about it with their friends. Look at the Toyota Prius. The hybrid technology developed by Toyota is paying off big. The company is so far ahead of the competition in technology and sales of hybrid cars (essentially cornering the market) that competitors are licensing Toyota's technology to get in the game.

Strengthen corporate culture

Today, social responsibility programs are one of the top reasons young graduates choose a company. The best and the brightest want to work for a great company, but they also want to know the company is ethical and moral. Donating dollars isn't enough anymore. Employees want to see their company do more. And companies are at a crossroads. They can give pre-tax dollars to the community and get a tax deduction. Or, they can focus the company on a cause (feeding the poor, drug development, stem cell research, work programs, cleaning up a nearby community, etc.) and change the company and the people within it. The internal focus and passion around a specific cause gives employees a deeper sense of connection to the company. And that provides the biggest payoff in happy, contributing employees that stay in their jobs longer.

Lower costs

Do the research. Many companies are finding that the upfront cost of building in wind or solar power is a long-term savings. One solution can be as simple as ensuring all recyclable materials used anywhere in the company are actually recycled. Take a look at your value chain or the materials used in your products. Often the ethical choice can turn out to be the cost-savings choice. Patagonia invented a new material made from recyclable plastic soda-pop bottles. The material is also recyclable. And the clothes produced from the new material have enjoyed great success.

Think long-term benefits

Social responsibility means investing for the long-term. Results can take time to impact the bottom line. Yet, the cost savings can be significant. Many executives find the initial time and effort to plan out and fund these programs is too much to invest in and believe it will take away from their core business. Taking the time upfront to align the social program with the goals of the company and deeply integrating the program throughout the company will give the company an edge with customers, partners, and employees (and for some companies, the government) in the future.

Think about opportunities to make your product unique by incorporating recyclable materials or reducing waste. Can you reduce energy consumption in the production and manufacturing process and save the company money? How can you add differentiating value while incorporating training, funding, or other resources to partners in your value chain? Look at your target audience, how can you invest a percentage of revenue in a social responsibility program that will actually attract more customers?

Motorola, Apple, and The Gap all donate to The Global Fund to fight AIDS, Tuberculosis, and Malaria. Each (PRODUCT) RED product markets the fund and markets the social responsibility of the company involved.

The Apple iPod Nano (Product) Red Special Edition gives $10 for each unit sold. Much like the yellow wrist band people wear for donating $1 to the Lance Armstrong Foundation cancer program, wearing the red Nano lets everyone know you are someone who cares. It puts the consumer in a special class with prestige. In this case, it provides one more reason to buy the iPod over any other product in its class.

Patagonia doesn't advertise its clothing. It advertises its environmental message through people wearing its clothes. Yvon Chouinard, founder and owner of Patagonia, expresses his philosophies for running his company and for his environmental responsibility passion in his book, Let My People Go Surfing (a worthy read). Although the program is clearly self-serving, since Patagonia needs a clean, healthy outdoors to sell to its hard core audience of rock climbers and skiers, it draws employees, customers, and partners closer to the company.

* * *

A grassroots effort to deploy social responsibility across the company can illuminate for management the advantages to this new way of giving—and getting in return. Then, letting the world know what your company believes in becomes a natural extension of marketing and doesn't appear to be trying too hard.

To learn more about corporate social and environmentally responsible opportunities, take a look at these sources: Worldchanging, Treehugger, Grist.


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Denise Shiffman (denise@viralvoice.net) owns the marketing consulting firm Venture Essentials and is the founder of ViralVoice.net, a community site and blog for marketers.

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