Corporate social responsibility can be a very effective piece of a credit union’s business and marketing strategy when implemented effectively. Marketing plans require several critical pieces, such as the situation analysis, marketing strategy and the financials. The situation analysis, which digs into the market demographics, trends and needs can help point a company to an appropriate focus for CSR. A strong CSR can be a valuable point of differentiation and opportunity. A group of likeminded people working at a credit union and living a CSR also serves as a powerful marketing strategy with regard to mission and positioning. The CSR can also contribute positively to the bottom line via stronger member and employee loyalty that results in lower acquisition costs and lower turnover, respectively.
Canada's largest credit union, Vancity, is one that comes to mind that is very honed in on its corporate social responsibility, but let’s look outside of credit unions. Honest Tea, Starbucks and Colgate-Palmolive are three companies that credit unions can emulate in this regard. Honest Tea had to buy tea from somewhere, so why not buy it from a Native American reservation with 66% unemployment and make an effort to solve its economic strife by sharing in the profits. Next, the company plans to help the reservation grow its own peppermint for the tea so it can be more self-sustaining. At the same time, the tea is raising awareness about the tribe.
Starbucks has to buy coffee from somewhere, so the company makes sure it only buys from farms that treat the employees fairly and pay them a living wage. Through its partnership with Mexican coops and Conservation International, Starbucks is not only saving farmland and farmers, but also created a CSR report for customers and stakeholders. For the company, the report adds a sense of accountability for measuring and monitoring how it conducts business, but it also makes the company more attractive to its customers and investors.
Colgate-Palmolive’s corporate social responsibility strategy is well aligned with its business strategy. Its approach is three-pronged: people, performance and planet. Since the beginning of its Bright Smiles, Bright Futures for oral health education in 1991, Colgate, through this partnership with its customers, has reached 700 million children in 80 countries. Many of these oral health clinics, which include videos and handouts of toothpaste and toothbrushes, take place in impoverished areas of Latin America and China. In 2011 and 2012, 173 million people were reached about the importance of washing their hands with soap. In 2012, Colgate’s Hills Pet Nutrition has supported 900,000 pet adoptions. Colgate created eco-friendly products while also reducing the packaging and emissions for creating other products. It also holds supply-chain partners to its environmental standards. Colgate’s environmental efforts have led to a 15% energy reduction and it’s working to develop alternative transportation of its products that is more environmental friendly, saving the company on these expenses. Colgate launched a water reduction effort to save the environment and money.
Each of these programs specifically aligns with the company’s brand offerings and values that are important to the consumers that buy these brands. But it doesn’t end there. In its overall push toward greater health, Colgate employees put in 9.3 million minutes of healthy activity over 6,500 days. Colgate also offers employees professional development opportunities and rewards innovation with seed money for development of viable ideas.
Colgate’s efforts cultivate greater customer loyalty, which in turn generates repeat customers, and employee loyalty, which decreases turnover and associated costs, as also indicated in the Starbucks video. Both the Honest Tea and Starbucks executives emphasize (in the videos linked to above) the importance of transparency in business, which helps generate a higher level of customer and employee loyalty, because it’s important to their customers to do business with companies that hold themselves to higher standards. They aren’t just writing checks; these companies are living their values, which can tip the customer (or member) scales in their favor.
This transparency and doing the proverbial right things translates into content for branding and marketing strategies, and ultimately good business. With the help of its focus on CSR, Colgate’s net sales have increased throughout the economic crisis, rising from $15.3 billion in 2008 to $17.1 billion in 2012. Colgate has won many awards for its products and the way it does business, including being named to the 2013 World’s Most Ethical Companies by Ethisphere Magazine, which generates earned media and creates additional marketing content. It is absolutely crucial that marketing be involved in all business efforts from the earliest stages possible, and in fact driving the creation of credit unions’ products and services. Marketing departments are often paid short shrift because they are not utilized correctly. Unlock their potential and you can unlock a credit union’s potential by using tools such as strategically aligned corporate social responsibility.