Does Corporate Social Responsibility Build Customer Loyalty?

Corporate Social Responsibility intitiatives such as Pepsico's $15 million clean water program or Walmart's $2 billion in food bank support can surely create goodwill with customers. But after the cost of undertaking and publisizing such programs, what is the NET return to the company?

Advertising Age magazine sought to answer this question, studying the net financial impact of four dimensions of CSR performance -- environmental friendliness, treating employees fairly, community support, and sourcing from local growers and suppliers. Their conclusion: That consumers seem to modify their purchase behavior only when the CSR domain directly affects their actual experience with the company or brand. Broad initiatives like environmental friendliness and community support build only goodwill, but initiatives like offering locally sourced products and fair employee compensation -- actions related directly to the products and people that consumers face -- bring both goodwill and a higher share of wallet from consumers.

Read more at Advertising Age