Dear Colleagues:

Companies spanning the globe are investing millions upon millions of dollars in Corporate Social Responsibility. Yet, it appears that many don't have metrics to understand the effectiveness of their CSR programs, let alone a strategy that integrates them into their branding and business plan.

In past issues of Marketing Coach we've discussed the tradeoffs between "nice to do" community contributions and executive pet projects versus strategic branded initiatives. Interbrand's new study reveals the transformation of Corporate Citizenship and the elements that are needed to drive its success. Based on their findings we may now discuss corporate giving's real impact and potential for impact.

After you read the highlights shared in this issue, the full report is available at Interbrand.


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In This Issue
Green Light Gone to Red?
The New Age of Corporate Citizenship
Doing Good to Do Better
Top 8 Things to Know about Corporate Citizenship Today
"Employees, customers
and investors
are holding companies
to higher standards."

Andrea Sullivan,
Executive Director Client Relationships, Interbrand

Corporate Citizenship: Now a Proven Brand Builder
corporate mission
Green Light Gone to Red?

"The conversation is evolving from green to one of making changes for the world," said Andrea Sullivan, Executive Director Client Relationships, Interbrand. "It's a broader umbrella and bigger responsibilities. Employees, customers and investors are holding companies to higher standards."

A recent study commission by Interbrand indicates "that consumers are getting "'green fatigue'," with consumer interest in sustainability peaking around 2005...and only [product and service] innovation will differentiate your firm in an increasingly green marketplace. The maturing of the whole notion of green has engendered a shift to a broader sense of altruism," explains Tom Zara, Executive Director Brand Strategy at Interbrand's New York Office.

The New Age of Corporate Citizenship

The following are excerpts from Interbrand's report "The New Age of Corporate Citizenship: Doing strategic good that builds brand value."

"The old cosmetic approach to CSR, the idea that CSR is merely a necessary cost of doing business separate from your brand identity, and the defensive position of CSR to stay one step ahead of government regulation are no longer relevant. Instead, a recent study by Interbrand and Hall & Partners suggests that what's "in" is a strategic way of using CSR to enhance your brand's established identity and grow your brand value," explains Zara.

"Corporate citizenship (CC) is the sum total of how a company treats every entity that depends upon it, and upon which it is dependent-its employees, customers and suppliers, the government(s) responsible for both regulating and assisting it, the communities in which it does business, and the larger environment it shares with the whole planet.

"Take sustainability. The green movement showed corporate officers that sometimes social conscience was not only compatible with business sense, but that doing the right thing socially was also the right thing for one's brand value and bottom line. In the wake of the near-universal adoption of sustainability targets, green is the new black. It's almost passé by now, and beyond sustainability, corporate entities' responses to environmental concerns have run the gamut from genuine and innovative engagement to 'greenwashing.' One thing is by now well established: Environmental awareness has driven the discussion of the role of corporations in the wider world.

"What's new is the way an attention to detail about corporate action, begun specifically around environmental concerns, has begun to migrate and replicate across the broader social field. Stakeholders of all stripes-employees, B-to-B customers and consumers-are pressuring corporations to walk the walk when it comes to issues from economic development in the Third World to gay rights in America.

"Corporate Citizenship, then, is the understanding people have of a company's positive contribution to society based on the way it treats the core elements of its business - which we call the six fields of play - employees, customers and suppliers; the communities in which it operates; the governments that influence its operations; and the planet it relies on for its existence."

Doing Good to Do Better:
Building a Corporate Citizenship Strategy

"There are several clear implications for corporate strategy once one digests the data. First, when it comes to the six fields of play, a concentrated effort in one area rather than a scattershot one will yield a greater return on investment; the halo effect that accompanies a well-executed CC strategy in one realm is more effective in building value than several ill-coordinated initiatives across multiple fields.

"Related, determining what to focus one's CC spend on requires an understanding of where in the customer journey CC has the most impact. Social engagement ultimately has a greater effect on overall brand favorability than on purchase choice, so focusing one's CC spend on how people engage rather than how they buy is crucial.

"Third, choosing a CC approach that bears a fundamental relation to your business will redound to your benefit because the business and the CC measures will be mutually reinforcing. So, for example, a financial sector entity might be advised to support micro-lending in the developing world rather than AIDS research, while an energy company would do well to focus on R&D for sustainable energy sources. The stories become clear and compelling and dovetail with the larger brand if they are tied to the core brand strategy.

"So, how do you engage with your key stakeholders to make the most of your CC strategy? There are seven discrete steps that will help you fulfill your brand promise through corporate citizenship:
  1. Sync Up Your Strategies - Ensure that your business and brand strategies are aligned before determining your citizenship strategy: all three must intersect to effect a meaningful corporate citizenship commitment.
  2. Citizenship Audit - Undertake an exhaustive review of your company's current CSR initiatives
  3. Competitive Citizenship Benchmarking - Execute a competitive field audit; examine the CSR initiatives of your key competitors
  4. Stakeholder Citizenship Expectations - Understand what key stakeholders expect of your company in the realm of CC
  5. Citizenship Driver Analysis - Use an analytic process to determine the most powerful drivers of your CC
  6. Citizenship Strategy - Compare your brand identity with your citizenship drivers to determine the most relevant, impactful ways to proceed
  7. Citizenship Activation Plan - Explore the most appropriate methods for bringing your citizenship strategy to life and-crucially-expressing it and broadcasting it to your key stakeholders.
  8. The moment is fluid when it comes to corporations' ideas around social engagement, and increasingly, the field is full of firms using some form of CC to vie for differentiation and prominence. Thankfully, there is a lot of competition in CC and the winners will be those brands that are innovators in their industry and in the lives of their consumers."

Top 8 Things to Know about Corporate Citizenship Today

According to Interbrand's Sullivan, there are eight major findings to consider based on their research and practice dedicated to corporate citizenship:
  1. Corporate citizenship (CC) does drive purchase. In certain categories CC can be as big a factor as price.
  2. While CC may have been anticipated to drive purchase in a B2C analysis, it is also making more of a difference to B2B purchasers.
  3. Reputation effect is influenced by those you have relationships with. For example, GE's first move with ecomagination and its impact on suppliers was a factor in Walmart's stepping up as the "first follower."
  4. There are "6 fields of play" for assessing CC: employees, customer, suppliers, communities in which they operate, governments influencing operations, and impact on the planet.
  5. Many organizations understand they need to have a CC platform, but they are not coming up with something strategic and are often scattershot. A singular focus with a strategy that links to your value proposition and feels like an authentic representation leads to a halo affect that makes people feel you are doing more in other areas.
  6. Ongoing strategic CC may lead to significant ROI.
  7. Many "C suite" members are compensated or paid bonuses based on their ability to influence a CC agenda, and their ability to influence corporate reputations. Boards are increasingly adding this to their agenda and to their executive performance analysis.
  8. The role of CC with employees can make employees feel more committed to their employers, especially the hard to retain Millennials.
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