In the past, few companies placed corporate social responsibility (CSR) in the forefront of PR and marketing efforts. While some issued occasional press releases about their charitable donations, most gave CSR a low priority. Mainstream corporate America generally viewed CSR-committed companies like Ben & Jerry’s and The Body Shop as eccentric, left-wing hippie outfits.
Now, companies make a point of citing their strong records on CSR and environment, social and governance (ESG). Many investors scrutinize corporate ESG performance, and some mutual funds invest only in companies with strong ESG scores. Research shows that
- robust reputations improve long-term business performance,
- consumers prefer to patronize businesses with records of social responsibility, and
- investors are more likely to purchase stocks of companies with solid reputations.
Companies with strong reputations are less likely to be subject to lawsuits, boycotts, and other reputational crises. Strong reputations also help companies attract and retain top talent.
“As a result, more and more organizations are placing it squarely in the middle of corporate communications,” says Katie Paine, CEO of Paine Publishing in her Guide to Measuring Social Responsibility. “Now that CSR is right there on the communicator’s tool belt, alongside PR, social, and digital communications, it must be evaluated like any other tactic.”
Why Measure CSR?
While some believe CSR is an investment and should be measured like other investments, others say CSR programs are an end in and of themselves: Companies do good for the sake of doing good, not to do well.
Measurement can provide several benefits even for companies that hold to that view. Recording and measuring activities helps companies make better decisions about which social initiatives to support, improve the efficiency of their programs, and convince skeptical stakeholders of the value of the efforts.
Measurement is often an afterthought, especially among time-pressed HR and CSR teams that may question the value of investing precious time in record tracking. “It’s important to change this mentality and understand how measurement can be applied to benefit your organization and make your life easier,” says Ben Darlington, director at Benefacto and GivX.
Some Ways to Measure CSR Outcomes
Sam Ruchlewicz, director of digital strategy & data analytics at Warschawski, suggests several methods to measure CSR impact on revenue and profitability in an article for The Measurement Advisor. Some include:
New customer acquisition. New customer acquisition can be measured by:
- Calculating the incremental increase in new customers from a CSR-focused campaign vs. a traditional one,
- New leads generated through CSR-originated relationships,
- A “with-or-without you” mixed-market test.
Lifetime value. Customers or clients acquired through or who participate in CSR-driven activities tend to be more valuable, less prone to churning, or more inclined to expand their relationship with your company. “For customers, something as simple as a lifetime value (LTV) comparison between customer groups or a regression analysis can reveal startling outcome data,” Ruchlewicz says.
Cost savings. Work with the finance team to uncover cost savings from going green, such as low-flow toilets or efficient lightbulbs. Those savings can sometimes be substantial.
“No one method is perfect, and no single method will completely capture all of the value created by your CSR program. That’s OK. Start with what you can and build on it moving forward,” he advises.
Bottom Line: More companies now place a greater priority on corporate social responsibility (CSR), but few place a priority on measuring CSR activities and results. Measurement can improve CSR results and convince skeptical stakeholders of its benefits and help gain increased funding. Because CSR has become an essential factor for corporate communications, experts say it must be evaluated like any other tactic.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.