Customer Relationship Management / September 1999
By Jeanan Yasiri
In recent years, corporate America has spent considerable effort hatching more sophisticated customer service initiatives. Architects of successful programs learn in time that good customer service is rooted in the simple premise that we are working to make people feel good about their interactions with our organization. As service providers, we want to make people feel cared for - respected. As customers, we want merchants to treat us well, regardless of our circumstance. And, who doesn't also enjoy the experience of watching others being treated well with large doses of care and dignity?
The concept of providing service really needs to go beyond attending to an individual customer. Today, deliberate service initiatives need to take into consideration the communities where our consumers and employees reside.
The fact is that more consumers today are casting dollar votes for business that demonstrate meaningful efforts toward providing this level of care and respect beyond the checkout aisle. Take a look at what your organization is doing. It's easy to claim that community service is part of your organizational mission, but the fact is that backing a ball team, buying a table at a benefit lunch and glad-handing with local officials are not in and of themselves meaningful demonstrations of commitment to community. The advertising campaigns your marketing or communications staff set forth likely suggest you care about your community, but the question remains, can you quantify it? Do you care in your actions or only in your statements?
America's Most Generous Companies
The staff of The American Benefactor noted the following examples of what they considered to be some of America's most generous companies:
Johnson & Johnson: For focusing $88.5 million of their giving energy in 1997 on kids and their causes, as well as developing a concerted effort toward developing public-private partnerships.
AT&T: For giving $64 million - $38 million in foundation grants, and the rest in cash and product donations last year.
Ben & Jerry's: Bucking the trend that many publicly traded companies give less (on average about two percent), Ben & Jerry's represents a commendable exception by committing an impressive 7.5 percent of its pretax profits to charitable causes.
Dayton Hudson: Despite the ups and downs of economic trends, the country's fifth largest retailer continues to donate five percent of all pretax profit to charity and has done so since 1946.
Levi Strauss: In addition to its annual commitment of 2.5 percent of its pretax dollars to charity, since 1991, Levi's has poured $8.6 million into efforts to combat racism in the communities where it has a manufacturing presence.
Citicorp: For establishing an international microlending program that enables those who never have established credit to do so without the threat of unreasonable interest rates or other exploitive charges.
Merck: For making its only known treatment for a blinding disease available to anyone who is not able to pay for it.
Patagonia: For becoming involved with the environmental movement in the 1970s and 15 years later establishing a formal program that allocates one percent of sales (or 10 percent of profits, whichever is greater) to protecting and restoring natural environments.
Whirlpool: For working to better grasp some of the real challenges women face today by commissioning a series of research efforts that study women's views on work, family and society.
Fannie Mae: For reaching out to consumers who do not speak English, and as a result, have difficulty purchasing homes. In 1996, 1.45 million Americans received home-buying guidelines produced in seven languages by Fannie Mae.
Bottom Line Benefits to Giving
Philanthropy is hardly a new concept, yet corporate giving remains the weak link in American philanthropy. Only six percent of contributions nationally are made by corporate sources. On average, American corporations allocate only 1.3 percent of their pretax earnings for charitable ends.1
In contrast, consider that recent surveys suggest that companies that don't "give back" to their communities are seriously shortsighted. A recent Cone/Roper survey found that 78 percent of consumers are more likely to do business with a company that works with a cause they deem important. In fact, 66 percent of consumers in that survey said they would switch brands, and 62 percent would switch retailers to support a cause they care about. In households with annual incomes above $50,000, the percentage of consumers willing to switch brands jumped to 82 percent - even if it meant the product would cost them more.
A recent Boston College survey found that more than three-quarters of consumers take a company's social profile into account when making purchasing decisions. Researchers at the institution have also demonstrated a positive correlation between financial success and corporate social responsibility. As a case in point, Interface, a floor cover manufacturer, has seen its stock price quadruple and profits double in the past four years. Company owners attribute their turnaround to a focus on producing and selling only environmentally responsible items.
Also consider not only what you do, but whom you tell. Another recent study, performed by the Boston-based Image Development Public Relations Group (IDPR), found only 16 percent of the companies they surveyed publicly shared information on their corporate giving. Among those companies in the Fortune 100, only 67 percent report their giving. IDPR concluded that while most businesses contribute in some way to their communities, few recognize the value their donations can bring in the form of customer trust and loyalty and as a result, their donations are grossly under reported.2
How to Get Started
If this is new territory for your organization, identifying how and what to "give" can be an interesting challenge. Different communities will present different needs and various obstacles in meeting those needs and sometimes different levels of sophistication in helping you, as a corporate citizen, in making an appropriate contribution. It's also important to recognize that the needs in our communities change regularly and keeping our eyes and ears open to those changes is as important as the act of giving in the first place. Even if it seems like your organization already has established itself as a good corporate citizen, evaluating the context of the effort is a valuable exercise.
When evaluating the community service that your organization is involved in, consider the following:
- Is the contribution you are making impacting a population that otherwise would have difficulty in advancing their charge or cause? How will your contribution of dollars or time affect their effort?
- Does your corporate mission statement reflect a commitment to giving back to the communities you serve? What is the exact language? How is this communicated not only to your external consumers but to your employees as well? Are employees aware and involved in distribution of these corporate contributions?
- Does your contribution provide encouragement - even a direct challenge - to others in your industry to do the same? Are you sharing ideas and concepts with other organizations to capitalize on your contribution on behalf of the community you hope to serve?
The Council on Economic Priorities (CEP) regularly monitors the social and environmental performance of domestic and international companies. The CEP (www.cepnyc.org) annually rates more than 700 publicly held U.S. companies in eight categories, including environment, women's advancement, minority advancement, charitable giving, community outreach, family benefits, workplace issues and disclosure. Each year the council recognizes the most progressive policies of corporations with its annual Corporate Conscience Awards, which are given in the areas of Community Involvement, Employee Relations, Environmental Stewardship and Global Ethics. The CEP's goal is to reward excellent performance in these areas, so these programs ultimately can become models for other corporations to replicate.
Because the CEP considers community involvement an area of such critical importance, it is in the process of re-evaluating its rating criteria.
"This has been a very difficult category for us to grade," says Dori Weissman of CEP's research division. "In the past, we considered simple points like whether a corporation had a community relations staff and what they expended on salary and benefits for these departments. We also asked corporations to answer, really in an open-ended way, all the programs or partnerships they had established with the specific intent of enhancing the communities they serve."
Weissman says the CEP found that corporations had difficulty defining "community." CEP is working toward establishing a broad, yet useful, definition to help organizations gauge their good efforts.
"We are interested in seeing how companies are identifying the needs in their communities and interacting with appropriate community leaders to meet those needs. We will also be asking who in the company has the decision-making authority to determine where dollars go."
Weissman says the CEP's research has shown that 43 percent of people surveyed are impressed when a company donates products or services. Additionally, 37 percent indicate they are impressed when a company allows its employees to work on community projects. Only 12 percent said they were significantly impressed by sizeable dollar donations.
Learning by Example
Disaster relief efforts are a big component of the direct mail marketer Lands' End's community giving mission. Ginnie Helin, corporate giving manager, leads a board of eight rotating employees that represent the interests of all 7,200 employees.
"We partner with the Red Cross on most of the disaster efforts we contribute to," Helin says. "They let us know what the exact needs are, and then we can deliver. For instance, when the fires took place in Florida in 1998, the fire departments there indicated people needed underwear. We sent $25,000 worth. When Hurricane Mitch hit, we worked with the vendor who produces the material for our blankets, and we were able to contribute 1,000 blankets to that cause. We also sent teddy bears for the children."
In addition to donated merchandise, Lands' End has a sizeable corporate giving budget that largely focuses on the rural Wisconsin communities where its corporate headquarters are located. "Having our employees help us in making those decisions is critical," Helin says. "After all, these are small communities. Our employees live in these towns, and they know what the needs are."
Another example of involving employees in the mission to serve community is demonstrated by Marriott International, Inc.'s recently launched "Spirit to Serve Our Communities" campaign. Announced in February 1999, the effort pledges to enlist the support of Marriott's 133,000 associates and is expected to generate more than $20 million ($4 million per year) in donations and fund raising by 2004. The program is multi-faceted and takes into account the principles of Marriott's corporate mission as well as the wishes of top management and other associates.
"We went through a comprehensive research project where we looked at community needs and business goals and found where they aligned," says Judi Hadfield, vice president of community relations and corporate projects for Marriott International, Inc. "We identified four outreach and community relations service areas including job and career opportunities, family services, community partnerships and Marriott Associate involvement. We looked at what other companies did, interviewed senior management and hourly associates. We have different brands, different businesses and international locations, and we wanted to encompass all that."
Hadfield says that some of the Marriott initiatives are orchestrated through specific departments. For instance, the "Pathways to Independence" project, which focuses on moving people from welfare to work, is connected to Marriott's Community Employment and Training area. Additionally, Marriott works to connect its community service efforts to otherwise established events.
"This year we launched the 'Spirit to Serve Day' during Associate Appreciation Week," Hadfield says. "We had 1,000 associates from headquarters - which represented one-third of our workforce - at 25 sites working with 17 different community-based organizations. Without a doubt, morale, goodwill and good feelings among associates were increased. Some people said 'I really never knew the person in the cubicle next to me until we chopped onions together at the shelter!'"
Finding Your Organizational Service Opportunity
The opportunities for involvement in your community are countless. Much depends on the makeup of your organization: the type of service you provide; the resources you are reasonably able to invest; the focus that administrators and employees would like to place on certain issues; and the real concerns affecting your community. The following four categories identify avenues that present opportunities for organizational involvement in virtually any area.
1. Financial Support
This category is perhaps the easiest. Grant giving is a relatively simple way to assist local community groups in achieving their goals. The areas that require management include setting up guidelines that reflect your organizational mission and then identifying projects that are consistent with those goals. For organizations that have the capital but little ability to establish or manage some of the other areas listed below, this can prove to be an excellent way to contribute in a meaningful way.
2. Internally Developed Programs
This category requires a little more creativity and definitely an open mind. First, stop to consider what products you produce or services you provide and what populations are in need, but perhaps unable to access it. For instance:
- If you are in the transportation industry, do you make low- or no-cost passage available to individuals in crisis? Trailways Bus Service does. For years the company has promoted free rides home for runaway teens.
- Is your service technology driven? IBM recognized it could best serve the communities where it does business by placing computers in pubic school districts that otherwise could not afford them.
- Do you provide healthcare or sell health products? Are you making your services or products available to low-income patients or those without the benefit of insurance? How are you making those populations aware of what you are offering? Dean Medical Center in Madison, WI has established a host of programs designed to improve access to uninsured patients. The cornerstone effort called "Community Care" advocates on behalf of patients seeking help with insurance and entitlement denials.
You might assume that your industry or organization has nothing to offer populations in need, but the challenge is to look beyond the obvious service you provide. Consider, again, Marriott International, Inc.'s "Spirit to Serve" Campaign. Some of their programs seem to have little direct affiliation to the hospitality industry. The Pathways to Independence program provides training and jobs for people on public assistance. The Bridges…From School to Work effort trains and encourages businesses to employ high school students with disabilities. In addition to members of the communities they serve, Marriott employees and their families are beneficiaries of these very real community service initiatives that produce very real results but are not directly linked to the specific service that the corporation provides to customers on a day-to-day basis.
Important Points to Consider When Establishing a Corporate Community Service Effort
- Research what is being done in your market area and among others in your industry. Are these efforts successful? How do the general public, community stakeholders and employees regard these efforts?
- Seek demonstrated commitment from corporate administrators and other management staff. This includes allocating appropriate human resources to managing and promoting the effort(s).
- Solicit employee input in developing and sustaining the model. Offer flexible options for employees to make contributions.
- Continually evaluate the program's efforts and be flexible to initiate change, as your communities' needs change.
- Communicate the progress of efforts to administrators and staff on a regular basis to convey the benefits and outcomes and to show progress and continued commitment.
- Celebrate the successes you help your community achieve. Invite all participating parties - even your competition - to ensure that people are realizing the power of giving.
3. Community Partnerships
A relatively new area of community involvement is that of lending a hand in facilitating dialogue about the issues that exist and discovering how partners in a community can achieve results together. The financial or other contributions of any one organization do not easily solve most of the issues facing a community. If your organization can demonstrate leadership in pulling together appropriate community partners from public and private entities to discuss and facilitate the change process, that is very valuable indeed. It requires human resources more than direct financial contributions, but is viewed, in particular by the public entities that face these issues daily, as extraordinarily meaningful. It is a demonstration of caring that goes beyond check writing and instead provides a real commitment to getting involved in the change process. More information on developing community collaboratives will be highlighted in an upcoming issue of Customer Relationship Management. Additional information can be found through the National Civics League, in Denver, CO.
While this also could be considered an internal effort, the exercise of organizing volunteers to provide assistance beyond the walls of your organization can really take on a life of its own. It is also an area that is becoming increasingly popular. In a 1996 survey conducted by the Center for Corporate Community Relations based at Boston College, nearly 80 percent of the companies interviewed indicated they have volunteer programs, and one-third provide time off for volunteer work.3 The very real spillover benefits are many but perhaps most significant is increased morale on the part of participating staff.
According to the Independent Section, a Washington, D.C.-based association of nonprofits, since 1985, the growth of corporate contributions has slowed, while employee participation in volunteer programs has increased. Additionally, research has shown that the public views corporate volunteer programs as less self-serving than large cash donations accompanied by publicity blitz. General Casualty Insurance of Sun Prairie, WI combines employee volunteerism with its grant giving function. Employees who can document that they have donated free time to a local nonprofit agency can match their time donation with a corporate contribution equivalent to the time invested. Organizers of this effort say it makes employees feel real ownership in the corporate giving mission of their workplace. For more information on developing employee volunteer efforts, speak with representatives of your local United Way Chapter or visit the Points of Light Foundation web site at www.pointsoflight.org.
1The American Benefactor (Summer 1998) p. 30.
2Business Ethics Magazine (September/October 1996) p. 10.
3Who Cares (September/October 1997) pp. 22-23.