More and more companies are turning to corporate social responsibility as a means of building loyalty among their customer base. Now could be just the right time to invest.
Although corporate social responsibility has long been a publicity tool in the corporate toolbox, many companies now see it as a way to strengthen their brand and harness a loyal following. This ultimately delivers the bottom line results that shareholders are interested in.
Indeed, according to Forbes (January 2019), “investor interest in environmental, social and governance (ESG) factors has gone mainstream, and the experts we spoke with believe this trend will continue into 2019 (and beyond), with socially responsible investing gradually becoming the new normal.”
Campaigning organisations, such as Not For Sale and Stop the Traffik, have brought bad business into the public square. Social enterprises, with a good business ethic are highlighting that it is possible to successfully fuse business and charity into one entity so that communities, societies and businesses can benefits.
Start Something That Matters
During a recent trip to Asia, I picked up a book at Changi airport to relieve the boredom of hours of travelling. The book was called Start Something that Matters, by Blake Mycoskie. Mycoskie is the founder and Chief Shoe Giver at TOMS. TOMS is a social impact shoe company he started in 2006 after a ‘time out’ visit to Argentina. Mycoskie was shocked by the number of children walking around with no shoes, and the impact this had on their health. After much trial and error (he had no experience of the shoe industry) he managed to bring to market a range of shoes that delivered social impact.
Keep It Simple
The TOMS business model is simple (the good ones usually are). For every pair of shoes he sells, he gives a pair to a child who hasn’t got any. For new generation micro philanthropists, this is a no brainer. I can buy a pair of TOMS and make a difference or I can choose an alternative brand and just deliver profit to shareholders.
The impact probably goes much deeper that this though. By choosing TOMS you put a pair of shoes on a child, but it is likely that you also contribute to an ethical supply chain.
This is just one example of business creating social impact, and there are many others now copying the TOMS model (take a look at this crowdfunding website and search for BOGO).
Steps To Creating A Social Business Model
So how can you translate this concept into your business model? For some companies this could be relatively easy. Providing you are a product developer with a product that has the possibility of benefiting others. For others this may be more difficult. Nevertheless, there is a lot to be learned from Mycoskie.
Firstly, TOMS doesn’t sell shoes (well, not directly). TOMS is selling a story, an experience, and an opportunity to make a difference. This flips the business model in such a way that buying shoes becomes an emotional decision to make a small difference in the world.
Secondly, the ‘One for One’ concept is replicable. In other words, once the concept is adopted by a loyal following you can apply the model to other products. By doing so you leverage this loyalty by inviting customers to do more through their buying decisions. For TOMS, this has been translated into sunglasses. One pair of TOMS sunglasses = sight for one person.
Thirdly, the model provides a campaigning opportunity for businesses, which is also a new concept that builds positive publicity. It gives them a sense of community and extends the loyalty further.
We Can Change The World
Having spent twenty years in business and eighteen fifteen years in the charity sector, I have a passion for transforming lives. What I’ve realised, and experienced, along the way is that there is such a thing as good business. The business community has the opportunity to change the world in a big way, and I want to be part of it. It would be great to see groups of business leaders come together just to explore the possibilities.
If TOMS has anything to offer to businesses, it’s the encouragement that social impact business can work. Considering that they started selling shoes just before the global economic crisis in 2006, they’ve done pretty well. By the end of 2019 they’d given 100 million pairs of shoes to children around the world and, despite the need for financial restructuring, TOMS investors are committed to the buy one give one ethos that has been part of its DNA.
by Stuart Rivers