70% of Consumers willing to pay more for CSR

A new report from consultants Penn Schoen Berland indicates that consumers are beginning to regard social responsibility as a quality that adds commercial value to products. The 2010 Corporate Social Responsibility Perceptions Survey of a thousand consumers reports that 70% thought CSR was important despite the recession, and would pay as much or more for socially responsible goods. The report shows that CSR is becoming more effective as a marketing tool and that consumer perception of firm CSR has an increased effect on firm branding. However, this also raises the stakes for CSR fraud and should trigger greater scrutiny of firms' CSR claims. Below is a summary of findings:

CSR definition mysterious to consumers

Over half the consumers surveyed could not successfully define CSR. Of those that could, 20% defined it in terms of self regulation and accountability. Another 20% define CSR to mean "giving back" to society. Another 17% say that CSR means helping people. While a mere 7% of the consumers surveyed believed that being "green" constituted CSR, but almost 40% combined thought that energy efficiency and employee treatment were ways to be socially responsible. Only 4% of respondents considered transparency important to CSR, which is interesting since transparency is usually the first step firms take in an effort to be responsible.

Despite lack of clarity on concept, CSR impacts buying decisions

Despite their inability to nail down a definition of CSR, whether or not firms are perceived as socially responsible differentiates brands and impacts consumer buying patterns. Further, CSR is more important to consumers in some industries, such as healthcare, energy, food, auto and finance (descending order), than in others, such as beverages, telecom and clothing.

Regulated industries suffer in CSR perception

Health care companies and financial firms have a low perceived level of CSR, likely resulting from the increased criticism of these firms in the media. The report notes that industries exposed to public criticism to justify reforms lose with consumers. This is especially unfortunate for these industries since 85% of respondents said CSR is 'very important' to them in these industries over others.

Companies not communicating enough about CSR, to anyone

83% of respondents had never heard CSR news from firms, and 80% say they've never heard anything about their own firm's CSR activities. In a true "if a tree falls in the forest" sense, firms that don't communicate about their CSR activities may as well not be doing them, in the eyes of the consumer. This is unfortunate, and diminishes the fiscal value of CSR activity, all around. Over thirty percent of respondents say they would accept a pay cut to work at a socially responsible firm.

Indeed; after the "Pairing Beer and CSR" post from two weeks ago, Anheuser-Busch contacted this author to invite me to revisit the additions to their website, which now offers interviews with employees on CSR activity, and promised a forthcoming CSR report. However the site was sparse and uninformative when I looked at it prior to writing my post, appearing that Anheuser had no CSR at all. Firms should communicate about what they're up to, for their customers', employees, and stakeholders' benefit. In this way, Justmeans' promotional services are incredibly valuable.

The increased attention consumers are paying to CSR, and the increased value they associate with CSR activity, justifies stricter examination of firms for CSR quality and for exposing firms that are faking it.