Shoppers have more choices in where to buy than ever before. Yet recent data shows that there’s more to how they decide on a product than availability or even price. While the somewhat sluggish economy has some concerned that sales may fall flat, Gen Z shows that they have no intention of slowing — if you win their trust.
Gen Z is defined as those born between 1997 and 2012. While this cohort increased its likelihood of buying luxury goods online (28% over last year’s 15%), they also consider sustainability. It’s an emerging trend. Just 23% were concerned about sustainability when shopping last year, compared to the impressive 41% looking at a product’s environmental impact today.
In fact, trust is high on the list of reasons people shop for a brand. Companies have more reasons than ever to cultivate that trust while delivering on the values shoppers hold dear. One way forward is through company giving initiatives and – more specifically – through a corporate philanthropy program, sometimes called corporate citizenship.
In a recent episode of the Ecom Edge we dug into corporate social responsibility (CSR) when Coveo Host Diane Burley interviews Molly Trerotola, Head of Social Impact at Shopping Gives and CSR enthusiast.
What Is Corporate Philanthropy?
Corporate philanthropy is any effort a business makes to advance programs that improve society. This can be done through internal processes to donate time or resources. It’s also commonly done through corporate partnerships with a trusted and qualified nonprofit organization.
It’s understanding why people value corporate philanthropy. People see companies as powerful. In charge of employees and assets, and influencing the world through their offerings and marketing efforts. While corporations may not think they have a social responsibility to positively impact the world, customers disagree. Corporate giving is a way to both influence communities for good and cultivate trust the shoppers want to give to their favorite brands.
Reasons To Participate In Corporate Philanthropy
We’ve covered the general reasons to “do good.” It can make positive changes for things you value while demonstrating to your customers that you’re more than a money-making endeavor. Since customers vote with their dollar, they believe that brands have a duty to walk the talk around important initiatives.
A corporate giving program is a sort of carrot-and-stick approach. If you say you will give a charitable donation of $1 for every item sold, that may motivate customers to buy so that they can be part of a larger initiative. It has the potential to increase sales and your bottom line.
So what if you don’t partake in these values-based initiatives?
Well, shoppers might punish you. They want to give money to brands that practice philanthropic efforts. By not doing so, you’re at a competitive disadvantage to other brands in your industry who are leading the way. Customers want their purchases to be as purpose-driven as possible. Those who don’t provide that avenue may miss out on the sale.
Ideas For Corporate Philanthropy
How can you live out your values through your business actions?
One popular method is the “You Shop. We Give.” or matching gift program. This gives an item of equal value or a set dollar amount to a charity for every purchase. Bombas socks is an example. They’ve been practicing this for years, almost becoming synonymous with the “buy one, give” one model itself.
Much like the Amazon Smile program, which donates a percentage of every product sold to charity, some brands have a defined giving percentage monetary donation that they take out of every dollar earned. A few will let you pick which charitable organization you give to, furthering engagement a customer gets when they buy.
Employee volunteer opportunities and arrangements where the company donates services or expertise are growing in popularity, as well. Coveo currently encourages employees to take a day or two off each year to give their time and talent to those in need. While we also give funds to worthy causes, helping employees give back has an additional positive impact on employee engagement. It’s great to see employees helping others in more personal ways, from helping on an IT project to teaching those who want to learn new technologies.
While holiday events are common, you don’t have to wait until the Season of Giving to start a project. In fact, year-round initiatives can provide much-needed help to organizations during the months when people aren’t as likely to give.
How Can You Get Started With Corporate Philanthropy?
While corporate social responsibility has become normalized, it can be hard to know where to start. It often starts with a mindset shift. Going from not thinking about it at all to knowing that it can be a core part of your identity and operations. Then, it’s a matter of identifying the causes you love the most.
Vet and choose your charity
This can actually be tricky since vetting a nonprofit organization is a job on its own. Start with organizations you’ve worked with before or have an ongoing relationship with. These organizations are those you’ve already collaborated with. You know you can work together from initial planning to marketing, where sharing assets and doing cross-promotional campaigns have the most impact.
What happens when you’ve identified your goal and your partner? Traditionally, companies might create different groups within the organization to act as administrators of this new effort. You can also choose a one-stop-shop option through a vendor or software service. They can streamline giving, making it easy to further your business in the areas that matter to you.
Or hire a vendor
Because of all the compliance laws and regulations around partnering with nonprofits, including how to hold and transfer funds, it may be easier to work with a service that provides an end-to-end solution from when the customer places an order to when the payment reaches the charity of your choosing, including tax paperwork and vetting of charities to find a suitable match for your values.
Companies like Shopping Gives will provide a turnkey solution that collects funds and makes payments to 501C.3 non-profits. They even will handle all the compliance reporting for you as well.
In a time when tax regulations and financial records are becoming increasingly complicated, it’s important to follow the rules around corporate giving. ‘Cause marketing’ partnerships aren’t easy for small companies, and a vendor that handles the grant details can make all the difference.
How long does it take to set up?
If you choose to handle everything internally, including vetting the nonprofit, drafting up the plan, and creating new marketing initiatives around the partnership, it could take months to get off the ground. Companies that want a quicker launch path can work with vendors to handle the tech and compliance angle, so they can focus more on creating mission statements and developing those marketing assets that will engage customers and boost overall ROI. Out-of-the-box technology solutions can get you started in just a few days.
What metrics can corporate philanthropy affect?
While there’s an intrinsic value in helping, it’s understandable that you’d want to see the needle move from your nonprofit partnerships.
According to Trerotola, brands may see a higher average order, bigger customer lifetime value (CLTV), and an engagement boost in brand channels. Even something like a lower cart abandonment rate can be a worthy outcome. (Customers may ask, “who won’t get help if I don’t finish my purchase?” – making it less likely they won’t check out at all.)
A report by Deloitte reveals that purpose-driven brands grow three times faster than competitors. They also enjoy higher satisfaction rates from both customers and employees.
Pitfalls of corporate philanthropy
As individual humans, there’s no real downside to helping others. But brands are held to a higher standard. They may find themselves under a microscope of sorts when running any charitable campaign. Helping one cause may delight those who also support it, but not everyone shares the same values.
Hard as you might try to avoid getting into politics or taking sides in causes, your support for a charity may be seen as blanket approval for everything that company does and says. If you haven’t created a brand identity around causes or choose to have a universal appeal, look for ways to give back to the local community or charities that touch a larger portion of the general public.
Donating to a local food bank is generally less polarizing than giving to a national organization run by a political candidate. (Of course, if you’ve built your brand on buzz and savor the opportunity to stand for something groundbreaking, doing the opposite may be just what you need to boost engagement.)
Everyone Cares About Something — It’s Time to Show Your Customers
The truth is that customers are already following causes and supporting them in small ways. You likely do much to help those in your community, too. But unless you stitch together your efforts to the expectations of the customer, you won’t be able to use your good efforts to build brand culture or reputation.
While it may seem like you are bragging or using the “do good” branding for selfish gains, the customer truly wants to be part of something bigger. They want their dollar to support things they value. You are doing them a service as much as you are helping your brand develop into something more meaningful than the seller of a widget.
Corporate citizenship isn’t new, but it’s certainly changing. By prioritizing it, you’ll be ready for the next generation of savvy shoppers who want purchases to do more. They want them to solve the problems of the world, too.
This is just one of many ecommerce topics we tackle in the Ecom Edge. Check out all episodes here.