How Corporate Social Responsibility Influences Buying Decisions

Updated 03/25/2022

The beliefs and values that drive a company’s brand are becoming increasingly important as people are more aware of the impact their buying decisions can have on the world around them.

Clutch surveyed 420 consumers in the U.S. to learn how corporate social responsibility influences how people perceive brands and where they choose to shop.

We found that people think it’s important for businesses to demonstrate social responsibility and take stances on current social movements.

Businesses can use this report to learn how corporate social responsibility impacts their public relations (PR) strategies and what they should consider before adopting a policy of social responsibility or taking a stance on a social movement.

What is Corporate Social Responsibility

Corporate social responsibility refers to a business entity making a commitment to positively contribute to societal needs. Corporate social responsibility actions may involve philanthropy, activism, volunteering, charity, and more.

People Support Companies That Share Their Values

People see their buying decisions as a way to support the issues they care about.

Three-fourths of people (75%) are likely to start shopping at a company that chooses to support an issue they agree with.

Companies with values that align with those of their customers create a sense of community and solidarity around their brand.

“When a company shares their consumers’ views and values and helps contribute to solving a problem everyone agrees is a problem, consumers are going to want to keep working with or buying from that company,” said Josh Weiss, CEO of 10 to 1 Public Relations, a PR firm in Scottsdale, Arizona.

Consumers hold the power of choice over businesses and can use their money as a tool to affect change and influence how businesses operate.

“Whatever people purchase is an extension of their being and personality,” said Ketan Kapoor, CEO and co-founder of Mettl, an HR technology company. “When they are seeking products, they are not only looking at the direct benefits of the product, but also how it affirms their own beliefs and values.”

When people buy products or services, they view these buying decisions as an extension of their beliefs and will readily support companies that share their values.

For example, Bea Tanese, a socially-conscious consumer, values companies that put people, animals, and the environment first.

“A company's ethical standards are extremely important to me,” Tanese said. “I recently updated all of my skincare and beauty products to be cruelty-free and would not consider giving money to a company that is profiting from heinous malpractices against animals, the environment, and other human beings.”

Tanese looks for cruelty-free logos before buying skincare and beauty products and won’t buy products from companies known to test their products on animals.

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People are aware of how their buying decisions impact the world around them and tend to seek companies with purpose-driven brands that support their beliefs and priorities.

Consumers Prioritize Environmental and Human-Focused Causes Over Price

Affordability has always fueled people’s buying decisions: No one wants to pay more than they have to for a product or service.

Price, however, is not always the most important factor people consider when choosing a company or its products.

Less than half of people (44%) rank price as one of the three most important attributes of a business.

More people rank a company’s commitment to the environment (71%), social responsibility (68%), and giving back to the local community (68%) as the most important attributes of a business.

Environmental and human-focused causes are more important to people than price. As a result, most people are willing to pay a little more for a product or service coming from a socially-conscious brand.

“Am I willing to pay $5 more for a carbon-neutral footprint? Yeah,” Weiss said. “Am I willing to pay $1,000 more? No. It depends on the company and the product, but I believe a lot of people are willing to pay a little bit more.”

TOMS, for example, is considered a pioneer among socially-conscious brands with their ‘buy a pair, give a pair’ business model.

Consumers have access to a variety of products, many of which can adequately meet their needs. This access to more choice allows people the luxury of choosing products from brands that share their values.

“Are there shoes cheaper than TOMS that are just as well made? Absolutely!” said Kaitlyn Dmytryszyn, social activist and socially-conscious consumer. “But I would rather spend more on a company that supports the same things I do.”

People view their buying decisions as an extension of their beliefs and think consciously about a brand’s beliefs and values before making a purchase.

Consumers Think It’s Important for Businesses to Take Stances on Social Movements

As recently as a few decades ago, a general PR rule-of-thumb for companies was to avoid voicing opinions on controversial topics and social issues. Now, however, companies are expected to speak up.

Seventy-one percent (71%) of people think it’s important for businesses to take a stance on social movements, such as those involving gender, gun control, the environment, politics, and human rights.

The absence of leadership from traditional power brokers, such as politicians and religious leaders, is cited as a reason more people are looking to businesses to speak up and fill the leadership gap.

“There’s been a lack of leadership in other sectors, whether it’s government or religion,” said Steve Cody, CEO of Peppercomm, a digital communications and public relations firm in New York City. “These people who others expect to lead and make statements are either not doing it, are saying the wrong thing, or are caught up in their own controversies.”

This shift in people’s expectations means that businesses need to work with their public relations firm to update their strategies to reflect how and when to speak up on important issues.

Cody designed a program called StandSmart to help businesses keep track of trends, movements, and events that are relevant to their brands and values.

StandSmart’s analytics tools help businesses track trends and discussions about specific topics by scanning for keywords. The program triggers a warning if it detects a rise in traffic around specific keywords.

“We can start gearing up a week or 10 days in advance and get the company prepared to respond when a flashpoint does occur,” Cody said. “It’s like an insurance policy.”

Tools like StandSmart can help businesses prepare statements in advance but only if these businesses already know their values and which social issues are most important to their brand. This is why an audit is the first step in StandSmart’s program.

“Your corporate purpose is your North Star in determining whether to respond to certain movements,” Cody said.

“Your corporate purpose is your North Star in determining whether to respond to certain movements."

People increasingly expect companies to voice opinions on social movements, which presents new challenges for businesses to navigate. 

Companies Must Pair Brand Activism with Supportive Action

Companies need to keep in mind which issues are relevant to their customers, brand, and corporate purpose. It's important for consumers to understand the values and beliefs of brands they associate with.

However, it's also imperative that companies only take stances on issues that are relevant and meaningful to them — otherwise, they risk coming off as insincere. 

For instance, following George Floyd's death in 2020, many companies vocalized support of the Black Lives Matter movement. While support is important, some businesses ended up looking performative in consumers' eyes. 

One of these companies was the popular coffee company, Starbucks. The chain found itself in hot water after speaking in alignment with BLM online but not allowing employees to wear clothing or accessories in support of the movement. 

Source: Starbucks

After receiving pushback, Starbucks quickly changed their policy on uniforms to align with their messaging online. 

This is only one of many instances of companies showcasing brand activism on their websites and social media but falling short, at times, when it comes to action. 

Experts recommend that consumers check the following to learn more about how companies actually feel about social issues:

• Where companies invest their money?
• Does this company have a track record of a certain behavior?
• What does the executive team look like at the company?

Consumers want to see brands stand up for what's right, but they want them to be doing so genuinely. People remain skeptical of brand activism and want to see vocal support paired with meaningful action. 

People Are Divided Over Whether Businesses That Support Social Movements Are Genuine

It’s no secret that companies are for-profit organizations and a better brand image likely means more customers. But how important are the reasons why a company chooses to support a social movement?

The majority of people (71%) think that businesses should take a stance on social movements, though they are divided over why they think businesses choose to support certain movements.

Twenty-nine percent (29%) of people think that businesses choose to support social movements to earn money. Approximately the same number of people (28%) think it’s because businesses care about the issues a movement addresses.

These findings illustrate people’s uncertainty about a business’ intent, authenticity, and transparency when it takes a stance on social movements or adopts policies of social responsibility.

Nike’s 2018 “Dream Crazy” campaign, for example, featured 16 athletes who overcame obstacles, pushed boundaries, and challenged people’s perceptions of what an elite athlete can look like.

Notably, it featured former NFL Quarterback Colin Kaepernick as the commercial’s narrator.

Source

Since deciding to kneel during the National Anthem, Kaepernick has been a figure of controversy. Some people argue that kneeling was his effort to bring attention to the injustices African Americans face in the justice and legal systems and within his rights, while others declare his actions unpatriotic.

When Nike adopted Kaepernick as its poster-child, people’s reactions were mixed. Some who disagreed filmed themselves burning Nike shoes, leading many to wonder whether Nike’s decision would doom its brand.

When Nike’s commercial was first aired, its stock dropped but then increased dramatically.

“People started burning Nike shoes,” said Fabian Geyrhalter, CEO of FINIEN digital marketing and branding agency. “Everyone thought this was the biggest brand fail, but in reality, Nike’s stock went up after two days of going down. They had the best quarter they’ve had in a long time.”

Nike’s consumer base supported the message of inclusion in the ad and showed their support by financially supporting the brand.

Jen Fry, a social justice educator who uses education to empower athletes through an anti-racist lens, thinks that Nike’s decision was purely data-driven.

“They made their decision with intent,” Fry said. “It was very data-driven, knowing who their clientele is and what they’ll accept.”

Nike’s “Dream Crazy” campaign perfectly aligned with its brand values, relevant social movements, and the values of the majority of its consumer base.

“There’s nothing wrong with social responsibility being a strategic decision, but it should also be one that you strongly believe in and are willing to stand up for,” Weiss said.

“There’s nothing wrong with social responsibility being a strategic decision, but it should also be one that you strongly believe in and are willing to stand up for."

Nike’s decision was strategic, but that doesn’t necessarily mean it was inauthentic. Still, people are divided in their perceptions of businesses that speak up on social issues, whether their actions are genuine, and whether it matters.

Companies Should Consider the Risks of Choosing Sides on Social Issues

It’s often not enough for companies to sell great products – people want to know what a company stands for and whether its brand is fueled by beliefs similar to theirs.

People opt to shop at companies with beliefs that mirror their own. More than half of people (59%) are likely to stop shopping at a company that supports an issue they disagree with.

This consumer behavior can be explained by the Balance Theory, which states that people, businesses, and values share a series of relationships.

If a business shares the same values as a consumer, the consumer will likely view the business more positively.

Conversely, if a business supports values that go against those of a consumer, the consumer will likely view the business more negatively, even if he or she liked the business before.

“We tend to like what is associated with what we already like,” said Vassilis Dalakas, professor of marketing at California State University San Marcos. “However, as you’d expect, just as we tend to like what is associated with what we like, we also tend to dislike what is associated with what we dislike.”

Dalakas used Patagonia’s support of protecting the environment and public lands to illustrate the relationship between business and consumer values.

Environmental issues, such as climate change and national parks, have become increasingly politicized within the last few years.

In November 2018, Patagonia endorsed two political candidates who prioritized protecting national parks, encouraged their social media following to ‘vote for public lands,' and announced they will donate the $10 million dollars they saved from their tax break to different environmental and conservation groups.

According to Balance Theory, Patagonia’s stance on these issues will appeal to the majority of its consumers but may alienate those who disagree with Patagonia’s values.

People choose companies they agree with, but, similarly, may choose not to support companies they disagree with. 

Younger Generations Expect Businesses to Be Socially-Conscious

People expect more transparency from companies and are more aware of the impact of their buying decisions, which matters especially to younger generations.

Seventy percent (70%) of Generation Xers (ages 35-54) and 54% of millennials (ages 18-34) are likely to stop shopping at a company that chooses to support an issue they disagree with compared to 37% of baby boomers (ages 55+).

People expect companies to adopt socially responsible policies and take stances on social movements, and this is not a temporary trend. Rather, it marks a new era of the socially-conscious consumer.

“I believe we’re only a decade or so away from sustainability being the only option for conducting business at scale,” said Jack Butcher, Creative Director at Opponent, an agency specializing in brand strategy. “The generation of people that will occupy the roles that dictate how business is conducted will move toward a zero-tolerance stand on cruelty and waste. Those changes will force businesses to adapt or die.”

“The generation of people that will occupy the roles that dictate how business is conducted will move toward a zero-tolerance stand on cruelty and waste. Those changes will force businesses to adapt or die.”. 

As millennials and Gen Z gain more purchasing power, it will only become more important for businesses to adapt to these evolving standards.

Companies Can Avoid Polarizing Their Consumer Base by Considering Their Brand Purpose

Businesses can minimize the PR risks associated with taking stances on social movements by identifying which issues are important to their customers and which closely align with their brand.

Navigating the evolving media landscape and learning when to speak up on social issues present an infinite list of challenges for businesses.

Company leadership must consider their employees, investors, and customers when defining their corporate purpose, sketching out their brand values, and responding to today’s social movements.

Need help navigating your brand's social responsibility? Consider reaching out to a top-ranked PR firm.