The importance of engagement

Research conducted by Effective Measure, an international media planning and audience profiling company, shows that when making purchasing decisions on new brands and services, Australian consumers put price first, whether the brand is socially and environmentally conscious second, and whether or not they are supporting social causes third.

In terms of new brand awareness, the research revealed that 46 per cent of respondents would buy a new brand if it supported a cause they cared about, demonstrating the importance of socially responsible initiatives to any business.

“The holy grail for brands is relevant consumer engagement,” says Effective Measure account manager Claudia Barriga-Larriviere.

“Effective Measure’s research is clearly showing that brands with a conscience are creating consumer grip …

Brands aligning themselves with causes are not only securing more consumer consideration, but are also earning their dollars and support,” she adds.

To identify which causes to support, businesses must identify causes important to their target market. Social responsibility and community involvement should not be a ‘one size fits all’ proposition.

“By understanding what motivates and inspires consumer involvement, brands will resonate deeper with their optimal consumer group,” says Ms Barriga-Larriviere.

Miguel Oyarbide, a consultant at the Australian Centre for Corporate Social Responsibility (ACCSR), says a personalised approach to CSR is vital to a program’s success.

“A lot of what any company needs to think about when approaching corporate social responsibility is around realising there is no ‘one size fits all’ solution.

“They have to look at what they are doing, where their impacts are and how they can create opportunities to improve both the performance and the impacts they generate as a result of their actions,” he says.
Identifying what causes are most important to the community your business serves is vital to creating community engagement, says Mr Oyarbide.

“They have to look at who their stakeholders are, what their unmet needs are,” he says.

“An organisation is not like a floating entity that has no connections to the environment or society; it’s part of both things and the impact that it generates in society, the economy and the environment all need to be taken into account because eventually they affect the performance of the business.”

CSR has evolved in recent years to become more than just donating money. Programs now need to be more strategic to facilitate a deeper connection with the community. Very few initiatives can build brand recognition and brand reputation as effectively as a demonstrated socially responsible program.

Mr Oyarbide says successful CSR programs give businesses a ‘social licence’ to operate within their community.

“The social licence to operate is the level of acceptance or approval that a community grants to a company,” he says.

“There are many components that are a part of it, like involvement in the community, proving that they are not only there to take advantage of the economic situation, that they are there because they believe in the community and because they want to be a part of it as a respectful and kind, caring neighbour – another member of the community.”

AN INDUSTRY INVOLVED

Australian financial institutions have adopted CSR campaigns with great enthusiasm over recent years.

As an example, summer bushfires in Western Australia prompted all major banks – including subsidiary brands such as Bankwest and St George – to suspend loan repayments, waive certain fees and allow victims to access both term deposits and other loan products with no extra costs involved.

Alongside these measures, these institutions also made significant cash donations to assist those affected by the fires. Bushfires are a disaster that many Australians can relate to, which is why these offers are so well received.
Not just in times of disaster, the Australian banking sector does a lot within the community all year round.

Teachers Mutual Bank (TMB) was recently recognised as a global leader in community investment, topping the London Benchmarking Group’s (LGB) Australian and New Zealand index for 2013.

LBG is a group of over 300 leading companies worldwide working together to measure and benchmark corporate community investment (CCI) across 130 countries. LBG is the only internationally recognised methodology for measuring and benchmarking CCI.

The mutual’s total community investment of 4.1 per cent of pre-tax profits was 2.4 times the global LBG average. TMB runs a variety of community investment campaigns, all of which are focused on building the bank’s relationship with the education sector.

“Giving back to the community is one of our core values and the education sector is obviously where we play, so we are very keen to support them and the community they participate in,” says national manager for third party distribution at Teachers Mutual Bank, Mark Middleton.

Creating programs that specifically target the education sector allows TMB to focus their community involvement around potential customers.

Among other programs, the bank sponsors the schools spectacular eisteddfod event, contributes to schools’ environmental projects, and offers scholarships and other assistance to those studying teaching at university.

“We have what’s called a Beginning Teachers program, which assists those studying teaching to buy a car when they get their first job or contract with the department of education.

“We enable them to go out and buy a motor vehicle and defer the payments until they start work,” he says.

Targeting students at university who are about to enter the education sector plays a big part in many of TMB’s CSR initiatives.

“If we can get them in and have these students form a relationship with us, hopefully they will continue to bank with us right through their banking life,” says Mr Middleton.

CSR initiatives form part of the bank’s marketing campaign and are measured as any other marketing program.

“We do our returns on marketing investments and we do measure what happens. We have the capability and technology here to segment those particular age groups, so we can see how sticky those particular new opportunities are,” says Mr Middleton.

“The younger demographic are looking to engage in companies that are more socially responsible and who are giving back to the community, so certainly we are leveraging off that in a very tangible way,” he says.

For brokers, this type of community involvement offers a great sales tool when presenting a client with a TMB loan.

“There are many educators out there who have a very highly developed social conscience and as a consequence of that, Teachers Mutual’s record on social responsibility would have a very high appeal for that client and then support what recommendations that broker is actually making.

“We are 100 per cent committed to doing what’s right for not just our members but the staff and the environment – it really ticks all the boxes for a broker to recommend us above any other financial institution,” says Mr Middleton.

CLOSER TO HOME

In an increasingly competitive market, brokers can use social responsibility and community involvement to differentiate their business and attract new clients. The very personal service provided by brokers lends itself particularly well to these campaigns.

For Victorian broker and owner of Foster Ramsay Finance Christopher Foster- Ramsay, community involvement is an important part of his marketing program and a point of difference for his business.

As well as donating time and money to a variety of worthy causes, including the Carbon Offset Tree Planting program, Mr Foster- Ramsay has committed to donating five per cent of all upfront commissions to the L’il Aussie Prems Foundation (LAPF).

The LAPF is Australia’s largest online support community and forum for the families of premature and sick newborns, and is a cause particularly important to Mr Foster-Ramsay.

While he doesn’t expect any leads to come directly through the charity itself, he says it is a great selling point for his business, showing he is willing to give back to the community.

This, he says, is something many potential clients respect and value.

“When I bring up the notion of the donations and our community support, it’s very well received from the clients,” he says.

Mr Foster-Ramsay’s charitable activities are all detailed on his website and included in a tag line within his email signature.

He says his efforts increase his customer engagement and help him build stronger client relationships.

“By investing in our community and assisting charities and foundations that we are passionate about, we have been able to increase our customer engagement. Feedback from our clients would suggest that they, in part, form their decision to use our company based on the ethical and social values of our business, our principals forming a synergy with the clients’ personal values,” he says.

An impressive social standing can also increase customer retention.

“Retention is very important to our business and we have been able to demonstrate that our clients feel a sense of social responsibility by partnering with us. And when combined with the ‘total package’ they receive from us, they are less likely to go elsewhere” he adds.

Mr Foster-Ramsay says he promotes his business’ position and action plan to the local community to engage others (either as clients or donors to the causes) and raises awareness of its position with current and prospective clients as well as strategic partners.

“I bring it up in a business-to-business capacity when I’m looking at bringing on new referrers. I make sure I point out our community support and involvement as a way to ensure I’m dealing with likeminded partners,” he says.

This community and charitable involvement has also produced a very strong corporate culture amongst his own staff.

“By adopting a strong policy position on the reasons for, and ways to support our community, our business has begun to build a very strong corporate culture,” he says.

“Our aim is to add to our corporate culture in the future by allowing any employee the ability to volunteer with an organisation we support for one day per quarter.”