Linking CSR and CRM: Shop and save (the environment)

23rd Feb 2007

By Matt Henkes, staff writer

The link between corporate social responsibility (CSR) and customer relationship management is one that’s played down by larger organisations; perhaps, a cynic might suggest, because the strategy behind CSR is essentially driving revenue generation. But with a rising number of industry giants working this angle, even the most soft-hearted of idealists would have to admit that there is something in it...

That’s not to say that such CSR initiatives aren’t praiseworthy, of course. Retail behemoth Tesco is a company whose benefits to the environment, community and the world in general are a feature of almost every consuming experience that its customers undertake.

“Today [customers] want to see more local and regional products,” says chief executive Terry Leahy on the group’s website. “They still want exotic fruit and vegetables, but a growing number want an assurance that they are sourced ethically and sustainably. People want access to healthy foods. They want us to be a good neighbour by being thoughtful about our impact on their neighbourhood, or by supporting local sports teams or providing more jobs.”

“In 2006 we anchored this kind of activity in our business model by adding a 5th segment called 'Community' to our balanced scorecard - we call it our steering wheel,” says Tesco CRM manager Debra Stones. “Community issues are given focus, resource and commitment from the business and everyone in the organisation has a role to play.

“Board level sponsorship helps us all to work across functions and over time we have developed close working relationships between marketing, corporate responsibility, PR, retail and commercial teams.”

Brutal sophisticiation

The brutal sophistication with which customer relationship management and corporate social responsibility are fused together at Tesco is marvellous. “Our 'Green' Clubcard scheme, which was launched last year, encourages customers to do their bit for the environment by offering a Clubcard point for every bag that is reused,” says Stones. “Our target is to reduce the number of bags used by a quarter by 2008.”

Customers choosing to shop at Tesco, can feel that they are helping to do their bit for the environment, gaining points not only for bags, but also for other environmentally friendly purchases. The fact that the company’s environmental drive can also serve as clever marketing capital, while possibly cheapening the environmentally responsible sentiment somewhat, doesn’t change the fact that one of the end results is a social benefit and a happy customer.

However, shopping at Tesco not only benefits the environment, customers are encouraged to get involved in the improvement of our children’s education, by shopping. “Our Computers for Schools scheme has been going for 16 years and has delivered more than £100m of equipment to schools,” says Stones. “We believe that the success of the scheme is based on the partnership that it creates between schools, parents, children and Tesco.”

Tesco isn’t alone in such efforts. Come April, Dell’s UK customers are to be offered the opportunity to calculate their total carbon output in terms of the electricity their Dell appliance uses, then offset these emissions by donating an equivalent amount of cash to a tree planting environmental charity. This initiative has already been introduced in America.

The company’s global recycling policy is one of the first in the computer manufacturing industry. Dell says it has plans to expand its product reuse and recycling options for consumers, and will work with policy makers to promote individual producer responsibility in 2007. “The company has a goal to recover 125m kilos of product from customers by 2009,” it says.

Empowering customers

But whilst some firms shy away from talk of how such initiatives engage the consumer, Dell makes no bones about the impact of its combined CSR/CRM strategies. “The customer experience starts with receiving the best value and continues with the knowledge that we are working with our customers to protect the environment,” it says. “Programmes like 'Plant a Tree for Me' and our global recycling efforts empower our customers to participate with us in making a difference.”

Lena Pripp-Kovac, head of corporate responsibility at Dell EMEA, suggests that being able to put social responsibility issues into the customer service discussion is “a key for success”. What it doesn’t have to date it insists however, is concrete figures to back this up. The calculator scheme was only launched in the US last year and is not available to European customers until April, so Dell says it is yet to establish what the interest it has attracted will actually translate into increased sales. “From our perspective it’s early days,” Pripp-Kovac adds. “But we are certainly thinking that this is the right direction.”

However, few companies are as enthusiastic as Dell to discuss their CSR/CRM strategies. Marks & Spencer, for instance, flatly refused to discuss the issue for the purpose of this article, without giving a reason.

Tesco also remains tight-lipped over the success of its link-ups, though Stones concedes that the company’s history of engaging with its customers has enabled it to respond swiftly to developing consumer trends “often ahead of the rest of the market”. Perhaps it is also too early to discuss how Tesco’s CSR campaigns have translated into customer relationship terms.

What seems certain is that this type of CSR/marketing/PR/retail wouldn’t work if it wasn’t tuned in to the consumer mood. However, it could be argued that the very fact that the frighteningly successful and ruthlessly efficient Tesco has employed the technique is enough to validate its worth in a business sense.

So in terms of how CSR can be used to influence CRM, tapping in to consumer concerns seems to be key. The favoured tactic seems to be to get them involved in a visible CSR scheme. A customer who feels that they are benefiting the environment, their community, even the education of the nation’s children, it seems, by using a particular product or service, is a happier customer; a more lucrative type of customer.

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