Where CSR and CRM collide

23rd Feb 2007

By Neil Davey, editor

For an increasing number of businesses, corporate social responsibility (CSR) is becoming part of the company DNA. Where the next evolution lies is in its integration with other business departments and processes. This can already be witnessed in the marketing field, where businesses are falling over themselves to produce collateral outlining their social and environmental contributions. But for the customer relationship management department, CSR can often be something of a stranger. However, evolution is nothing if not persistent, and leading-edge companies are already exploring exciting tie-ups between the departments and signposting the way for other firms to follow.

“You are starting to see the entry of corporate social responsibility into customer service in some of the leading brands,” suggests Ed Mayo, chief executive of the National Consumer Council. “These two disciplines have been traditionally kept apart. But in theory, if you get that right, and you bring CSR into customer service, and you genuinely create value for customers out of your investment in responsibility then that really is the most sustainable way to build action.”

Geoff Lane, a partner at PricewaterhouseCoopers, and expert on CSR and sustainability, highlights the evolving role of CSR in the enterprise. “Most companies in the CSR space start with the downsides they need to manage – what are the risks and what are the compliance issues?” he says. “The next level of response, which is where a lot of companies have now reached, is operational effectiveness - how they can manage or minimise their environmental impact to reduce energy consumption and costs and make the business more efficient. And then the third level is how they can get strategic advantage out of it. This is where we are seeing the major supermarkets now battling it out.”

Up until a few years ago, only a handful of businesses positioned themselves in this field. But an increasing number of firms are now working to establish themselves at the top-end of being a responsible business, whether that be HSBC with it’s new green advertising campaign or businesses like Unilever and Cadbury-Schweppes buying up ethical brands such as Ben & Jerry’s and Green & Black’s. However, Lane suggests that CSR’s integration with CRM represents another level again, and one that few have yet to scale.

“If you look inside CRM systems and processes, you find a lot of examples of how companies are managing the risk issues that their customers might be concerned about and the operational efficiency area that is connected to price competitiveness,” says Lane. “So it is managing those issues in terms of their CRM proposition. But the extent to which they are really understanding what their customers’ aspirations are in this area is, I suspect, the next wave of innovation.”

Certainly the B2B field has been privy to such considerations for some time, in particular where an environmental or social position taken by a consumer-related company has fed back up the value chain. “If you are a distribution company or any of the product manufacturers anywhere up the value chain and your end customer is a supermarket that claims that the product on the shelf is going to be carbon neutral, what does that mean for you in terms of your own carbon footprint?" Lane quizzes. "It is not just a question of offsetting your carbon emissions.”

He continues: “And if you are supplying a Waitrose or a Marks & Spencer then your market positioning probably needs to be slightly higher level in terms of quality of response to CSR than perhaps if you were supplying one of the other supermarkets. You need to understand how you can meet the brand aspirations of your customers and help them deliver that.”

Emotional drivers

Elsewhere, other firms are exploring the links between customer relationship management and CSR by examining consumers’ emotional drivers and facilitating personal social responsibility. One company that has acknowledged such initiatives is Dell. Michael Dell himself recently described campaigns such as ‘Plant a Tree for Me’ and its global recycling efforts as “empowering customers to participate in making a difference” – a tacit admission of the drivers that the company is tapping into. In the past Dell has used customer advisory council and customer feedback to aid direction, and such communication revealed that customers wanted support to improve their operations in social and environmental terms.

“Dell’s business model is based on direct contact with our customers,” explains Lena Pripp-Kovac, head of Corporate Responsibility at Dell EMEA. “So we want to make sure that we also leverage our customers specifically in this area, to listen to their problems, establish where they would like to benefit and then find new solutions. It is a chance for them to inform us what we can provide and help. That is why we launched the energy calculator for example, so they can go in and calculate what the energy consumption is for their configuration of the product.” Even at Dell, however, it is still early days for CSR-CRM connectivity and Pripp-Kovac admits that although interest in such initiatives has been high, it is still too early estimate the customer impact to date.

The growing phenomenon of Web 2.0 and social networking promises further exploration of CRM-CSR interconnection in the future. Consumer research using ‘voice of the customer’ channels such as social networks is one technique that is expected to gain traction with the CRM community, as it looks to understand customers’ emotional drivers and – as we move into the field of co-creation - encourage innovative solutions. John Hammond, chief executive of consultancy Corporate Culture believes that this will be a valuable channel as CRM and CSR link up and it becomes critical that firms have a clear idea of their customers’ CSR aspirations.

“The thing that influences behaviour, whether it is social change or buying behaviour, is what people believe,” says Hammond. “It doesn’t make any difference if you can say ‘this is the facts about our products or service’. It is what people believe that is much more powerful. And companies should recognise that they do not have control over - and nor can they change - what customers believe. All they can do is understand what they believe and tap into it.”

And this doesn’t only apply to the private sector. “I was in a conference recently on sustainable procurement where a very senior member of the civil service was stating Government aspirations,” says Lane. “And he emphasised that, given the Government’s targets around energy and waste, if you don’t understand how your proposition as a supplier to Government (whether public, central, regional or local) can help achieve its sustainability objectives, then don’t bother to bid. You are going to see a lot of public sector behaviour change and suppliers to public sector clients are going to be forced to develop a much better understanding of their customers’ aspirations.”

CSR and customer relationship management might appear an unlikely couple to some companies, but for a rising number the link-up makes perfect sense. As CSR projects move away from the traditional ‘risk management’ view to a more holistic approach, customer projects will play an increasing role in CSR projects and vice versa.

“The opposite of integration is disintegration,” concludes Hammond. “So the future is very much about integrated thinking across marketing, strategy, communications and business operations. And if you have an integrated approach, your customer relationship management and your CSR are going to drive improvement in your organisation.”

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By Jeremy Cox
28th Feb 2007 10:08

Where you have a firm that really respects its customers, that same cultural philosophy is likely to prevail in a CSR environment.
The converse is likely to be true too.

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