Many years ago, companies thought that they were adding value to an economy by employing people to make good products and services. They added brand thinking later, which strengthened the company’s appeal to customers.
More recently, companies see their reputation as having to possess an additional layer drawing customer respect for the company. As Professor Kash Rangan of Harvard observed: “It is no longer sufficient to compete on quality, price or product innovation alone,” to which Dr. Joseph Plummer of the Advertising Research Foundation added: “The brand is what you buy. The corporate reputation is what you believe in and trust. It’s not an either/or. You need both.”
Though unreported on most balance sheets, brand value and reputation still remain two of a company’s most important assets in today’s hypercompetitive globalized marketplace. In this Marketing 3.0 world, successful modern brands need to reach out not only to the customers’ own hearts and minds, but also to their concern for the hearts and minds of others—and for the sustainability of the planet. We talk increasingly about companies striving to achieve a Triple Bottom Line: People, Planet, and Profits.
Now we have to ask: What benefits and growth come to companies that improve their reputation? We list the following:
•The company is better able to attract and retain world-class talent.
•The company has created an additional level of customer-valued differentiation.
•The company may benefit by attracting more socially concerned suppliers and distributors who are aligned with the company’s values.
•The company has mitigated its risk of being criticized or slandered.
•The company has attracted an additional class of customers who care about the planet.
As wealth and education increase, customers are becoming increasingly aware that their own well-being is tied to the environment’s sustainability and societal harmony.
Business for Social Responsibility is a leading nonprofit global organization that provides businesses with information, tools, training, and advisory services that help integrate corporate social responsibility into business operations and strategies. Their research and experience concludes that socially responsible companies have experienced a range of bottom-line benefits, including several of the following:
•Increased sales and market share
•Strengthened brand positioning
•Enhanced corporate image and clout
•Increased ability to attract, motivate, and retain employees
•Decreased operating costs
•Increased appeal to investors and financial analysts
Here is one interesting story of how a company wishing to grow its business also did some social good:
With 1,200 stores, PetSmart is North America’s largest specialty retailer of pet products and services. But instead of selling dogs and cats, as many pet stores do, PetSmart decided to donate space for in-store adoption centers for homeless pets. Local animal welfare organizations maintain the highly visible in-store centers in coordination with PetSmart employees and keep 100 percent of their adoption fees. The adoption centers generate store traffic on a daily basis from consumers looking for a pet to add to their families. After all, every adopted pet needs pet food and accessories—and customers can immediately buy these at the same location.
Every adopted pet creates a new customer for PetSmart. More than 403,000 pets were adopted in PetSmart stores in 2010. Sales revenue far exceeds the estimated $13 million of contributed real estate floor space. In this way, the company has grown its business revenue by doing good works—and has exhibited real out-of-the box thinking. The company is earning more revenues at a lower cost by facilitating nonprofit adoption than they could ever have made by selling pets and pet products and accessories. And PetSmart helped save the lives of more than 5 million animals between 1994 and 2012.
Contributed to Branding Strategy Insider by: Philip and Milton Kotler, excerpted from their book, Market Your Way To Growth with permission from Wiley Publishing.
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