Do startups need CSR? As well as getting a new business off the ground, there are myriad things a startup founder has to worry about. Product testing, securing funding, finding investors, building a competent team – these are just a few of the things that will be preying on their minds. At this stage, adopting initiatives to give back to the society can seem like a time consuming and (as the myth goes) expensive process which is best suited to the ‘big corporates’.
Businesses are finding it increasingly difficult to use traditional parameters to differentiate themselves in the marketplace. This is due to intense competition, which in turn inspires constantly-evolving and innovative methods to build brand awareness attract talent. One of the most effective ways of doing this is by adopting an efficient CSR strategy.
Mark van der Veen, Director of the University of Amsterdam, in his interview with Lysbet Dekker from the Innovation Lab Novum and Tamara Reygers from Foryard, said that since startups often don’t have enough money to invest in projects that diverge too much from their main business goal, it is important to align their CSR and business strategies and define social goals that contribute to their overall company goals.
Here are a few reasons why startups should incorporate CSR into their business plans:
Acquire more customers
As the relationship between business and society becomes increasingly symbiotic, consumers are becoming very selective about their association with products and services. A business’s involvement in CSR has emerged as a major deciding factor for consumers when making their purchase decisions. The 2013 Cone Global Cause evaluation survey revealed that consumers all over the world are supporting causes and are being influenced by the CSR initiatives of companies. According to Edelman Earned Brand Study conducted in 2017, 50% of global consumers can be categorized as “belief driven” buyers who make their decisions to buy, switch or boycott a brand on the basis of their stance on social issues. The study also showed that 80% of global consumers believe that corporations should address crucial social issues. With this in mind, a sound CSR strategy with good marketing and PR promoting your philanthropic activities can give your start-up a competitive advantage and help you acquire more customers.
Job seekers want to work for a Business involved in CSR activities
CSR is not only instrumental in driving sales but has also become a crucial element in how your business is perceived in relation to your employer brand. Making quality hires is a top priority for any startup, but have you considered how CSR can positively affect your recruitment strategy? Most jobseekers, especially millennials,are keen to work with businesses who integrate social and environmental concerns with business operations. Research from the Chartered Institute of Marketing has shown that 81% of millennials would like companies to publicly commit to CSR policies and 82% would “strive to be employed by a company recognised for its commitment to business ethics”. This is a hugely significant statistic as it shows that money and prestige, the traditional drivers of the attractiveness of a workplace, are no longer dominant. In addition to hiring new employees, CSR can also help in retaining current employees. The added incentive of making a difference to the world through the company’s CSR policy leads to a greater feeling of self-worth, and it follows that employees are more likely to stay with an organization that makes them feel relevant to society.
Attract more Investors
Zack Dugow, in his article on LinkedIn, points out that some investors, shareholders and company advisors may view a startup as healthy and thriving if they are taking a few hours away from the office to interact with the community. Similar to consumers, stakeholders will appreciate being connected to a company that’s not only profitable, but also focused on giving back. CSR as a long-term strategy is indicative of growth and shows the investors that you have intention of growing further, not only through the profits you make, but in other ways as well.
Help the community in whatever little way you can
Startups are all about starting small and making it big, defying conventions and achieving the impossible. A little bit of CSR along the way can give your employees the motivation they need to keep forging ahead. The simple fact that your efforts are having a positive impact on society will provide a sense of achievement and is very likely to make your team even more productive. Apart from all the good press and a positive brand image it will establish, your CSR initiatives will make the world a better place to live and, in the process, establish strong connections with the community. You will be known as a business that doesn’t just care about profits but believes in working for the community as well.
Every startup is built on an ‘out of the box’ idea; therefore why startup founders/owners think outside the box while running their business. Focusing on monetization alone is no longer enough to build a successful business; building a positive image is equally important. As a result, startups need to define and work towards key social issues related to their business strategies in order to make a substantial social difference while simultaneously making profits by engaging with consumer and other stakeholders.