Microsoft Tops Corporate Social Responsibility Rankings
Tying CSR to customer relationships "absolutely can be done -- needs to be done," said Vince Molinari, CEO of Gate Global Impact. "As we evolve, the loyalty of a brand is beginning to be determined by social responsibility. Perhaps in its first iteration it was marketing and branding, but now it's being driven by the demand and the financials of the constituents."
10/04/13 5:00 AM PT
Microsoft has topped the Reputation Institute's Global CSR RepTrak 100 Study for the second year in a row.
The institute surveyed 55,000 consumers worldwide about their attitudes toward the reputations of companies in terms of corporate social responsibility.
Google, which was No. 2 last year, fell to third place.
Although the world's largest companies spend an average US$50 million a year on CSR programs, they are not getting their message across to consumers, and this "highlights a major issue for [them]," said Kasper Ulf Nielsen, executive partner at the Reputation Institute.
CSR reputations directly impact customer relationships. The study found that for every 5 points a company's CSR reputation goes up, recommendations from consumers increase by 9 percent.
However, relationships and reputations cannot just be data-driven, because they "have an added component of emotional and psychological aspects by the users," Mike Muhney, founder and CEO of vipOrbit, told CRM Buyer. Muhney is one of the cocreators of ACT! Software.
"There needs to be a total reorientation towards the 'why' of CRM that, if successfully done, should have the consequent benefit of an improved reputation," Muhney remarked.
A Reputation Institute spokesperson was not immediately available to provide further details.
How Tech Companies Performed
Four of the top 10 companies in the study are tech firms.
Leader Microsoft scored nearly 73 percent; third-place Google 72.71 percent; Intel scored 69.32 percent to climb to seventh place from last year's 12th; and Apple scored 69.21 percent, falling to ninth place from last year's fifth.
However, the scores don't tell the full story. The Reputation Institute mandates that a CSR score of 80+ is excellent; 70-79 percent is strong or robust; and 60-69 percent is average or moderate.
The survey looked at 100 of the most highly regarded companies across the 15 largest markets in the world covering 75 percent of the global GDP.
Participants in the study, which was conducted in January and February, rated companies in seven categories: products and services; innovation; workplace; governance; citizenship; leadership; and financial performance.
Citizenship, governance and workplace were the factors driving an enterprise's CSR ranking.
It's the Customer, Stupid!
There is a clear tie-in between CSR scores and customer relationships.
A CSR score of 80+ indicates 64 percent of consumers would buy a company's products; 59 percent would recommend them; 50 percent would welcome the company into the community; 47 percent would work for it; and 35 percent would invest in it.
The corresponding figures for a CSR score of 70-79 are 55 percent for purchases; 50 percent for recommendations; 47 percent for welcoming into the local community; 42 percent for willingness to work for the company; and 33 percent for willingness to invest in it.
A CSR score of 60-69 suggests 41 percent of consumers would buy the products; 38 percent would recommend them; 39 percent would welcome the company into the local community; 37 percent would work for the company; and 31 percent would invest in it.
So tech companies are leaving money on the table.
Microsoft declined comment, and Google did not respond to our request to comment for this story.
CSR and the Customer
Tying CSR to customer relationships "absolutely can be done -- needs to be done," Vince Molinari, CEO of Gate Global Impact, told CRM Buyer.
"As we evolve, the loyalty of a brand is beginning to be determined by social responsibility," Molinari continued. "Perhaps in its first iteration it was marketing and branding, but now it's being driven by the demand and the financials of the constituents."
Investing in CSR
Executives believe in the value of CSR -- 63 percent expect reputation management to be a higher priority in the future, and 60 percent say it increases customer retention, sales and revenue, and market share.
However, they are reluctant to invest in CSR because "corporate responsibility is still equated to philanthropy in many organizations and hence given short shrift when it comes to strategic formulation and implementation," said CB Bhattacharya, a professor in corporate responsibility at the European School of Management and Technology.
Further, there is a lack of data to prove the ROI on activities.
Not to worry, Molinari contended, because investing in CSR is "like an investment in R&D. It's going to have a longer-term systemic change."