Here’s another possible reason for companies to invest in corporate social responsibility (CSR) programs: They might help when something goes wrong with a product or service.
According to a new study in the Journal of Public Policy & Marketing, customers may be more willing to forgive companies for mishaps when they donate money to good causes, especially if those causes align with things that customers care about.
Researchers conducted two experiments in a coffee shop, testing customer reactions to receiving the wrong coffee and waiting a long time for it. In the first, volunteers were told either that the company donated 15% of profits to environmental causes, 2% of profits, or nothing. The 15% group were less angry and less likely to spread “negative word of mouth”–especially among those customers who cared a lot about the environment.
The second experiment was similar but gave volunteers a choice between environmental, community, health, and education causes. “Our thinking was that by giving people choice we could align values between customers and the firm, and that would translate into more positive emotions and behaviors,” says lead author Jeff Joireman, a professor at Washington State University.
It did translate. “Giving people a choice over increased customers’ perception that their values overlapped with the firm’s. When that happened, it reduced anger and made people feel guilty that they would think of harming the company through negative word of mouth,” Joireman says.
Like many studies exploring the business case for CSR, the study isn’t conclusive. It involved only a few hundred volunteers in a controlled environment; it didn’t involve actual customers in real-life. Still, Joireman thinks it could reinforce the attraction of CSR programs. “I think it has the potential to reduce negative reactions to service failures as long as customers believe that CSR is consistent with their own values,” he says.