While corporate social responsibility is claimed to be a primary business objective of most major brands, the reality is, for many, it's not given much thought. Unfortunately, brands are yet to realise the full potential of shared value creation.
For the lucky few that get it, they've seen the direct correlation between their socially responsible activities and sharing their customer's values and aspirations. The more brands participate in and recognise the needs of their community, the stronger the relationship with their customer base. What's more, the stronger the relationship, the more engaged customers become.
There are four characteristics of value co-creation, as defined by Kumar et al (2010). They are:
1) Customer referral value (CRV) which reflects how engaged customers can help brands attract and retain customers
2) Customer lifetime value (CLV) which is the current value of expected financial benefits a customer will provide to the brand in their lifetime
3) Customer influencer value (CIV) which includes information sharing, interaction, eWOM and customer citizenship behaviour; and
4) Customer knowledge value (CKV) which is the customer's participation in the co-creation of products and services that continues to meet consumer needs
Which one are you pursuing? Perhaps it's a combination of the above.
Michael Porter first introduced the idea of shared value creation. For him shared value meant that brands would prioritise the needs of the community but not at the cost of the business itself. In many cases, this is the foundation of sponsorship.
Sponsorship is all about creating shared value. The partnership should be one that is built on understanding the objectives of each party and working together to meet those objectives. Sponsorship-seekers should be asking potential sponsors a series of questions to understand their needs. Likewise, sponsors need to assess the opportunities presented by the rights-holder to know if this is a relationship that is going to work for them. The end goal should be one that is mutually beneficial so the relationship can grow year-on-year taking all the good things from the previous year and building on them.
Prioritising value co-creation does not necessarily mean your brand is putting profit beyond purpose. While undoubtedly, it's good for business, we also need to be productive to produce sustainable communities that are self-sufficient. After all, it's the products and services that we are collectively producing that enables communities maintain a growing economy. At times like these, this is even more critical.
The reality is, there's not many companies that are true social enterprises where the needs of the community come first. The companies that are doing the best are the ones that have actively embraced their social responsibility and are long-sighted enough that they collaborate with other like-minded organisations and plan for the future.
