Attaining success through business is often considered to be an end-goal for entrepreneurs. After all, they are incentivized by the growth factor that could amplify their revenues and market share. So, does this mean that companies that achieve high profitability have reached their ultimate objective? Well, not exactly.
Although profits are important for corporations and smaller businesses in order to facilitate long-term operations, this is only one of the three important factors that determine success. The other two major factors are respect for the planet and people. In translation, making money should be equally important to preserving the environment through sustainability and taking care of the community. One could even go as far as saying that business owners have a moral obligation to give back. So, what are some of the reasons why this approach is crucial to long-term prosperity?
The Demand Comes from the Community
Obviously, every company relies on buyers to continue its operations. Businesses that offer products count on people to purchase those products for a price that is higher than the cost it took to produce. Similarly, service-based brands get their earnings from people who pay the workers for their time. Examples include the field of law and accounting where CPAs and Bar-certified experts get paid for a service on an hourly basis.
Well, absent people who are willing to transact with the company, there would be no brand. Just consider, for instance, if Nike was unable to attract millions of passionate customers every year. This would probably mean that they would eventually go out of business due to an obvious inability to cover overhead costs. So, giving back is borderline mandatory to instigate the demand and incentivize people to continue buying. Hence why a lot of organizations rely on things like discounts, rebates, and other programs that simultaneously provide a revenue boost and customer savings.
Customer Loyalty
People frequently find a brand that they rely on for a long time. For instance, those who have been purchasing Apple iPhones over the past years are much less likely to switch to a Samsung Galaxy device. The only instance in which that would occur is if there is a major disruption to the market by some company. In reality, however, that almost never happens. As a result, it is important to reward customer loyalty as people need continued assurance that they are transacting with the right brand.
So, since Apple has a steady stream of loyal buyers, they often take their input when coming up with new phones. This is where things like the cordless headphones and wireless charging came from. Thus, according to a respected professor and clinical researcher, Dr. Summit Shah, facilitating customer loyalty is another great reason for giving back.
Better Living Conditions
Regardless of the aforementioned, the most important reason for giving back is to help the community. Fortunately, there are a lot of ways to go about doing this that make it possible for almost every brand in the world to be philanthropic. Naturally, companies who have financial power can easily help society by making monetary contributions to causes that they care about. This is why a lot of companies donate to non-profit organizations like the Red Cross.
Those who may prefer to be involved in the venture, however, can do so by donating their hours and manpower through volunteer work. A great example of this would be organizations that allow their employees to take a few days off during the year and go volunteer. Lastly, simply offering opportunities to the community in order to help them achieve their goals is a great way to give back. According to Dr. Summit Shah, this could mean inviting local residents to interview for job openings.
