Corporate social investment as a driver of customer loyalty at the bottom of the pyramid

Abstract

Companies spend substantial funds on CSI initiatives. Expenditure of such large amounts could hold benefits for companies that go beyond their regulatory compliance. This study focused specifically on how CSI impacted on consumer loyalty at the bottom of the pyramid. The research found that CSI has no direct impact on loyalty and that consumers value the quality of service received more highly than CSI activities by companies. Even in instances where CSI awareness was low, consumers were still willing to recommend the company to others. Some of the research espoused the view that this may be because consumers experienced no direct benefit from the CSI activity. The findings also suggested that at the bottom of the pyramid consumers place a substantial emphasis on building relationships of trust and just because companies invest in CSI activities, this does not on its own lead to consumers trusting the organisation more. The implications of these findings are that when companies try to develop a competitive advantage through CSI, they need to re-examine their CSI spend as well as re-evaluate whether individuals or communities benefit as this has implications for individuals’ loyalty to the company.