Business Ethics for Building Brand Image and Customer Loyalty

Environics International surveyed 25,000 people in 23 countries which revealed that 50% of the respondents take into consideration the social behavior of companies, while one out of five said that they would object to poor social performance by speaking against its actions or boycotting the products of the company. This indicates the importance of ethical practices in building brand identity and perception of customers. Ethical business practices lead to increased customer satisfaction and repeat customers. Similarly, customer service departments responsible for directly interacting with customers also need to keep in mind ethical norms when dealing with customers. Being ethical is necessary for building customer loyalty. Some of the important ethical considerations are as follow:

Keeping Promises

The advent of digital media has pushed companies into a race to gain prominence and attention from customers. In order to gain popularity, some companies use creative marketing techniques and at times hold back information in an attempt to increase sales and win customers over from the competitors. One of the first and foremost considerations when it comes to ethical decision making is honesty and transparency. It is essential to be honest with your customers and inform them about your policies, strengths and weaknesses of your products. At the same time, if a company promises something, it must deliver on it as this impacts the credibility and brand image.

Customer Service does not end when the transaction goes through, since many products come with warranties and certain claims made by the company. It is important to honor the warranty promises and ensure that the products meet the quality standards as advertised or claimed at the time of transaction.

Ethical Advertisement Standards

Although advertisements have become an important element in the business world, it must be ensured that ethical standards are followed and they are honest in the depiction of the products and services being promoted. Companies should refrain from promoting products and services in a misleading manner, which creates ambiguity or confusion. Inappropriate use of language and images should be avoided. Advertisement campaigns that objectify women (or men), might work in the short-run, but they are likely to tarnish the brand image eventually, since a vibrant social media allows critique from all quarters. Moreover, beauty products should not be reinforced as a “Need” to look beautiful and perfect, but should be advertised as a way to complement. For example, Bobbi Brown in their brilliant ad campaign used the tagline ‘Confidence is everything, but a little makeup can’t hurt‘. Companies should invest in presenting heartwarming and inspiring stories that help boost confidence and self-esteem.

Non Discriminatory Attitude

Businesses must maintain a non-discriminatory attitude towards all customers, which means that a uniform level of quality of goods and services should be offered regardless of which segment is being served.

Human resource management should adopt an equal opportunity employing policy, not discriminating in any way. Additionally, businesses should develop a clear and stern workplace harassment prevention policy to ensure the welfare of all employees.

Corporate Social Responsibility

Corporate social responsibility is a self-regulatory initiative which aims to take into consideration the environmental and social impact of business operations, with its augmentations ranging from supporting a social cause to proactively involving representatives from pressure groups in the decision making process.

Being environment friendly, supporting a social cause like education, paying fair wages and having a sound human resource policy are all part of corporate social responsibility. Many businesses support a charitable or social cause by donating money from the profits or forming an organization by diverting resources towards a particular cause. Research has shown that there is a positive correlation between CSR practices and brand loyalty for a particular firm. In a study conducted by Saunders (2006), it was revealed that over 52% of consumers are more likely to recommend a brand that support a good cause compared to the one that does not. On the other hand, 55% of the consumers claim that they are more likely to buy from brands that support a good cause even if there are other cheaper alternatives available.