Brand building is crucial for businesses to maintain loyalty and a loyal customer base in a competitive business landscape. This requires effective financial management, public relations, and corporate social responsibility. By combining these fundamentals, brands can achieve success beyond their imagination. This article examines the impact of effective financial management and corporate social responsibility on Nigerian brands, aiming to strengthen top-business analysts’ knowledge in the highly competitive Nigerian market.
“A competent financial team, including managers, accountants, and auditors, is essential for setting financial principles.”
The foundation: Effective financial management
Effective financial management is crucial for business growth and fostering talent, ideas, and efforts. It involves organising and directing financial resources within an organisation, ensuring clarity and transparency in financial records. This approach also aids in long-term sustainability, providing stable ground for success even in turbulent markets. Credible financial plans are in place to ensure a stable financial record, allowing board members to have direct insight into financial flow.
Financial stability is crucial for innovation and diversification in businesses. A competent financial team, including managers, accountants, and auditors, is essential for setting financial principles. These principles include tracking expenses, building buffers, managing debt, saving, reinvesting, and reviewing financial plans. Adherence to these principles leads to effective financial management, providing immeasurable benefits.
Apple incorporation is a clear case study in this regard. In a recent reveal on the company’s financial historical record, its buoyancy in financial management shows so much strength that it led to new investment in renewable energy and initiatives to reduce global carbon emissions. This investment is strategic as it not only offers gains, it also directly impacts society, giving substantial credence to the brand. Clearly, this is the melting point between financial stability and corporate social responsibility towards brand building.
Read also: Leveraging effective advertising for brand building
The moral compass: Corporate social responsibility
Effective financial management in a brand can drive customer loyalty and retention through public relations and corporate social responsibility (CSR). Public relations involve activities that foster a mutually beneficial relationship between a brand and the public, especially to its target audience. CSR measures a brand’s moral stance, but without proven benefits, brands may face cancellation, damage to their reputation, and lower respect.
Whether it’s through events, communal infrastructural support, scholarships, or sponsorships, it all counts as CSR. Current market trends have discovered that the composition of unique brand identity comes from consumers, who are now more concerned about a brand’s position towards contributing goodwill to society. This isn’t far fetched from Tony Elumelu’s UBA scholarship scheme, showing that they recognise the importance of free education and are willing to help the underprivileged with funding inabilities to attain education. This indirectly sets the bank apart and increases their customer base.
Attesting to the effect of corporate social responsibility, a study by Cone Communications during a survey carried out in 2023 collates that 87 percent of consumers agree to patronise a brand because they have either advocated, solved, or impacted society through sponsored activities. Contrarily, 76 percent of the study’s respondents vouched not to patronise brands who are only about their product or service without any collective impact. This data further proves the seriousness of CSR and its effect on consumer preferences and behaviour, and, by extension, brand loyalty.
The relationship between financial management and corporate social responsibility (CSR) is synergistic, with financial stability allowing CSR activities to thrive. An effective financial team can manage and cater to CSR activities, improving the brand’s reputation, engagement rates, and overall financial performance. Harvard Business School findings show that businesses with high CSR investments have an average 6 percent return on equity. Continuously navigating these cycles is crucial for brand building, customer loyalty, employee satisfaction, and a positive reputation.
The journey to brand building must be embraced with open arms, requiring sacrifices and compromises. Even after CSR activities, brand building continues. It’s an endless pursuit, even after securing respect and tangible trust from consumers. The service and actions of a brand must be continuously tailored to meet consumer expectations. Crowning the continuous public relations efforts, brands must ensure that their financial resources are effectively managed, as strong financial will is a sign of brand reliability and trustworthiness, also contributing to positive brand reputation.
Challenges and considerations
It’s no doubt that financial management and CSR can solidify a brand’s identity; however, the process to achieve this presents some limitations. CSR investments usually fly beyond budget. It takes high principles, especially from bigger companies, to spend within a sufficient budget. CSR investments aren’t small in any way, hence puts a strain on the financial flow of a company. It’s therefore advised that before brands, particularly emerging ones, embark on CSR programs, enough savings should be made, regardless of the number of years it takes.
The relationship between financial management and corporate social responsibility (CSR) is synergistic, with financial stability allowing CSR activities to thrive. An effective financial team can manage and cater to CSR activities, improving the brand’s reputation, engagement rates, and overall financial performance. Harvard Business School findings show that businesses with high CSR investments have an average 6 percent return on equity. Continuously navigating these cycles is crucial for brand building, customer loyalty, employee satisfaction, and a positive reputation.
Conclusion
In conclusion, the interplay of financial management and corporate social responsibility breeds brand building: when the financial resource of a brand boasts of stability and strength, it can properly propel the course of actions for CSR programs, positively impacting a brand’s reputation and relevance. In the same vein, if CSR activities are properly carried out, it results in high engagement, yielding financial gains for a brand.
Brands with intentions to grow and stand a test of time should invest in effective financial management and public relations tools to foster customer loyalty and register success on a long-term basis. Fortunately, companies that strike this balance will live to thrive in the competitive market, leaving indelible footprints for futuristic emulations.
Success Ajilore is a professional business analyst with over eleven years of experience, specialising in enhancing operational efficiency, policy improvement, governance, and process optimization of various companies in Nigeria.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
