Are South African SMEs missing out on a powerful competitive edge? Discover how community impact can influence consumer choices and drive business success in today's value-driven market.
Image: File / Independent Newspapers Archives
Today, people look beyond products and services, paying closer attention to the values that guide the businesses they support.
This is a trend emerging on both a global and local front. In fact, during the Covid-19 pandemic, research found that 64% of South African consumers were influenced in their purchasing decisions by a brand's response to societal challenges, while more than half (52%) wanted to see brands actively helping communities.
With the celebration of Mandela Day and Month – a time when South Africans are encouraged to reflect on the role each of us can play in making a meaningful contribution to the communities around us – there is an increasingly compelling business case for community impact.
As small and medium enterprises (SMEs) tend to be deeply embedded within the communities they serve, they are often uniquely positioned to create a tangible and visible impact, which can be a powerful differentiator in an increasingly competitive market.
Community impact, however, should never be viewed as a marketing exercise. Consumers have become adept at distinguishing between genuine commitment and superficial initiatives designed purely for publicity.
What resonates most strongly is when businesses make a meaningful contribution because it is aligned with who they are and how they operate.
This doesn’t necessarily require large budgets or formal corporate social investment (CSI) strategies. In many cases, SMEs are already creating positive change without recognising its broader business value.
Hiring young people from the local community, supporting skills development, sourcing from local suppliers, mentoring aspiring entrepreneurs and contributing to community projects, can all have a meaningful impact.
The challenge is that many business owners do a great deal of good work quietly, while larger organisations often have dedicated teams and marketing budgets specifically designated to communicating their initiatives.
As a result, SMEs sometimes miss opportunities to build stronger relationships with stakeholders who increasingly want to support businesses that make a positive contribution.
That does not mean every act of community involvement should become a promotional campaign. However, SMEs should not be afraid to tell their stories.
Customers are often interested in understanding where their money goes and how the businesses they support contribute to local development.
Sharing authentic examples of community involvement through newsletters, social media platforms, websites and customer communications can help strengthen trust and loyalty.
The benefits extend beyond customers.
Employees, particularly younger professionals, continue to look for purpose-driven workplaces.
While salary and career development remain critical considerations, most employees want to feel that their work contributes to something more meaningful.
Businesses that demonstrate a genuine commitment to their communities can often build stronger employee engagement, improve retention and enhance their employer brand.
Investors and funders are also taking a greater interest in the broader impact businesses create.
Environmental, social and governance (ESG) considerations have become increasingly mainstream within the investment community, with recent South African research showing that most surveyed investment providers now incorporate ESG and sustainable investing considerations into their decision-making processes.
For SMEs seeking growth capital, this creates another compelling reason to think strategically about community impact.
Businesses that can demonstrate positive outcomes for the communities they serve may be better positioned to attract support from stakeholders who increasingly view social impact and financial success as complementary rather than competing objectives.
Through all of this, the key is authenticity.
Community impact cannot be manufactured overnight, nor should it be pursued solely because it is fashionable.
The most successful businesses understand that contributing to the wellbeing of their communities ultimately supports their own long-term success.
After all, thriving businesses rely on thriving communities.
Jeremy Lang, Managing Director at Business Partners Limited.
Jeremy Lang is the managing director at Business Partners Limited.
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