Jim McIngvale was standing in the parking lot of Gallery Furniture, greeting drivers and directing cars as they trickled in one sunny afternoon.
It had been a week and a half since his local furniture store chain opened the doors to its showrooms and offered shelter to hundreds of Houstonians during Hurricane Harvey.
Everyone had since relocated to other shelters, but McIngvale and his employees remained in disaster-relief mode as a long line of men, women and children snaked across the parking lot. On this day, drinking water, cleaning supplies, toiletries, clothing and free pizza were being handed out.
“My parents taught me that the essence of living is giving,” McIngvale said. “That’s who I am, that’s what we do.”
The local businessman and philanthropist is a longtime fixture in the Houston community, and he received national media attention along with an outpouring of public support for his latest efforts.
What about the bottom line?
How businesses respond in times of disaster can either enhance or undermine their public image. But does it affect their bottom line?
McIngvale didn’t seem concerned.
“After this hurricane, we took the people in and we said, ‘to hell with profit, let’s take care of the people,’” McIngvale said. “Profit takes care of itself. If you take care of the people, the people will take care of you.”
“When businesses make public stands and they make public commitments to do good things, consumers take notice,” said Utpal Dholakia, a professor of marketing at Rice University.
According to Dholakia, doing well and doing good don’t have to be mutually exclusive. Businesses are a part of the community in which they operate, and as a result, community members can be seen as stakeholders. Businesses thrive when communities support them and vice versa.
“The company tries to do something good for the community and it actually helps them sell more and also make more money,” Dholakia said.
Employee Juan Rea has worked at Gallery Furniture for more than 30 years and has seen firsthand how McIngvale’s responses over the years have resulted in community members giving back to the business.
Hurricane Harvey evacuees slept on the store’s sofas and mattresses, and later were offered discounts of 20 percent to 40 percent off the same furniture, according to Rea.
“He helps the people and he makes money also,” Rea said.
Or taking advantage
Meanwhile, taking advantage of trying times for the sake of a buck can result in a public relations nightmare.
A local Best Buy electronics store decided to price a case of water at an exorbitant $42.96. After a customer snapped a photo and posted it on Twitter, the resulting public outrage prompted a public apology from company officials.
Why different responses?
In emergency scenarios, why do company responses vary so widely? Dholakia said that can be attributed to differences in management thinking and companies’ corporate cultures.
“Some managers have a very detailed plan of action in place about how to react when something like a hurricane or a similar natural disaster happens. So they’re able to execute their plan of action right away,” Dholakia said. “Other companies react in a slower way because they’re not prepared.”
McIngvale clearly was ready.
“Get prepared, get some sleep,” he told his employees before the hurricane. Rea worked seven consecutive days to aid evacuees, and after a day off, he was ready to keep going.
While it’s hard to quantify how a company’s bottom line benefits from good deeds, Dholakia said giving back can only help boost a brand’s standing in the eyes of its customers.
“It creates a positive knowledge association for the brand, which then feeds into the rest of the things that the customers know about the brand,” Dholakia said.
With so many advertisers vying for our dollars online and offline, good deeds become a way to rise above the noise.
“It is harder and harder to gain consumer attention in this fragmented media landscape,” Dholakia said. “Suddenly, you do something positive for the community and everyone is talking about it.”