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In-Depth
Win-Win
Engaging customers in cause-related marketing adds to the bottom line while doing good.
By Joyce Kauf
Cause-related marketing reflects a more prosocial dimension in society to improve the common good,” says Stephen A. Greyser, professor at Harvard Business School. “The socially conscious consumer is growing. With social media, everyone is an activist,” notes Alison DaSilva, executive vice president, research and insights group at Cone Communications, a Boston-based public relations and marketing firm. According to a 2011 study by IEG, a Chicago-based sponsorship consultancy, cause-related marketing is estimated to have generated $1.73 billion dollars in 2012, compared with $816 million in 2002.
The term “cause-related marketing” is attributed to the American Express campaign in support of the Statue of Liberty Restoration project in 1983. For every card transaction, American Express donated one cent and for each new card issued, one dollar, to the preservation of the Statue of Liberty and Ellis Island. Over a four-month period, $1.75 million was raised, new users grew by 17 percent and transaction activity jumped 28 percent. According to Cause Marketing Forum, a knowledge-based organization for companies and nonprofits, American Express copyrighted the term “Cause-Related Marketing” but made no attempt to limit the term’s general use.
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“Values are the new currency,” explains Carol L. Cone, global practice chair, Edelman Business + Social Purpose, a division of Edelman, the public relations firm based in New York City. According to the Edelman goodpurpose® 2012 study, 76 percent of global customers in 2012 believed it was acceptable for brands to support good causes and make money at the same time — up 33 percent from 2008. Aligning with a cause is not only a powerful incentive to drive sales, but a well-implemented campaign can also be an effective brand-building strategy.
DaSilva stresses that cause-related marketing is not a fix, but a way to augment business. She defines cause-related marketing as “a powerful strategy companies use to bring their social and environmental concerns to consumers by integrating different dialogs about how they care and to support issues that consumers care about.” It can take many different forms, such as a tie-in with an existing product or a specifically designed product for which the company donates a percentage of sales or the entire amount to a nonprofit. Walks, marathons and sporting events are other examples. Cause-related marketing falls under the umbrella of corporate social responsibility (CSR). However, writing a check to a nonprofit or establishing a grant is not cause-related marketing, but other examples of CSR. “It is the transaction that is critical to the engagement,” says Cone, who refers to these citizen customers as the driving force behind cause-related marketing.
“Clients can feel good about wearing my designs purchased through charity events, not just because they love them but, more importantly, they helped out that particular charity and have given back to society,” explains Alberto Parada, a jewelry designer based in Washington, D.C., who works with a number of charities, including the United Cerebral Palsy Foundation and Variety Club, a children’s charity in California.
Cause-related marketing demonstrates the “power of partnership,” says Greyser, who specializes in marketing and communications. “Each brand or organization is strong in its own right, but together they put more energy into solving a problem than either could do on its own,” he explains. Greyser identified five steps essential for the successful implementation of a cause-marketing campaign:
- Recognize that it is first and foremost a cobranding activity.
- Approach it as an operational activity that fits the product, category and cause.
- Determine the resources you need, from financial through public relations.
- Ensure that both the company and the charity are integrated into one
seamless campaign. - Figure out the potential dangers. Think in advance about issues that could come up that would reflect badly on one or both partners.
Citing the American Express Statue of Liberty Restoration project as an example, Greyser points out the elements that contributed to its success: It was a patriotic play on the word “American,” a link that was “reasonably believable” and the project’s significant visibility vis-à-vis public relations kept it in the public eye.
Some partnerships evolve over time and may even have their origins in traditional partnership marketing. Breitling, the Swiss watch company known for the precision of its chronometer-certified movements, crafts watches that are used by pilots worldwide. In 1952, the company was approached by the Aircraft Owners and Pilots Association (AOPA) to make a unique aviation watch. “While it was not for charity, this set the course for an ongoing special relationship with flight teams and the military,” explains Thierry Prissert, Breitling USA president. In 2011, Breitling created a 50-piece limited edition American Tribute watch to honor U.S. veterans across the country. All proceeds from the sale of the watches — totaling $160,000 — went to Fisher House Foundation, which constructs homes to provide free, temporary housing so that families can be near veterans undergoing medical care.
Determining the nonprofit partner that shares your values is critical. “The number one step is to take an internal inventory to find out if it makes sense for your brand,” advises Megan Strand, director of communications, Cause Marketing Forum. “Ask yourself if it matches your footprint — local, national and international,” she adds. “Select a cause that resonates with your customers and your corporate mission,” says Deborah Storz, a strategic marketing consultant.
Many factors need to be considered before undertaking a cause-related marketing campaign. Some of the most important elements include:
- Pick the social issue and then do a search to find those organizations that are supporting it. “Don’t look for the obvious. Try to find an innovator,” suggests Cone.
- Consider your brand attributes. How conservative or risky is your brand?
- What is your story? Strand suggests researching your company’s roots.
- Global companies should identify more than one partner to expand their reach and opportunities.
- Consider boots on the ground, suggests DaSilva. Encourage your employees to get involved and engage them in every location where your business operates.
- Do your due diligence. DaSilva recommends consulting www.charitynavigator.com or www.guidestar.com to check the nonprofit’s ratings for governance, transparency and dollar amount it allocates to charity.
- Ensure that you are in compliance with all local and national legal requirements. For example, Eric Schneiderman, the New York State Attorney General, has released guidelines for best practices for cause-marketing campaigns.
The criteria for selecting a nonprofit may vary depending on whether it is an individual designer working directly with a charity or a larger company-based campaign. “I choose organizations that are close to my heart,” explains Alex Woo, a jewelry designer in New York. Beginning with a necklace in red, white and blue gemstones to show her pride in being an American after September 11 to her long-standing commitment to breast cancer awareness and research in honor of her mother, who died of the disease, Woo uses her creativity to support her own “personal crusades.” Among her many cause-related efforts, her Open Arrow Pendant benefits Stand Up to Cancer (SU2C) and her Tree of Life Disc supports the Christina Applegate Right Action for Women.
Jewelry designer Parada says his interest in cause-related marketing stems from his dedication to sustainability that he incorporates in all his designs. “I became more open to causes that reflected my convictions,” Parada notes. Among his numerous cause-related efforts, his seven-year association with the California Wildlife Center (CWC) began when he was approached at a trunk show for a different charity. Each year, Parada creates a piece inspired by the animal that will be saved through the organization’s efforts. “We have built a relationship over time that has been very informative for me,” Parada adds.
While the experts generally agree that there is not a clear demographic profile for the cause-consumer, psychographics and lifestyle play an important role. Still, the 2010 Cone Cause Evolution Study shows that when it comes to cause branding, “Millennials and moms matter most.”
For Milliennials — those born between 1982 and 2000 — support for social and environmental issues are part of their DNA. “The number one thing they want is a job with a purpose,” says Cone. Looking at the 18-to-24-year-olds, the Cone study found that 94 percent consider it acceptable for a company to involve a cause or issue in its marketing versus the average of 88 percent. Within this group, 86 percent cite cause-branding as a factor in deciding which products and services to recommend to other people and 85 percent responded that they would buy a product in which a portion of the sale goes to the support of a cause or issue. The Cone study notes that Millennials’ passion for supporting causes presents significant growth opportunities for companies as these young adults’ income and purchasing power grows.
But it is moms who are the epitome of the cause consumer. They are virtually unanimous in shopping with a cause in mind:
- 95 percent find cause marketing acceptable — versus 88 percent average
- 93 percent are likely to switch brands to support a cause — versus
80 percent average - 92 percent want to buy a product that supports a cause — versus 81 percent average.
“It is no longer if a company will engage in cause marketing – it is how,” says Cone. A successful cause-marketing effort requires adherence to best practices; transparency tops the list. “At the end of the day, consumers want to know what a company stands for,” says DaSilva. According to the Cone study, 90 percent of consumers want companies to tell them the ways they are supporting causes. Furthermore, if a company does not offer consumers enough information about how their purchase will affect the cause, 34 percent will either choose another brand or walk away.
DaSilva recognizes that while the cause du jour — voting for your favorite charity — may be popular, she favors a more sustained commitment, citing the fact that 61 percent of Americans in the study preferred to support a company that makes a long-term commitment to a focused issue
over time.
Share the social math with consumers. “Spell out the dollars and cents,” says Storz, who advises companies to be specific in telling consumers what their donation supports. For example, it is more effective to say that $10 will buy five meals rather than $10 will be donated to a charity that seeks to eradicate hunger.
“You need a key understanding of the media. By being media savvy, you can take advantage of the ‘multiplier effect’ and make your campaign dollars go further,” advises Storz. The 2011 Cone/Echo Global CR Opportunity Study reported that 89 percent of people surveyed want companies to use a combination of traditional and new media channels to tell them of their efforts and 93 percent want a place to access that information, such as a website. However, it is important to monitor all media channels, especially social media, which, Greyser points out, presents an inherent risk of a potentially negative message going viral.
Strand cites the importance of engaging your employees. Turn them into your advocates with consumers. Strand also suggests doing a trial campaign with employees as a test before going public.
Storz points out that the continued growth of cause marketing and consumer insistence on transparency have provided an impetus for businesses to formalize their CSR practices. She cites the creation of new business entities, such as benefit corporations (B Corps), which is a legal status conferred by the state, and certified B corporations that are certified by B Lab, a Philadelphia-based nonprofit organization dedicated to “using the power of business to solve social and environmental problems.” According to its website, B Lab aims to promote legislation that creates the benefit corporation “that meets higher standards of corporate purpose, accountability and transparency” and currently has 600 Certified B Corps in
15 countries and 60 industries.
B Lab supports legislation to create B Corps in which businesses are required to consider the impact of their decisions on the environment and the community. They must also include their social and environmental goals in their bylaws. California, Hawaii, Louisiana, Maryland, New Jersey, New York, Vermont and Virginia are among the states that have passed laws to create B Corps.
As shown in the Cone/Echo study, consumers expect business to address social and environmental issues through their operations, their products and services and their unique expertise — regardless of politics, historical context or cultural norms. Furthermore, the Cone study showed cause-related marketing’s wider effect on consumers’ decisions extending to the companies they want in their community, the places they want to work and the stocks they invest in.
Jewelry designers recognize the benefits that accrue to their individual brands. “From a broad perspective, cause-related marketing gives your business more personality. Hopefully, your fans want to learn more about you. Knowing the charities you support makes you more relatable,” says Woo.
“Cause-related marketing brings heart and humanity to life,” says DaSilva. The statistics attest to cause-related marketing’s halo effect — and its role in growing a business or brand. “The gap between what is driving purchase intent and what consumers say is most important to them is an opportunity for companies to capitalize on. Companies that stand up stand out,” concludes Cone.Article from the Rapaport Magazine - March 2013. To subscribe click here.
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