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Cause Marketing


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Cause Marketing

  1. 1. Cause and Effect: An Overview of Cause-Related Marketing If you’re a professional marketer, you may or may not have already heard of cause-related marketing (CRM). But as an American consumer, you’ve almost certainly been exposed to a CRM program … possibly even within hours of reading these very words. For example, if you stopped at Starbucks for a coffee this morning, you had the opportunity to help bring clean water to children around the world by buying a bottle of water. If you just grabbed lunch at McDonald’s, you could have made a donation to the Ronald McDonald House—or a variety of other causes. Even if you just got home after picking up some groceries, say at Whole Foods Market, your entire shopping experience was influenced by cause awareness. Cause-related marketing seems like it’s everywhere, and for good reason. Research shows that people are responding to it in an increasingly positive way. Some marketing experts even think it generates a better ROI than traditional advertising.1 Even in the bruising business environment of 2008, the biggest marketers continue to believe that CRM is crucial to marketing success. Which is not to say that CRM is only for the corporate giants. Plenty of small and medium sized businesses—and even local businesses— have made splashes with smart CRM programs. A Definition of Terms So what exactly is CRM? One widely accepted definition is: the public association of a for- profit company with a nonprofit organization, intended to promote the company’s product or service and to raise money for the nonprofit. Because CRM is not tax-deductible, it is different from straightforward corporate philanthropy or charitable gifts.2 The term CRM is usually considered to have been coined by American Express. In 1983, they launched a campaign to raise money for the Statue of Liberty Restoration project. Every time a cardholder made a purchase, money was donated to the fund. The result was a success on all fronts: the Statue received more than $1.7 million in funding, and American Express grew membership as well as usage among existing members.3
  2. 2. Since then, CRM practices have evolved, expanded and, of course, dramatically increased. Today, a CRM program can include everything from a simple cash donation solicited at the point of purchase to integrated, multi-channel advertising campaigns that span multiple companies. There are even entire brands that are specifically created just for a specific cause, such as the (RED) Campaign to support the Global Fund for HIV/AIDS prevention. On an executional level, CRM programs generally fall into six distinct categories. In a widely cited article, Dr. Inger Stole defined these as: • Purchase-triggered donations, which is the most common form of CRM, and generally involves a company donating a certain portion of a sale, many times at the point of purchase. • Traditional advertising programs, which generally involve an advertiser incorporating cause-related messaging into their campaigns, sometimes in order to build store traffic. • Sponsorship of specific events or programs, which could involve title- sponsorship or even creating proprietary events, such as the Nike+Human Race. • The licensing of a logo or marketing message by a cause to a supporting sponsor. A few well-known examples include the Lance Armstrong Foundation and the American Cancer Society. • Facilitated giving, which basically asks consumers to help other consumers pay for a company’s own product or service. For example, utility companies who solicit contributions to families who need help paying heating bills. • CRM programs that are built around PR efforts.4 And of course, the rise of the Internet means that more and more CRM programs will be conducted online. EBay even runs a Giving Works program that allows sellers to donate a portion of their profits directly to a charity of their choice.5 Save the World—One Sale at a Time. Clearly, many of the largest, most respected brands in the world have decided that CRM is not only a great way to help make the world a better place—it’s a smart marketing strategy. The total amount of money spent on CRM has risen every year since 2003, and was above $7.8 billion in 2006.
  3. 3. So what’s driving this trend? In short, consumers. Research has shown that people are increasingly concerned about the values a company holds, and express that preference with their pocketbooks. Corporations are catching on, and are finding innovative ways to respond. In fact, Google even took the step of establishing the principle of “doing no evil” directly into its founding corporate philosophy.6 According to one recent survey, Americans have an overwhelmingly positive view of CRM: • 8 out of 10 say that corporate support of causes wins their trust in that company. • 72 percent say that it is acceptable for a company to be involved in cause-related marketing. • 86 percent say they are likely to switch between similar brands if one is associated with a cause. • 75 percent say that a company’s commitment to social issues is an important factor in deciding whether to recommend their product or service. On the flip side of this scenario, Americans clearly show an inclination to punish companies they perceive as exhibiting poor behavior. For example, when Americans have a negative perception of a company’s values: • 90 percent consider switching to another company’s products or services. • 81 percent will speak out against that company to family and friends. And it’s not only consumer relations that drive this trend. Investors are increasingly seeking to shift their money to companies they perceive as socially responsible; shareholders say they are more likely to sell shares in companies that are not socially responsible; and employees say they are less likely to work for or feel loyal to socially irresponsible companies.7 A Case In Point ... Entire books could be—and have been—written about successful CRM case studies. Let’s just take a quick look at a few of the better-known examples: • The St. Jude Children’s Research Hospital Thanks and Giving campaign invites consumers to make charitable donations at various points of purchase. Their
  4. 4. marketing partners read like a who’s who of retailers, including 7-Eleven, Kmart and Target—just to name a few. Consumers can even donate at banks like JPMorgan Chase. Advertising messaging specifically asks consumers to contribute to the St. Jude mission by supporting their sponsors, and the St. Jude website includes links to their partner corporations. • Campbell’s runs a Labels for Education program that rewards free school equipment to schools that collects soup labels. This long-running program not only resulted in a direct sales increase, it helps Campbell’s nurture positive brand association with future consumers. This program has been lauded as an especially good example of smart, return-on-investment marketing.1 • Estée Lauder created an annual Breast Cancer Awareness Campaign which donates portions of sales of pink-branded products. The campaign has garnered widespread public and media attention and gained the favor of prominent celebrities. It’s also helped the company tap into growing awareness of the National Breast Cancer Awareness Month, while raising more than $35 million dollars to benefit breast cancer research. As these three examples show, supporting the right cause can really help a company get consumers’ attention—and generate invaluable goodwill. How You Can Benefit From CRM … With new technology driving increased media fragmentation and ever-increasing competition putting consumers in control like never before, creating an effective marketing program gets tougher every year. That’s what makes CRM such an appealing idea. When done properly, CRM not only helps your message stand out from the “clutter,” it can also simultaneously build your brand—and directly increase sales. It can reach audiences that your traditional advertising may be missing. And, it can help you create a sharp sense of differentiation from your competitors, while it works to increase existing customer loyalty.
  5. 5. CRM gives your company a unique “story” to tell, which can work to complement your existing messaging strategies and help bolster your PR strategy. In addition, it creates a proprietary, lasting message that can be leveraged for years, and in some cases, decades. Another thing to consider ... for some marketers CRM may have essentially become mandatory. In other words, if your competition is currently involved in high-profile or successful CRM programs, you may not only be at risk of losing potential customers ... you may be at risk of becoming defined by your lack of participation. The good news is that the same research that shows Americans’ positive view of CRM also illustrates a tolerance for corporations who promote their involvement. Over 85 percent of Americans want companies to spend more time talking about their CRM efforts—and the majority feel that companies aren’t currently talking about it enough.7 So is embarking upon a CRM program a smart marketing decision? The evidence seems to say yes. Good news for marketers ... and even better news for all the deserving causes out there that would love to have your help! Endnotes 1 Neff, Jack, “Yes, There Is An ROI For Doing Good,” Ad Age, May 26, 2008. 2 The Foundation Center, 3 “Buy This Sweater, Save A Seal,” The New York Times, December 22, 2007. 4 Stole, Inger, “Cause Related Marketing: Why Social Change And Corporate Profits Don’t Mix,” July 14, 2006, The Center for Media and Democracy. 5 6 7 2004 Cone Corporate Citizenship Study, December 8, 2004.