Cause Marketing: Building Profitable Relationships with Corporate Partners

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Overview, history and key factors to success in cause marketing relationships

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Cause Marketing: Building Profitable Relationships with Corporate Partners

  1. 1. Center for Nonprofit Success Boston Fundraising Summit September 29 th , 2009 Cause Marketing: Building Profitable Relationships with Corporate Partners Sondra Lintelmann-Dellaripa Philanthropy Performance Management, Inc [email_address]
  2. 2. Cause Marketing <ul><li>Cause marketing spending is projected to reach $1.57 billion this year, according to the IEG Sponsorship Report.  </li></ul><ul><li>According to Performance Research, 41% of U.S. consumers believe companies can best improve brand perceptions by increasing their cause relationships. </li></ul><ul><li>While philanthropy may be down, consumers often see a cause campaign as a way to break a tie on a choice and enable them to personally contribute at low to no additional cost. </li></ul>
  3. 3. Definition <ul><li>From Businessdictionary.com </li></ul><ul><li>cause related marketing  </li></ul><ul><ul><li>Definition </li></ul></ul><ul><ul><ul><li>Joint   funding  and  promotional strategy  in which a firm's sales  are linked (and a  percentage  of the  sales revenue  is donated) to a charity or other  public  cause. However, unlike  philanthropy , money spent in cause related marketing  is considered an  expense  and is expected to show a  return . </li></ul></ul></ul><ul><li>Key wording: Unlike philanthropy, CRM is considered by the for profit company to be an expense with an expected return. NPO must understand, respect and work to this fact. </li></ul>
  4. 4. Definition <ul><li>From the Cause Marketing Forum: </li></ul><ul><li>Cause marketing (also known as cause-related marketing) is an umbrella term that covers a rich range of marketing activity. Central to its definition is the idea of a marketing partnership between a business and nonprofit entity for mutual benefit </li></ul><ul><ul><li>Too often organizations ask corporations for funds without providing a real partnership. And too often brands ask causes for their logos without providing real programs.  </li></ul></ul><ul><li>Although traditionally aimed to the consumer public, cause-related marketing isn't always about the consumer audience. </li></ul><ul><li>From www.causerelatedmarketing.blogspot.com: </li></ul><ul><li>“ Just as there are businesses that sell goods and services to other </li></ul><ul><li>businesses (B2B), it is possible... though not always easy... to put together </li></ul><ul><li>cause marketing campaigns where the cause transaction occurs between </li></ul><ul><li>businesses.” </li></ul>
  5. 5. Terminology <ul><li>Cause marketing is not: </li></ul><ul><ul><li>“ Social Marketing,” the use by nonprofit and public organizations of marketing </li></ul></ul><ul><ul><li>techniques to impact societal behavior (e.g. stop smoking, don’t pollute, don’t </li></ul></ul><ul><ul><li>use drugs, don’t drive drunk.) </li></ul></ul><ul><li>Nor is it: </li></ul><ul><ul><li>“ Corporate Philanthropy,” the giving (without expectation of direct corporate gain) </li></ul></ul><ul><ul><li>of charitable financial and in-kind grants by companies or their corporate </li></ul></ul><ul><ul><li>foundations. </li></ul></ul><ul><li>Cause Related Marketing , also differs from these very specialized arrangements between corporations and non profits. </li></ul><ul><ul><ul><li>Advocacy, Certification, Co-Branding, Corporate Volunteerism, Fundraising Partnership, Promotional Partnership, Sponsorship, Strategic Philanthropy </li></ul></ul></ul><ul><li>Its important that we understand these differences in approaching and securing our projects. More corporations are hiring staff experienced and educated in Nonprofit partnerships. These staff will certainly be versed and familiar with these different scenarios. </li></ul><ul><li>Finally cause marketing projects are not events: walks, bikes, runs etc. </li></ul>
  6. 6. History <ul><li>One of the first examples of a &quot;cause-related marketing&quot; campaign was initiated in 1979 by Rosica, Mulhern & Associates for  Famous Amos  cookies. </li></ul><ul><ul><li>Literacy Volunteers of America </li></ul></ul><ul><ul><li>This case study is now used in university classrooms </li></ul></ul><ul><ul><li>nationwide as an example of successful &quot;cause-related </li></ul></ul><ul><ul><li>marketing&quot;. </li></ul></ul><ul><li>The creation of the term &quot;cause-related marketing&quot; </li></ul><ul><li>is attributed to  American Express , and it was coined to describe efforts to support locally based charitable causes in a way that also promoted business. </li></ul><ul><ul><li>  Statue of Liberty  Restoration project </li></ul></ul><ul><ul><li>Over a four-month period, $2 million was raised for </li></ul></ul><ul><ul><li>Lady Liberty, transaction activity jumped 28 </li></ul></ul><ul><ul><li>percent and the concept that doing good was </li></ul></ul><ul><ul><li>good for business, was born. </li></ul></ul>
  7. 7. Benefits to Corporation <ul><li>Corporate benefits </li></ul><ul><ul><li>Cause-related marketing can directly enhance sponsor sales and brand. </li></ul></ul><ul><ul><li>Cause-related marketing is respected and accepted business practice. </li></ul></ul><ul><ul><li>Cause-rleated marketing can heighten customer loyalty. </li></ul></ul><ul><ul><li>Cause-related marketing can boost a company's public image and helps distinguish it from the competition. I would add that it can also give corporate PR officers a new story to tell. </li></ul></ul><ul><ul><li>Cause-related marketing can help build employee morale and loyalty. </li></ul></ul><ul><ul><li>Cause-related marketing can improve employee productivity, skills and teamwork. </li></ul></ul>
  8. 8. Benefits to the Nonprofit <ul><li>Nonprofit benefits </li></ul><ul><ul><li>Access to a wider market </li></ul></ul><ul><ul><li>Promote mission based messaging </li></ul></ul><ul><ul><li>Motivating people to change their behavior </li></ul></ul><ul><ul><li>Direct revenue </li></ul></ul><ul><ul><li>Volunteers </li></ul></ul><ul><ul><li>Extension of existing fundraising program: employee giving, individual giving, corporate gifts </li></ul></ul>
  9. 9. Obstacles <ul><ul><li>Language Barriers </li></ul></ul><ul><ul><li>Historical mindset </li></ul></ul><ul><ul><li>Compensation systems and insufficient accountability </li></ul></ul><ul><ul><li>Communications (or lack thereof) </li></ul></ul><ul><ul><li>Poor management/oversight structure (both entities have to have identified assigned project managers) </li></ul></ul><ul><ul><li>Poor capital investment (resources set aside and defined by entity) </li></ul></ul>
  10. 10. Questions to ask yourself <ul><li>Questions for the NPO before they seek partner: </li></ul><ul><ul><li>Does my cause have the breadth of appeal that can attract a franchise?  </li></ul></ul><ul><ul><li>Is there a 'fit'? </li></ul></ul><ul><ul><li>Are the target franchise systems close enough to consumers to be able to ask for money/support? </li></ul></ul><ul><ul><li>Can I get the support of powerful individual franchisees? </li></ul></ul><ul><ul><li>Can I physically support the efforts of franchises that may be spread out all over the country? </li></ul></ul><ul><ul><li>Can I put into place a mechanism for collecting money?  </li></ul></ul><ul><ul><li>Do I have the wherewithal to promote the relationship in the media? </li></ul></ul><ul><ul><li>How will I recognize and reward the achievements of individual franchisees? </li></ul></ul><ul><ul><li>If there are materials to distribute, does the franchisor have an effective way to deliver them? </li></ul></ul><ul><ul><li>When selling your charity to the franchise system, does the franchisor have an efficient way for me to get in front of the individual franchisees? </li></ul></ul>
  11. 11. Keys to Success <ul><ul><li>Suitability/Relevance: Will it make sense and seem logical to the consumer </li></ul></ul><ul><ul><li>Authenticity (walk the walk, or just talk the talk) </li></ul></ul><ul><ul><ul><li>Avon’s  choice to promote female health and combat breast cancer was an obvious one.  In choosing a cause that directly affects their target demographic, Avon was able to motivate and mobilize their consumers to buy products associated with an issue close to their hearts. Until Avon products where determined to cause cancer. Oops. But they rallied, rectified and resolved the product issues. Now they have expanded and enhanced their cause partnership: Avon has not only created a line of Pink Ribbon branded products, but has also hosted events, opened a registry tribute, and even established a Breast Cancer Center at a leading hospital.  In placing their message in a variety of places, Avon has increased the visibility of their cause and brand, further establishing credibility and motivating future purchases.  </li></ul></ul></ul><ul><ul><li>Transparency: </li></ul></ul><ul><ul><ul><li>What amount, where and how, when, measurements </li></ul></ul></ul>

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