You hear the term ‘cause-related marketing’ disused a great deal today, especially in business circles. It refers to the cooperative marketing efforts of a “for-profit” business with nonprofit organizations. The goal of cause-related marketing for the business is to associate its brand with the nonprofit’s brand, thereby demonstrating to the consumer, in a tangible way, that the company has a heart and cares about the community. The nonprofit benefits because it gets to leverage the company’s business resources—its infrastructure, brand awareness, marketing collateral, reputation, customer base and general expertise.
On the surface it looks altruistic; the business steps in, out of the goodness of their heart, to support a local charity. The business gives, the charity receives; the business loses money, the charity gains donations. But good cause marketing is never as asymmetrical as it seems to the consumer. When done well, both organizations benefit. And if done really well, the business can benefit more than the charity.
So what exactly is cause-related marketing, and should your business consider partnering with a local cause?
American Express coined the term “cause-related marketing” in 1983, when it launched the Statue of Liberty Restoration project. The company donated a penny toward restoring the Statue of Liberty each time a cardholder used his or her American Express card. In a mere four months, more than $2 million was raised for the project. That’s 200 million transactions!
According to the Cone Cause Evolution survey, 87 percent of consumers say they would switch brands if the product was associated with a good cause. Cause-related marketing is the mechanism that lets the consuming public know that your company shares the same social goals.
Recently the Cause Marketing Forum released a study that said 72 percent of American consumers avoided purchasing products from companies with disagreeable practices. In other words, consumers want to use their purchasing power to shape social issues.
Accordingly, two-thirds of brands engaged in cause marketing in 2011, up from 58 percent in 2010, according to a study by PRWeek and Barkely PR. Consumers are also making a shift in their purchasing habits, with 86 percent of consumer buyers believing that businesses need to place at least equal weight on societal interests as they place on their direct business interests, according to an Edelman survey.
It’s no longer enough for me to build a business, earn profits and create jobs; my customers want me to donate time and money to the community. They demand that we do good works and improve the quality of life here in Gainesville. Is this a good thing for business? No. It’s a great thing.
So how do you get started in cause-related marketing? What are the best practices? How do you run a successful campaign, one that reflects well on your brand and also does some serious good?
Make a list of the top five charities or causes important to you, your family and your employees. Make sure your employees are on board. Remember, the more passion you have for a cause, the more success you will have with your campaign.
Research your candidates and only support organizations that have a record good leadership; a history of being good stewards. One thing I look for is financial transparency. Another is chatting with members of the board of directors. Accounting should be an open book. If they hesitate to show you their books, hesitate to help. Another thing I look for is the percentage of donations that go to the cause, not to their overhead. I avoid charities that use more than 15 percent of its donations to run operations, and I obviously avoid charities that pay large salaries to its executive directors. The internet is a great way to research not-for-profit organizations. Charitynavigator.org and givewell.org are good resources.
Involve Your Employees. This is key. If your business is embarking on a cause-related marketing campaign, then your entire team needs to be on board. Involve your employees from the beginning. Get feedback. You will be surprised how many good ideas come from employees who are more passionate about a cause than their job.
Before you make the first call, get legal and financial advice from your CPA. IRS guidelines regarding donating can be tricky. Understand the tax advantages and limitations of cause-related giving can make the difference between trading dollars and losing money. As with any other good plan, success is in the details.
Do a giving inventory and determine what your organization has to offer. Is it marketing, labor, customer lists or simply free product and services? One of my favorite cause-related campaigns was in 2010 when I worked with UF’s homecoming and Gator Growl. Dominos Pizza advertised the event on our pizza box tops, and then let the folks pick up their tickets at any of our eight local Dominos Pizza locations. This not only drove ticket sales for Gator Growl (they had one of the biggest crowds ever), but it made picking up tickets easy and convenient. As a bonus, my Dominos stores became associated with Gator Growl in the consumers’ mind, and Gator Growl filled up 40,000 seats. Talk about win-win!
Who to contact: You’ve done your inventory. Your team is on board. Now it’s time to contact your prospective new partner. Since most large organizations have full-time development directors, this will be easy. It is in their job description to develop cause-related marketing initiatives with local companies. Trust me, they will welcome your call.
When evaluating the relationship, remember that there must be a mutually beneficial collaboration between your company and potential partner. The resources you donate must create social value, increases visibility and generate revenue for both companies. Your nonprofit partner and your brand must demonstrate synergy and an organic integration between your message and their message. This connectedness must be apparent and make sense to your customer.
Define your relationship: Talk in specifics with your charity partner and make sure expectations are REM: Realistic, Executable and Measureable. Focus on what criteria makes for quantitative success. Remember, they are looking for a solid ROI just as you are, so be prepared to give them information on the effectiveness of your marketing materials, your brand reach, your target audience and level of visibility. Discuss openly how you will use the organization’s name and logo in your marketing campaigns, and how it, in turn, will use your company name and logo in its press releases, commercials, marketing materials and websites.
Execute your campaign. Something to keep in mind: A small percentage of consumers are easily turned off by some marketing relationships, especially when the commercial component comes on strong.
When working with any charitable organization, you must be vigilant in protecting each other’s brands. Always be aware that cause-related marketing can be susceptible to a “business-first” mentality. Anyone undertaking a campaign will be fighting the cynical notion that brands exploit nonprofits to make money. When done properly, these partnerships aren’t just about bottom lines, but about making a real difference and putting brand power behind important issues.
A final word about cause marketing: Give from the heart and don’t demand an ROI. Cause marketing works best when you and your employees feel great about the help you’re providing to your nonprofit partner.
Many cause-related marketing proponents see a day when all consumption will be driven by social issues. I don’t necessarily subscribe to that theory. But I do believe business issues and social issues will continue to overlap as we move forward in the new “connected” economy. Cause-related marketing relationships will become ubiquitous in our economy, and I believe it’s good for everybody, especially for those of us trying to change the world.
Freddie Wehbe is the local owner of Gator Dominos; a nine-store franchise serving the greater Gainesville area. Freddie is married to Daurine and has two children, Ronnie and Dany. To learn more, contact Freddie at [email protected].