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Sowing with Purpose: A Unified Corporate Social Responsibility Approach Reaps Long-Term Benefits

| Wednesday January 14th, 2009 | 6 Comments

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csr_globe.jpgAs companies and marketers continue to attempt to decode Cause Marketing in determining how best to incorporate it into their efforts, a new conundrum emerges. One that centers around Corporate Social Responsibility and the overall cultural philosophy of a company. For some, it becomes a separation of Church and State issue whereby cause-related activities do not have to be aligned with internal business practices, and are engaged as marketing tactics supporting charitable entities primarily to spur sales. Others believe that the two cannot exist without each other, and that Cause Marketing activities must be tightly integrated with a CSR-driven foundation.
Management consultant and CSR practitioner, Ari√© Moyal sheds some further light on this topic, and attempts to debunk the myths around Cause Marketing and corporate consciousness with an eye on implementing a sustainable strategy that extends beyond marketing, promotions, sales — and even profit.


How do you define Cause Marketing and Corporate Social Responsibility? What do you think is the biggest difference between the two?
First, I think it’s important to differentiate between cause marketing and cause-related marketing.
Cause-related marketing is a marketing strategy which seeks to increase sales by promising to donate part of the revenue generated by the campaign to a specific cause. This usually results in large gains for the company while the cost of the donation is offset by the increased sales volume.
Cause marketing is more about the actual marketing of causes themselves, and is usually integral to a CSR model.
Corporate social responsibility is a management strategy in which a corporation takes into account its social and environmental impacts, and engages its stakeholders in order to ensure long-term sustainability. This involves proactive — and effective — resource management and risk mitigation.
If cause-related marketing is giving a man a fish then cause marketing as part of a CSR is teaching a man to fish. The latter obviously has the greatest long-term, sustainable impact.
Do you think that Cause-Related Marketing works in support of a company’s Corporate Social Responsibility platform?
I don’t think cause-related marketing works in any form. In fact, I think cause-related marketing can have adverse effects in making companies appear self-involved and disconnected from the cause they are using to drive their sales. Cause marketing, on the other hand, is an important part of the external aspect of CSR because it demonstrates real engagement of the company without making profit the main goal of the activity.
How does a CSR-driven company employ Cause Marketing? How does that differ from other companies engaging in cause-related marketing activties?
I believe that what works best for CSR-driven companies who want to raise money for causes they support is to really get involved in helping the non profits improve their operations and fundraising activities by offering time through employee-sponsored volunteering, their own expertise, as well as their contacts. This has a more beneficial impact than just writing a check, which is essentially what cause-related marketing ends up being with a disconnect from the heart of the cause.
What would you advise clients against doing as it relates to Cause Marketing?
I recommend that my clients stay away from causes that are not relevant to their stakeholders. You don’t want to alienate them or dilute the brand. Plus, it’s important that the causes are central to the company’s mission and business so that they can be active partners in change.
Can you give us an example of a socially responsible company with a tightly integrated Cause Marketing program? What are the components that make it successful?
While the Virgin Group, which runs airlines, and soon, a space tourism company, is not a perfect representative of a socially responsible company, their independent charity arm Virgin Unite is a great example of a company promoting causes by giving them a platform through which to raise funds, as well as helping them develop the tools to make what they do work best. All of Virgin Unite’s costs are underwritten by Virgin and Richard Branson.
What do you see as the main benefits of a CSR approach vs. a tactical Cause Marketing one?
Embracing CSR in totality means that you’ve taken an integrated approach in assuming your responsibilities, understand, support and respect your stakeholders, and are moving towards sustainable continuity. Cause-related marketing usually means you are focused on one thing: “Increased sales lead to increased profits” which is very short-term thinking.
What do you think is the biggest hurdle to adoption of an umbrella CSR strategy?
From my experience, the biggest hurdle is the initial time investment required to explore, define and implement the strategy. Most businesses don’t believe they have the time to look into it, much less make it happen. I try to identify some quick wins for my client right off the bat to make it an achievable option.
You are a management consultant focused mainly on a CSR model for business. What services do you offer? What types of companies typically engage your services?
I offer a holistic approach to business that starts with brand values, then aligns day to day processes and procedures with those values to ensure that the company is financially, socially and environmentally sustainable. CSR isn’t just about the environment or charitable causes. You need to remember your employees, direct and indirect, as well as the communities in which you operate. In fact, they’re probably the most important components of a well executed CSR plan.
My services range from high level assessment through to project management and implementation. I have worked with large financial services providers, NGOs and small to medium businesses in this capacity, tailoring the strategy to their individual operations and objectives.
What is your sustainable business philosophy?
I believe that in order for a business to be considered sustainable it must be active in reducing its environmental impact, engaging the people it affects on a daily basis in an ethical manner and remain an innovator with an eye on the future.
Are you seeing a greater consumer demand for doing business with socially responsible companies?
Yes. With all the activity surrounding climate change and ethical business practices, and due to the increased awareness of these important issues through information exchange and social media sharing, more and more consumers are looking for authentic socially responsible solutions. Consumers also want to feel as though they are doing their part by supporting companies committed to affecting positive change.
How does CSR impact internal and external business practices?
Being a holistic approach, it has many effects. Internally, CSR affects how information is transmitted (transparency), governance, staff engagement policies, travel and transport policies and facilities management, and to an extent, budget planning. Externally, it affects the choices of suppliers and subcontractors, marketing practices and community involvement. That’s just to name a few. But it doesn’t have to be complicated if it’s done right and well integrated — and supported — cross-functionally and operationally.
How do you measure the success of a successful CSR implementation? Do you find that it strengthens a company’s brand presence overall, and hence positively enhances each of their initiatives?
There are many ways to measure a successful implementation but no one indicator will give you the full picture. You can measure it by the reduction of carbon emissions, energy use and water use, as well as in time and cost savings. You can measure it by staff retention and satisfaction. You can even measure it through positive customer and media feedback. Each of these variables highlight different improvements toward quantifying the results of a company’s CSR activities. I do also strongly believe that a genuine undertaking towards social responsibility strengthens brand image and affinity, which is typically one of the most visible results.
Can you name some high profile socially responsible companies?
ANZ Banking Group under John McFarlane was a great example of a company dedicated to social responsibility, which I had the benefit of experiencing firsthand. BT is another good example. I suppose it’s easier for service providers because they have a lot less to manage logistically and operationally. But it’s not just about the big players. A lot of SMEs are working towards sustainability as well. When I lived in Melbourne, there were a few programs to help them do so. One was called Grow Me The Money , run by the Chamber of Commerce and industry with support from the EPA. Another, VIC 1000, a three-year pilot Sustainable Business Management Programme is handled through Village Green , an environmental consultancy.
Where does profit come in? Is there a standard revenue plan for a CSR company? (i.e. feeding a percentage back into social change initiatives et al)
Profit works the same as for any company. The ‘P word’ is not a dirty word and it is necessary for business continuity. Otherwise, there would be no point. CSR is there to help ensure continuity, and risk mitigation too. It’s not just a feel-good gesture. As for how much profit should go to support the causes, it depends on the company, how much else they are giving and what sort of funds or other materials they have collected. As I’ve said, money alone only goes so far. A company who really wants to help make a real difference donates time, expertise, contacts and support.
Do you think a company needs to start out with a socially responsible foundation, or is it possible to adopt a conscious approach later? How do you think that affects the brand?
I think that if you build a company on a CSR model you will have a responsive, innovative company that is set up for long-term success and sustainability. Since technology and business, as with most things, are constantly evolving, there will always be room for improvement but I think the foundation should be there from the start. It doesn’t mean you have to be perfect. It means that you have to at least make the commitment in all facets of your business, and keep working on it. That said, any time a company wants to make a move toward socially responsible practices, it is beneficial so modifying your approach later is possible as well — even if not ideal.
What advice do you have for businesses who want to put greater emphasis on CSR, or for those who want to put a more structured focus in place?
Start small. Find quick wins. Pool your resources. Tap your staff for ideas. Create an environment where they can share their knowledge and get involved, and you’re halfway there. Oh yeah, and hire me!

Striking a balance…

I believe that any time a company chooses to support a cause or engage in charitable activities — even if the impetus is, at times, profit-based — is a step in the right direction. The cause ultimately benefits, and increased sales lead to additional philanthropic programs. After all, money generated from a sales-driven campaign isn’t any less useful to the organization. But as Ari√© pointed out, most causes benefit even greater from a time investment and ongoing non-monetary support to keep their operations running smoothly. So, integrating your efforts under a unified CSR strategy is the optimal scenario, and one in which your company, employees, stakeholders, customers, causes, brand and planet all thrive. And that’s the bottom line.
If you want to reach Arié directly, you may email him at arie.moyal@blcubed.com.


▼▼▼      6 Comments     ▼▼▼

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  • http://kynamdoan.com/ KyNam Doan

    “I don’t think cause-related marketing works in any form. In fact, I think cause-related marketing can have adverse effects in making companies appear self-involved and disconnected from the cause they are using to drive their sales.”
    These are such broad strokes. Yes, there are instances where CRM fails. On the other hand, there are many instances of success. The Cone/Duke study scientifically proves this. Authenticity is the hurdle brands must clear, and many have done so.
    “This has a more beneficial impact than just writing a check, which is essentially what cause-related marketing ends up being with a disconnect from the heart of the cause.”
    For the Trees for Troops campaign FedEx donates their shipping infrastructure and local treegrowers donate trees. It’s not necessarily cutting a check. But in the case of a check, money is still very important to the health and prosperity of nonprofits.
    “I recommend that my clients stay away from causes that are not relevant to their stakeholders. You don’t want to alienate them or dilute the brand.”
    The stakeholders are not the customers. The stakeholders will be alienated if you’re not taking care of them. If CRM delivers ROI, I assure you the stakeholders will sing. Alienating customers is the point of focus. This brings us back to having an authentic relationship with nonprofits.
    “Start small. Find quick wins.”
    It contradicts what you said originally about applying a holistic approach and the biggest hurdle being “the initial time investment required to explore, define and implement the strategy.”
    You’ve made some good points, but we really must discuss these further. =)

  • http://arie.gaia.com Ari√© Moyal

    Hi! Thank you for commenting!
    The study you mention shows that CRM doesn’t work in all verticals and while it might drive sales it doesn’t address branding or the effect CRM has on brand affinity.
    I made it pretty clear that CRM drives sales but what does it do beyond that?
    “As for the Trees for Troops campaign FedEx donates their shipping infrastructure and local treegrowers donate trees.”
    To me this campaign doesn’t qualify as a CRM campaign and is actually a good example of a CSR campaign. There is no direct financial gain for FedEx that I can see.
    I agree that money is very important but it’s not the be all and end all. The NGOs I’ve spoken to agree that complementary assistance is invaluable and that a cheque only goes so far.
    “I recommend that my clients stay away from causes that are not relevant to their stakeholders. You don’t want to alienate them or dilute the brand.”
    What I mean by stakeholders is all of the company’s publics from employees to shareholders to customers to people who live in the communities they operate in. CSR is also about risk mitigation. Engaging your employees and communities and improving communications reduces your operational and HR risk.
    “Start small. Find quick wins” was a lead up to you’re halfway there. It’s a stepping stone to a larger CSR plan. And the company’s perception of the time involved is the hurdle more than the actual time itself.
    I hope this answers your concerns and I look forward to continuing this discussion with you!

  • http://www.blogs.zdnet.com/sustainability James Farrar

    Thought provoking article. I agree w the earlier comments – these are broad strokes. Tokenistic CRM may backfire but so too may CM. For example the public service announcements for safe drinking have been criticised — good voluntary action, good potrayal but little details about exactly how much to drink are left out. So if a firm takes that integrated approach to CM, relating to stakeholders and core business – it may find itself with conflicted interests. Not saying not to do here — just to illustrate that CM & CRM can sometimes work and sometimes not. You mention Virgin Unite — do they have a conflict of interest here with this initiative: http://www.virginunite.com/campaign2/Green-Spot/?nid=e3cebc02-558b-4264-a645-24dc8ca8d890 . Don’t get me wrong – good effort — but I would prefer to see these issues addressed in the core business, reducing the harmful impact of aviation, not reading about KT Tunstall’s Eco Make Over.
    Now to CRM – I’m not sure I follow what the problem is exactly. If a brand can be stretched to drive revenue, awareness and empowerment as well as customer value & intimacy for social interests then why not? Actually, given the choice I suspect many NGOs would prefer to have the cash than an army of well being but unprepared corporate volunteers descend upon them. But why not both?
    But why not an integrated approach to CM/CRM? There are good examples of where this has been executed well without any of the major conflicts of interest. Body Shop comes to mind, Ben & Jerry’s.
    Where do you see the Fair Trade Movement in all of this? Is it illegitimate? After all — customers are asked to pay a premium above prevailing market so to raise money for ……..
    Anyway, like the article and the debate which I’m trying to stimulate with you . Hope I’m not too contrarian.

  • Gennefer Snowfield

    I’m happy to see that this post has sparked some good — and much-needed — discussion around the differences between CRM and CSR, and how best to integrate the two concepts to achieve maximum impact for both company and cause.

    I believe that cause-related initiatives are — and can be — extremely valuable when a) aligned with a company mission, b) support a natural product tie-in or c) have a personal connection.

    sweetriot (http://www.sweetriot.com) is a great example of a. as it is a company founded on the premise of fostering a multicultural world, and all of their efforts are driven to that end. So, it’s a deeply rooted mission that manifests in a multitude of related causes.

    To illustrate b., Coastal Contacts (http://www.coastalcontacts.com/) in Canada is exploring a cause-related effort with Guide dogs which is an excellent tie-in to their product that makes sense vs. tossing money at an arbitrary ‘buzz’ charity merely for purposes of sales. In a savvy market, efforts like that always come off as thinly veiled attempts to prey on consumer sensibilities around a cause.

    C. is best demonstrated by Yellingbo Gold (http://www.yellingbo.com), an olive oil company from Australia, that donates large portions of its profits to causes that are close to Founder, Jeremy Meltzer’s, heart. Jeremy’s personal experience with the tsunami prompted him to set up The Jasmine Foundation for orphans of the tsunami, and he serves as Ambassador for UNIFEM (United Nations Development Fund for Women), both of which benefit from the sale of Yellingbo Gold.

    All three scenarios highlight cause-related marketing efforts that work well — even though they are not necessarily part of a broader CSR position.

    @JamesFarrar Regarding your mention of The Body Shop and Ben & Jerry’s, I would argue that those are both prime examples of companies that ARE built on a socially responsible platform, and launched with a deep commitment to giving back to society already in place. I view them as more of a classic CSR approach than a tactical cause-related execution, which is why it works so well in the mainstream.

    A company like Starbucks, on the other hand, which was built on a more consumer capitalist model, has some hurdles before the market will adopt them as an altruistic beacon of change — especially when they only donate a whopping .05 cents per cup as part of their Project RED program.

    At the end of the day, however, any vehicle through which money is generated to benefit a cause vs. merely lining corporate pockets, is a good one, and sets the stage for an ongoing mindset shift toward corporate consciousness on a widespread scale. Until then, I believe that both can co-exist, and create a lot of positive change in the process.

    Thanks to everyone for your perspectives, and I welcome any further insights in keeping this important discussion going.

  • Leo

    nice & clear expression

  • Leo

    nice & clear expression