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When it Comes to Cause Marketing, Is Profit a Dirty Word?

| Thursday January 8th, 2009 | 6 Comments

cause-marketing.gif
good_bad%20money.jpgOne of the latest buzzwords clamoring around the cybersphere is ‘Cause Marketing.’ And there is no shortage of opinions — or definitions – for the concept as marketers scramble to incorporate cause-related activities into their strategy, hoping to tap into the halo effects of a goodwill perception in response to overwhelming research indicating that this has become a key influencer in brand affinity, acceptance and buying behavior.
Inevitably, the discussion leads to the dreaded ‘P’ word, which has become somewhat taboo under the auspice of corporate social reponsibility, where cause marketing operates as a function of an overall sustainable business culture vs. a standalone revenue-driving tactic. So, the question becomes if cause marketing as a standalone product is a viable model — both culturally and profitably.
To help develop the framework for this discussion, I sought out Joe Waters, Director of Cause Marketing for Boston Medical Center and Founder of Six Figure Cause Marketing to dispel the myths and answer the critical question of whether cause marketing and profit can happily — and responsibly — co-exist.


How do you distinguish Cause Marketing with Green Marketing? Where do you think they overlap? In what scenarios would you recommend either or both?
Two different things. Cause marketing is a partnership between a nonprofit and a for-profit for mutual profit. Green marketing is the promotion of environmentally friendly products and services, or incorporating eco-friendly activities into your marketing practices. There is overlap, however. For example, Clorex and the Sierra Club have teamed up for a cause marketing partnership to launch a new line of Green Works cleaners that are made from plant-based ingredients. The Sierra Club receives a portion of the proceeds.
What do you think is the greatest misconception about Cause Marketing?
That cause marketing is not appropriate because donors often receive something in exchange for their donation. In the case of the Clorex Green Works products, consumers get a bottle of cleaner when they support the Sierra Club. But tying philanthropy to consumerism is just another way for donors to support their favorite causes. More importantly, cause marketing gives companies a powerful opportunity to support causes in a way that will generally exceed what they ever could have donated from the corporate checkbook. It’s win-win-win. It’s good for the company, the consumers and the nonprofit.
Why do you think more companies aren’t embracing Cause Marketing?
The truth is that more companies than ever are starting to embrace cause marketing. It really has become a legitimate part of the marketing mix. Of course, cause marketing is most visible at the biggest companies in America (e.g. American Express, Starbucks, Proctor & Gamble), but there has been trickle down to smaller businesses. Businesses are run by people who care about causes and who want to make a difference in their communities. Businesses of all sizes are also on the lookout for innovative marketing ideas that can help them grow their businesses. Cause marketing fits the bill on both fronts.
What companies do you think are excelling at it? Do you think there are certain verticals for which it has the greatest impact?
The best businesses for cause marketing are retail, dining and consumer products. That’s because the money in cause marketing generally comes from either point-of-sale or percentage-of-sale programs. And for either one of these programs to be successful, you need two things: lots of locations (think Subway, Target) and, ideally, lots of foot traffic (think Starbucks, Krogers). It’s no surprise that one of the most successful cause marketing programs I read about last year was the one between St. Jude Children’s Research Hospital and the casual dining chain, Chili’s. Chili’s are busy family restaurants with over 1,000 locations in the U. S., giving them the significant traffic needed to sustain such a large scale and widespread campaign.
You founded Six Figure Cause Marketing. Tell us a little more about your mission and what your services entail.
Six Figure Cause Marketing is new and will be launched early this year. Most nonprofits look at cause marketing as something only the big charities can do — the Product RED’s, the UNICEF’s, the St. Jude’s of the world. But any nonprofit with the right training and encouragement can raise six figures from cause marketing. We’ve done it at the Boston nonprofit I work at for the past five years. But this just isn’t a cause marketing program. I’m working with John Haydon at Corporatedollar.org to add a social media component to the program as well. It’s not enough for people to just learn about something. They need to learn AND apply what they learned to be successful. So John and I will be teaching folks how to enhance their cause marketing success through social media. The really great news is that cause marketing and social media are really an ideal fit. But I promised John I wouldn’t say any more than that!
Do you think it’s possible for nonprofits to earn such a significant return on the Cause Marketing efforts? Do you think that’s directly attributed to the program(s) or to the benevolent brand association it offers?
I think it’s possible for nonprofits to earn a modest amount of money from cause marketing. You’ll notice my program is Six Figure Cause Marketing, not seven figure. Most corporate fundraising, including dollars raised from cause marketing, only accounts for about 5 to 15% of a nonprofit’s revenue so cause marketing is a means to an end, not an end in itself. The ultimate goal of cause marketing should be to lead your nonprofit to more significant, less transactional, forms of support. For example, a couple of the corporate relationships we’ve established through cause marketing programs have led to some individual donor interest that might lead to a major gift. This is ultimately why we do cause marketing — not so we can sell paper pin-ups for a buck each at 12 supermarkets in and around Boston.
How do you measure the success of a Cause Marketing campaign? What do you think are the critical components to ensure a positive return?
We measure success based on how much it raises and how much exposure it gives us and our partner(s). To be successful, I think it’s critical that a cause marketing campaign be multi-faceted. Our campaigns are mostly point-of-sale, but are also integrated with special events, sponsorship, traditional media, social media and cross-promotion to name a few. If you check out my blog, Selfish Giving, and look through my October posts, you can read about Halloween Town and how sophisticated the execution of our cause marketing programs are.
Can you give us a real world example of a successful Cause Marketing effort?
The current Starbucks/RED effort is a great example of a successful program. On the one hand, you have Product RED that will benefit tremendously from the campaign as five cents from every one of Starbuck’s holiday drinks will support AIDS relief in Africa. On the other, you have Starbucks that has the [very acceptable] goal of boosting coffee sales with a new cause initiative that its customers approve of and support. So everyone wins: RED, Starbucks, coffee drinkers and people suffering from AIDS in Africa.
I’m of the belief that Cause Marketing should not just be used as a one-off campaign but be inherent to the overarching culture and business practices of a company. What are your thoughts on this? Do you see it as a tactic or a fundamental strategy?
I think what you’re saying is a nice ideal, but you have to be realistic. I think it can be both. Not every company wants to partner with you forever — at least not right away — so a short-term, transactional cause marketing campaign is acceptable and great way for partners to build a relationship. Every marriage began with a single date!
What do you think is the biggest mistake companies make who try to implement Cause Marketing initiatives?
In implementation, nonprofits make the mistake in thinking that they can back off and let the company do most of the work. The fact is that they have to be involved every step of the way for the program to be successful. They need to think of themselves as an extension of that company’s marketing team to ensure the program is executed efficiently and effectively. I always say don’t give a partner a reason not to work with you. And not sharing 100% ownership for the success of the program is a great way to wreck a partnership.
Do you think it’s a paradigm or mindset shift that you can profit [significantly] while still doing good?
I think it’s a mindset shift that happens when businesses realize that they have a tremendous asset in their customer base that they can mobilize for social good. We work with a 50-store chain of party supply stores here in New England called iParty. Up to a few years ago, their support for our nonprofit was limited to personal contributions from the chain’s two founders. But through working with them, they’ve opened up every facet of their business to supporting our mission. They regularly ask their key vendors to support us, their employees volunteer at our events, they run three pin-up programs a year for us, they are presenting sponsor of Halloween Town… and the list goes on! iParty is like a lot of companies we work with. Sure, cause marketing is good for the bottom line, but it also just makes everyone in their business feel good.
What’s the one piece of advice you would give a company seeking to implement a Cause Marketing program?
Don’t be afraid to explore and ask what you’ll get out of the partnership. It’s on everyone’s mind, but not everyone likes to bring it up because they’re dealing with a nonprofit. But I’ve found that when companies are aware and excited about the benefits to them and how they’ll be helping the nonprofit, it’s a key driver in moving the program — and the relationship — forward. The recipe for cause marketing success is simple: a pound of self-interest and a teaspoon of idealism. Measure carefully.

The change adds up.

As Joe points out with initiatives like Starbuck’s RED campaign, the increased coffee sales and earnings as a result of that program are accepted — and supported – by their patrons, removing the stigma of selfishness that many attach to cause marketing by for-profit companies. Ultimately, efforts like these pave the way to a society where doing good is the norm and social change is funded through ongoing cause-related activities. While, at present, some companies may harness cause marketing as a competitive differentiator or brand enhancing tactic, I believe it will soon become the standard way of conducting business, creating a sustainable culture of corporate and consumer consciousness with the purpose — and the profits – to make a visible difference in the world.


▼▼▼      6 Comments     ▼▼▼

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  • Jen Boynton

    Nice post Gennefer! It seems to me that one of the keys of successful, authentic cause marketing is for companies to team up with non-profits that are already aligned on the same mission. Clorox/Sierra Club works because they have teamed up on green cleaning products– the niches of both firms are enhanced by the partnership.
    The same thing goes for Yoplait and breast cancer awareness: women’s heath is a natural overlap.
    Cause marketing can have a negative impact on a company when the choice of non-profit seems random and poorly thought out. When you start to get into pink cell phones for breast cancer and red cell phones for project RED, it starts to smack of consumerism and feel like a cheap ploy to get people to buy more stuff without a true integration with the cause.

  • Peter Korchnak

    Profit in and of itself should not be considered evil or a dirty word. What matters is how it’s made and what it’s used for.
    Thanks for the great interview.

  • Gennefer Snowfield

    Excellent points, Peter and Jen.

    I think that before a company decides to engage in Cause Marketing, they need to take a step back and clearly define their mission to ensure that whatever activities they engage in are aligned with their core identity, and their overall brand position. As you pointed out, Jen, integration is the key lest it be perceived as a thinly veiled attempt to prey on consumer sensibilities around a specific cause.

    Yellingbo Gold, an Australian olive oil company with a deep commitment to the environment and aid for relief programs, is an excellent example of a well integrated effort. Their mission to reduce the harmful effects on the environment is represented in every facet of their business right down to the product itself, which is packaged using a 100% recyclable cask that greatly reduces their carbon footprint, as well as of those who purchase and use it. They also donate a percentage of their sales to a fund that they set up for orphans of the Tsunami as Jeremy is a survivor of the Boxing Day Tsunami in India.

    So, rather than tossing money at an arbitrary cause or loosely tying a random charity into their product development or sales efforts, Yellingbo embodies their charitable activities as an inherent part of their business, making the for-profit aspect of it merely a vehicle through which they can re-allocate back into their causes to create even greater change. As Peter said, what matters most is not so much the profit but how it’s made and what it’s used for.

    I look forward to continued discussions as this series continues, and will be featuring Jeremy’s story in an upcoming post as a blueprint for conscious entrepreneurs who wish to create a thriving, socially responsible company.

  • Chris

    I must admit I now think less favorably about Starbucks. Giving just 5 cents per cup sold and on only select beverages makes me question their commitment to the cause vs. interest in their own profits.

  • Nuno Andrade

    Years ago, I was told a story by a college professor about how Jesse Jackson got support from millionaires for the Rainbow Coalition. To paraphrase, he basically went to them and said if you make us, a group of black men, millionaires, we’ll make you, a group of white men, billionaires.

    Say what you will, but it was a means to an end. When people question the motives behind corporate social responsibility, my response is “So?”

    If Apple, for example, wants to “buy” support by donating to a non-profit, let them. The recipients of those donations (the hungry, the sick, etc.) are not going to care about the political motivation for the corporation’s goodwill.

    In addition, in order for any such campaign to work, it has to have some level of sincerity. People will be able to see right through any attempts to use corporate responsibility to cover up acts of corporate irresponsibility.

    The drowning man does not question the motivation of his savior, he simply grasps the helping hand. In the end, everyone, whether corporation or individual, has a reason for any acts of goodwill, whether they be financial or emotional.

    It’s fine to question motivation, but I’ll start by just being thankful that corporate social responsibility is in vogue. Let’s just work to make sure it’s not a passing fad.

  • http://www.givingadvice.com Maggie F. Keenan, Ed.D.

    While working with small businesses and solo-entrepreneurs to create their giving back program, 9 out of 10 times, cause marketing becomes one compenent of the overall program so that we leverage the partnership and benefits for both parties. It is never the ONLY type of giving suggested for small businesses, at least not in my model, as I see CRM as transactional rather than transformational. However, there are small businesses with a WIIFM approach and part of my model is to uplevel a mindset to being a true community-minded business owner does not give with the expectation of receiving in the future because that is more like bargaining quid pro quo.
    While CRM works and is effective, I think there is an awareness about what it means to be a socially conscious business owner into today’s world, being committed to a social issue, and bringing a larger game to the platform for change.

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