This post is part of a blogging series by marketing students at the Presidio Graduate School’s MBA program. You can follow along here.
By Krystal Kavney
Cause marketing is on the rise from business and nonprofit partnerships to social media fund raising. The success of media darlings TOMS shoes and its nonprofit partner, Friends of TOMS, was due to the direct connection of the sale of a product to the cause it supported. The TOMS business model was created in such a way that neither organization would have likely seen the huge scale of consumer and financial support without the partnership of the other, landing the company on the number 6 spot on the Fast Company 2010 Top Ten Most Innovative Retail Companies. Although businesses do not often exist just to further a cause, there are many opportunities for these types of partnerships to lead to financial gains for business and nonprofit organizations.
With cause marketing becoming more mainstream for businesses, the trend has increased customer interest and behavior. In fact, 83 percent of the consumers surveyed in the 2010 Cone Cause Evolution Survey said they want more of the products, services, and retailers they use to benefit causes. 41 percent of these people made purchases in the last year because of an association with a cause and this number has doubled since 1993. 80 percent of Americans are shown to switch brands that are closely related in price and quality to one that supports a cause. Consumers are now expecting a wide range of business industries to support social and environmental causes and not just those that are in the ‘sustainability space’.
The value proposition for businesses to form alliances with non-profits is strong: increase in customer satisfaction by linking the sale to a cause, positive impact on an organization supporting a particular cause, differentiation from the competition, and, of course, promotion of their business as being socially responsible. This last benefit needs to be handled with grace and care as it is a balance between being perceived as giving and just using a cause to shamelessly promote the business. For instance, Microsoft and its search engine Bing were recently criticized for their strategy to raise $100,000 for Japan disaster relief efforts on Twitter by asking people to retweet their message for $1. Bing claims to have wanted to give the world an easy way to give to Japan but it was seen by many to be a poorly executed marketing opportunity.
Cause marketing has a greater chance of success when the business and the nonprofit share a connection, inspiration, or passion. A creative partnership like the one between Macallan Scotch and Charity: Water, who both prioritize clean water, raised more than $600,000 by auctioning off an extremely rare bottle of whiskey after a world-wide tour. Sustainable and socially minded initiatives are an increasing a part of our personal and consumer culture. These characteristics are being leveraged in many marketing strategies but businesses looking to gain customers with this angle should be aware there is a growing intelligence around authenticity.
You may be a consumer that is more likely to purchase a product or service from a company that supports a cause. If so, how to you determine the real motivation of the company? More importantly, does it matter?