Friday, December 30, 2011

Cause Marketing Explained

Thompson and Pringle, in their book Brand Spirit, define cause-related marketing (CRM) as a partnership between a for-profit and a non-profit business for the mutual benefit of both. This form of societal marketing is practiced by any number of large companies including Patagonia, American Express, Marriott and PetsMart. Of course, when it comes right down to it, it’s not quite that simple.

What Cause Marketing Isn’t

Cause marketing isn’t philanthropy. You notice I said “for the benefit of both” earlier. When a company supports a philanthropic cause, it does so without the expectation of generating business, although they may expect a positive impact on brand equity. It also isn’t societal marketing, although it does promote societal benefits. The difference is that societal marketing is in the nature of “Don’t do drugs”, “Don’t drink and drive”, “ Stop smoking” and so on.

Benefits for Non-Profits

There are a multitude of advantages available:
  • Increased revenue
  • Enhanced visibility of the cause or the nonprofit’s message
  • Increased volunteer pool
  • Access to new audiences
  • Connections to the corporation’s network of employees, suppliers, distributors, and other contacts
  • Expertise in marketing, strategy development, and other corporate experience

Benefits for Businesses

The many benefits of cause marketing for businesses of all sizes include:
  • Greater awareness for company product or service
  • Increased sales
  • Access to new audiences
  • Competitive advantage
  • Increased brand image and awareness
  • Higher employee retention
  • Highlight to be used in employee recruiting
  • Opportunity for new strategic partnerships
  • Technical expertise from nonprofit partners
  • Training and development opportunities for upcoming company leaders and staff

Consumer Perception

According to Cone’s 2010 Nonprofit Marketing Trend Tracker, More than three-quarters (78%) of Americans believe a partnership between a nonprofit and a company they trust makes a cause stand out. When the cause breaks through, consumers are more likely to feel positively about the nonprofit (56%) and actively support it. As a result of nonprofit-corporate partnerships:
  • 50% are more likely to donate to the nonprofit
  • 49% are more likely to participate in an event for the nonprofit and
  • 41% are more likely to volunteer for the nonprofit.
According to Cone’s 2010 Cause Evolution Study:
  • 83% of Americans wish more of the products, services and retailers they use would support causes. In addition,
  • 80% of consumers are willing to switch from one brand to another brand that is about the same in price and quality, if the other brand is associated with a good cause.
  • 61% are willing to try a new brand or one they’ve never heard of if associated with a cause.

Employee Engagement

Employees are what you would call “cause shareholders”. They are invested in what their company is doing. They are willing to roll up their sleeves and get their hands dirty to support causes that are important to them. Going back to Cone’s Cause Evolution Study, “Employees who are very involved in their company’s cause program are 28 percent more likely to be proud of their company’s values and 36 percent more likely to feel a strong sense of loyalty than those who are not involved.” Companies who are not engaging their employees are clearly ignoring an untapped resource.

The Win-Win Scenario

The question now isn’t “Why CRM?” but “Why not CRM”? With this information in-hand, how can you afford not to look seriously at a cause-related marketing strategy? There’s no question that it’s beneficial to both partners for both the soft and hard bottom lines. In my next post we’ll take a look at things to consider when looking for a partner for your CRM strategy.


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