Cause related marketing is a mutually beneficial collaboration between a corporation and a nonprofit organization. It is regarded as one of the best win-win strategies in today’s economy. As competition gets tougher, businesses seek alternative ways to differentiate themselves while non-profit organizations recognize the need to diversify funding sources and develop business alliances that enable them to more effectively and efficiently accomplish their missions. It encompasses a wide variety of commercial activity that aligns a company or brand with a cause to generate business and societal benefits.
Cause related marketing is often confused with social marketing, which is defined as the marketing techniques used to impact societal behavior (e.g., stop smoking, don’t pollute, don’t use drugs, don’t drive drunk.) It is also not a part of corporate philanthropy which refers to giving without any expectation of direct corporate gain.
The concept is becomes more popular as customers become more sensitive to certain causes. For instance, you may recall the ads that feature a pink ribbon attached to a variety of products, ranging from fast food to cosmetics, as a gesture for increasing the awareness of breast cancer. Other examples include requests for small donations to charities at the supermarket checkout, public awareness campaigns for various causes and licensing of well-known charity trademarks and logos to be used on products.
There are various ways a business and a non-profit organization can join forces. The most common methods can be grouped as follows.
Purchase-triggered donations: This is one of the most common examples of cause related marketing. A company pledges to contribute a percentage or set amount of a product’s price to a charitable cause or organizations.
Advertising: Where a business aligns itself with a particular cause and uses ads to communicate the cause’s message.
Public relations: A business calls press and public attention to a strategic partnership between itself and a non-profit group.
Sponsorship: A business helps fund a particular program or event.
Licensing: A business pays to use a charity logo on its products or services
Direct Marketing: Both a business and a non-profit raise funds and promote brand awareness.
Facilitated giving: A business facilitates customer donations to a non-profit or a charity their choice.
According to Cone’s 2010 Nonprofit Marketing Trend Tracker, more than three-quarters 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 and actively support it. As a result of nonprofit-corporate partnerships:
- 50 percent of customers are more likely to donate to the nonprofit;
- 49 percent are more likely to participate in an event for the nonprofit; and
- 41 percent are more likely to volunteer for the nonprofit.
The rewards of cause related marketing make it a clear choice. The most important rewards are:
- Engagement with added value;
- Increased revenue;
- Enhanced visibility of the cause or the nonprofit’s message;
- Increased volunteer pool;
- Access to new audiences and target markets; and
- Connections to the corporation’s network of employees, suppliers and distributors.
Experts warn that, despite proven benefits, the success is not guaranteed for all. The execution of the concept requires both businesses and nonprofits to do their homework before announcing a partnership. Nowadays, so many brands engage in some form of cause related marketing that differentiating and developing brand loyalty becomes almost impossible. This is particularly true during October, when virtually every company in the consumer-products industry touts its products as being “pink” (for breast cancer research and survivors) as well as during the holiday season, so much so that consumers are actually starting to get turned off by these initiatives.
In order to overcome the obstacles, both parties need to be transparent, selective and creative.
It is highly recommended that businesses communicate very clearly what charity they’ve chosen and why. It also helps to share information about how effective the charities are. Furthermore, it is a good idea to share some information about how much money the charity is getting through the campaign and how the funds will be used. Gamifying certainly helps to convey the progress and motivate for more. This will help customers see that your campaign is serious about making a difference. After the campaign, please make sure to publish follow-up information. That will give customers confidence in your brand and set the stage for future campaigns to be even more effective.
Nonprofit organizations need to make sure that their business partner is legitimate and the vision of the business aligns with the cause. It is also a good idea to clarify the objectives and metrics before the launch of the campaign. Providing feedback about the effectiveness of the campaign encourages both the business partner as well as their customers to give more.
Cause related marketing is an effective way to differentiate a business while helping a good cause. It is crucial that both parties clearly communicate their objectives and the progress made by the campaign. The recommendations mean doing some homework, but it’s well worth the time and effort.
If you know a good cause related example in Hawaii, please share with us in the comments section.Photos: Krystal T, Sarah, EJP