Cause Related Marketing: Does It Pay to “Do Good”?

Now, more than ever, corporations and nonprofits are realizing the power of aligning companies and causes

A few months ago; YouTube was awash with leading personalities across the globe performing the Ice Bucket Challenge in support of the ALS Foundation. Thousands of programs designed to do well by doing good have been launched by businesses and nonprofits over the years. Many have been short-term and pedestrian, while others have been inspiring and impactful. Some notable ones are: Equity Bank’s “Wings to Fly” program, Safaricom did “Bring Zack Home”, Kenya Reinsurance had “Niko Fiti” campaign, Nation Media Group did the “KiliClimb”, Standard Group championed “Transform Kenya Awards”. So much is cause marketing a buzz that we have seen corporates forget their differences (as competitors) and come together and such we have seen assets like “Kenyans for Kenya”, “Save a Life” and many more initiatives have been conducted.

Does it really matter? Does it affect the bottom-line? Or is it a route to escape the theory of “the business of business is business”?

As years pass on, it is clear that the integration of social issues and business practices is not a passing fad of the yester centuries, but rather the beginning of a fundamental shift in how the world’s leading companies will use cause associations to position their organizations and brands for the future. Just as companies are finding it harder to “out innovate” or “out advertise” their competitors in a marketplace increasingly saturated with new brands, nonprofits too are competing with rival organizations for corporate support and public awareness. Strategic cause programs provide companies and nonprofits with valuable leadership and differentiation strategies as well as enhanced brand equity and credibility, greater reach and significant resources and relationships. Now, more than ever, corporations and nonprofits are realizing the power of aligning companies and causes.

What is Cause Related Marketing (CRM)?

In summary, CRM is a marketing activity-a way for a company to do well by doing good-distinct from sales promotion, corporate philanthropy, corporate sponsorship, corporate good samaritan acts, and public relations, though it is often an amalgam of such activities. In the absence of a formal definition of CRM in the marketing literature, the following definition is proposed as advanced by Varadarajan & Menon (2012)

Cause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives

Perhaps the best example I can give is when American Express first used the phrase "cause-related marketing" in 1983 to describe its campaign to raise money for the Statue of Liberty’s restoration. American Express donated one cent to the restoration every time someone used its charge card. As a result, the number of new cardholders grew by 45 percent, and card usage increased by 28 percent.

Transparency is Mandatory

Programs run the right way and in place for the long term can stand up to this scrutiny. If a program is to survive in these times, it must follow one of the most important canons of cause branding: transparency. Because it is no longer a new method of branding, cause marketing will be held to the same standards as other methods of branding. Are you staying true to your CRM promise?

Appliance maker, Whirlpool, transformed its previously little-known commitment to provide a range and refrigerator for each Habitat home built in the U.S. into a major driver of brand loyalty with a multimedia campaign featuring Reba McEntire. What's more, they did all cause marketers a favor by measuring and sharing the impressive results.

Formalize Your Affiliation & Communicate

For years, generally accepted beliefs led brands to avoid being boastful about their good works. Yet smart brands have recognized that consumers expect to hear about what a company is doing to contribute to the greater good. Educated consumers demand to know every facet of your business -- and that includes your cause.

Product Red  seeks to engage the private sector in raising awareness and funds to help eliminate HIV/AIDS in Africa.

(Product)Red founders Bono and Bobby Shriver boldly threw out the cause-marketing rule book to create (Red). Their privately held company created and licensed a hot brand to The Gap, Apple, Armani and other marketers and staged an unprecedented launch. Although often criticized for a lack of transparency, (Red) has raised more than $140 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria and continues to attract new corporate licensees such as Nike and Starbucks.

Old School Account Management Principles Work

As the saying goes, people give money to people. Taking it one step further, people do more for those they like and trust and those who care. Cause-related partnerships—like all good relationships—are about caring for your partner’s needs. Classic account management means that one person handles our partner’s account, and acts as that partner’s principal contact within the organization. A management team may be involved—during brainstorming sessions, for example—but when the partner wants answers; they know exactly where to turn. 

Nike relationship with Livestrong Foundation soured with revelations of performance-enhancing drug use by Armstrong and members of his US Postal Service team.

When the Nike and Lance Armstrong Foundation came up with this idea to raise funds and awareness for the supercyclist's cancer charity, no one dreamed it would become a worldwide fashion item worn by presidential candidates, movie stars, kids and grandmothers. To date, more than 70 million of the glorified yellow rubber bands have been sold for $1 each. However, when Lance Armstrong was hit by doping allegations; Nike walked out on the one time celebrated athlete that saw a sharp drop in donations.

What Do You Stand For?

As cause marketing continues to evolve, so too will the public’s expectations about how companies address social issues. In the next century, “What do you stand for?” will become one of the most commonly asked questions by potential donors, employees, investors and business partners before entering into any relationship. Customers are just better at filtering out and ignoring the messages that don't appeal to them.

There is no turning back now. Cause Branding falls at the intersection of corporate strategy and citizenship and is fast becoming a “must do” practices. It does pay to "Do Good".

@jatelospensir

Rebranding? Work It or Drop It

Rebranding is rarely done for aesthetic reasons and almost always done to strengthen the business to compete better with rivals or to signal a change in the direction of the company

What people usually mean when they start talking rebrand is putting a new spin on things. Changing perceptions without changing the business. Sometimes, just changing a logo is thought of as a rebrand. Other times, a name change is all that’s required. But really that’s the equivalent of putting some extravagant graffiti and big car stereo on the same ramshackle of a car. Everyone knows the same car is under that new paint job and blazing music, and they won’t believe it’s a new car.

Let’s give Steve Blue audience at the onset “No matter your reason for embarking upon a business rebranding effort of a company or product name, logo, phrase, design scheme or other such asset, which can be mixed and many, one thing is certain: execute poorly and suffer extreme consequences. There is simply no rebranding effort where the stakes are not extraordinarily high and the margin for error is slim at best.”

So what is Rebranding?

Nigel Hollis in his book The Global Brand (2008) did define a brand as “a set of enduring and shared perceptions in the minds of consumers. The stronger, more coherent and motivating those perceptions are, the more likely they will to influence purchase decisions and add value to a business’”. For the remainder of this article I will use Nigel Hollis definition of a brand.

Therefore any attempt to change these perceptions can be termed as a rebrand?

Quite a far-reaching process, isn’t it?

True, rebranding rarely happens all at once, it’s an evolutionary process that may take several years. A company slowly changes and eventually realizes they’re not the same company any more. So they make it official by changing the logo and shifting their marketing; but more importantly they shift their set of enduring and shared perceptions in the minds of consumers. That’s what happened to AOL, now Aol, and I would say they have a true rebrand, albeit one that has been forced on them over the years since their disastrous merger with Time Warner. Aol used to be an internet service provider, now they are an internet content provider.

Right Actions, Powerful Results

Companies have been rebranding for decades in hopes of perking up their sales. But for many, it’s done the opposite. So what makes or breaks a rebrand? Redesign must happen for the right reasons and symbolize a transition in the company – not just the packaging.

 Redesign must happen for the right reasons and symbolize a transition in the company – not just the packaging

Eric Thoelke, president and executive creative director of TOKY, gives valuable advice when it comes to redesigns. He asserts that rebranding is very rarely done for aesthetic reasons and almost always done to strengthen the business to compete better with rivals or to signal a change in the direction of the company, like a merger, acquisition or spin off. Companies may also choose to redesign their brand if they’re expanding their product offering or target audience. However, if a business is rebranding for the sake of a fresh look, it’s usually a sign there’s not enough investment in the project to make it successful.

Nation FM has “rebranded” how many times? Have all these moves from Nation FM to easyfm then back to Nation FM been a success stories? Question is did they satisfy the factors needed to necessitate a rebrand? I do not know if your guess is as good as mine; after all it’s a guess.

Radio Africa takes a jab at NationFM

Let us look at the Britam rebrand from Britak. They did maintain their legal name of British American Investments Company (Kenya). Britam Group Managing Director Benson Wairegi  “We have decided to adopt what you’d call a monolithic brand; meaning a single brand which embraces one culture and one set of values”. It is clear that Britam had strong rebranding factors, goals and processes. Something that is always lacking in most companies even in simple matters as redesigns. Britam has clearly satisfied the Muzellec and Lambkin (2006) rebranding model. Their growth is evident in firm’s financial performance.

Muzellec and Lambkin (2006) rebranding model

Keep walking the walk: You have to live the brand

Once the launch party fades, the hard work begins. Hopefully, by now, your entire company agrees that your brand consists of everything that has anything to do with your company, and that your brand goes everywhere. Your stated values must become reality. Anyone who interacts with your people or your products, receives an invoice, or sees your logo—really anyone in any circumstance—expects an experience that aligns with your brand attributes. That's not to say you shouldn't test, test and retest to see what's working. Constant learning helps your make slight course corrections as you build out your messages, stories, website, image library, and other business resources.

This draws me to the rebrand of The Kenya Power & Lighting Company (KPLC) to Kenya Power. The press release after the rebrand did state they had embarked on a corporate culture change and rebranding exercise in 2009 with the aim of transforming the distribution network in order to render more reliable and responsive services to customers and to sustain its good financial performance. The project entailed creation of a new organizational culture, a new logo, and a corporate brand which supports the company’s long term objectives and meets the increasing expectations of its customers. They did this so well in some aspects:

         i.            Social media interaction

       ii.            Multiple and easy bill payment systems

      iii.            Self-care platforms for customers

     iv.            Faster installations

       v.            Their Ads are super cool

However, some items still remain and it is imperative they keep walking the walk; and live the brand.

         i.            Not all their vehicles bear their new corporate colors

       ii.            Some of their internal documents for a long time had their old logo

      iii.            Customer service at their centers still remains appalling

Failure to do this then you are quickly heading the Kodak way. Where no amount of rebranding can set you free. Steve Blue put’s it quite well when he states “Your logo, tagline, typography and design should tell a single-minded story”. That story must drive towards the ultimate benefit your brand provides to its customers. Kodak had satisfied 3 out 4 of this but in design (of their business) they failed. They never lived their brand promise of “Share Moments; Share Life”.

BRAVE Leadership

George Bradt advises that a brave approach to rebranding can make all the difference – like it did when Blue Ribbon Sports rebranded as Nike. Work from the outside in and think through your environment, values, attitude, relationships and behaviors.

Environment: Begin with the context for your rebranding. What changed?

Values: Anchor everything in what matters and why – to your brand’s customers.

Attitude: Close the gap created by changes in the context: strategy, posture, culture.

Relationships: First do no harm to your brand’s relationships with customers. Then build.

Behaviors: Maintain control of the rebranding process. How matters as much as what.

Rebranding means re-promising. It means fundamentally changing what you offer, because the foundation of any brand is what it promises to deliver. Want a new brand? Deliver a new promise.

@jatelospensir

Positioning: A Company’s Pivot Point

A basketball player can move around freely in a complete circle, as long as he keeps one foot firmly planted in place, a company can move in a number of new directions, as long as it stays true, and don’t move, from their pivot point

“In the world, there’s trust. I think as humans we fundamentally parse the world through the people and relationships we have around us. So at its core, what we’re trying to do is map out all of those trust relationships, which you can call, colloquially, most of the time, friendships” Mark Zuckenberg. These words by Facebook founder are similar thoughts shared by leading companies anywhere in the world. They have always built their companies from a different point of view; and not necessarily a better point of view (POV). Leaders of well-known businesses take positioning seriously. They make a choice to be different, purposely positioning their companies to create or disrupt a very big market category. They know the real power of marketing is to catapult the company into a dominant, defendable position in a hot category. That’s how they achieve higher growth rates, margins and market caps (valuations) than their competitors.

To determine your positioning, you must know your pivot point. You cannot build a dominant, defendable market position by playing the same game as your large incumbent competitors. You have to change the agenda in the market to give yourself a fighting chance.

Market your Pivot, not your Company or Product

A company’s (not product) pivot point is the defining attribute, the central theme, around which everything revolves. Just like a basketball player can move around freely in a complete circle, as long as he keeps one foot firmly planted in place, a company can move in a number of new directions, as long as it stays true, and don’t move, from their pivot point.  By aligning with position vs a product, you can expand and grow your company in new directions.Nike’s affirmative “Just Do It,” captured the essence of their brand message, and created a committed fan base that buys everything from sunglasses and shorts to watches and golf balls. Not bad for a running shoe company.

 Volvo could easily market a child car seat with their reputation for safety. 

Only when they believe in the what, will they buy your how. Said a different way, if you want people to buy Bibles, first they have to be Christians.

Be Different, not Better

Many business leaders fall into the “better” trap. They truly believe winning is about having a better product and sales channel. To win big, you must be different. Different works because it is intriguing and believable. Customers understand it. Choosing between different offerings is easier than choosing between similar offerings. “Should we have juice or ice cream?” is an easier decision than choosing between two similar ice cream brands. Different also protects your price. When two companies say their products are better than the others, customers conduct proofs of concept and often break the tie with price.

To make being different work, you also have to be clear about how your difference is clear, tangible and valuable to customers, partners, employees and shareholders. Any frequent flyer can feel the difference between Virgin Airlines and other airlines instantly. One is a company run from a pivot of delivering a unique travel experience and the others are run by bean counters who view the market through a spreadsheet. You can buy it, taste it and feel it.

To win, your product has to be governed by the pivot. If not, you’ll end up competing on price and features

Your Pivot Sets your Market Valuation

The value of your company is driven by the facts about your business and the way people feel about it. Powerful stories create powerful emotions. People relate to and remember stories, even people who make living analyzing facts. A powerful point of view sets the context for interpreting your quarterly financials. This reality makes the story about your business more important than the facts about your business. Sound outrageous? Maybe, but it’s true. Your story to investors must communicate the size and growth rate of your category and how you are positioned to win in the category, not just your numbers.

In conclusion, legendary companies have one thing in common. They achieve dominant, defendable positions in market categories that matter. That’s why they have higher growth rates, margins, and market valuations than their competitors. Your pivot sets the strategic context for your business. It’s how you communicate your strategy and value. It defines what category you’re in, what makes you different, and why people should care. Ultimately companies that have a powerful pivot stand a much better chance of creating significant, long-term value than companies that don’t.

@jatelospensir