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