Working with non-profits on a daily basis, I am often asked to explain the concept of cause marketing. Once an organization understands that there may be a financial upside to this strategy they immediately follow up with this next question; “Describe all of the potential benefits of entering into this type of relationships?”
Cause marketing is a business strategy that aligns a company and its brand with a cause or a cause-related organization to generate business and provide societal benefits.
Early examples of cause marketing can be found in the Famous Amos Cookies/Literacy Volunteers of America and the Marriott/March of Dimes campaigns in the 1970’s, however, the term cause-related marketing was first used by American Express in 1983. At this time the Statue of Liberty Restoration Project was launched. During the campaign every American Express card transaction unlocked a penny and each new card issued, allocated a dollar toward the preservation of the Statue of Liberty and Ellis Island. Over a four-month period, $1.75 million was raised for restoration, new American Express users grew by 17% and transaction activity jumped 28%.
Cause marketing is often confused with social marketing and corporate philanthropy. However, cause marketing is NOT an attempt to change societal behavior NOR is it the giving of financial or in-kind contributions by a company. The corporate dollars involved are not outright gifts and therefore are not tax-deductible charitable contributions.
Nonprofits that choose to partner with a business via cause marketing have the potential for the following benefits:
- Increased revenue
- Increased visibility and awareness of their organization’s mission
- Attracting new volunteers
- Ability to connect with business partner’s stakeholders
- Potential access to partner’s business expertise
In addition fear-not about loosing current donors…research indicates that 86% of consumers state that purchasing a cause-related product will not replace the donations they traditionally make to their favorite charity.
Likewise, business partners understand and anticipate the upside of engaging in cause marketing. They often experience increased brand loyalty and employee morale. Research indicates that consumers will consider a business’ image and reputation before selecting a brand. According to the Cone Cause Evolution Study conducted in 2010, 83% of Americans would like more of the products, services and retailers they use to support worthy causes. These findings were further supported by the 2012 Edelman Good Purpose Study, which found that 87% of global consumers believe business’ should place at least equal weight on society’s interests as on their own. The study also concluded that less than a third of these same consumers believe business is adequately addressing societal issues.
There are several successful cause marketing models. They include the following types of campaigns:
Request donations at point of purchase through selling a product or a post-purchase consumer activity.
Online microsites or social media platforms designed to encourage donations and other online activities.
Use of an aspect of a nonprofit brand by a company in exchange for a licensing fee.
Use business resources to share a specific cause-focused message.
Cause and partner raise money and awareness via runs, walks, celebrations, clean-ups, health screenings, etc.
To honor the best of the best in cause marketing, each year the Halo Awards are presented.