Everyone's Waxing Philanthropic These Days

But Cause Marketing Pays Off If You Do It Right

By Published on .

Paul Bloom
Paul Bloom
Cause marketing surrounds us. Open a magazine or newspaper and see ads for Product Red clothing, phones and iPods telling you that every purchase will trigger a donation to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Watch a basketball game and see messages touting NBA Cares, a community-service program involving the league's players. Run in a Race for the Cure 5K, benefiting the Susan G. Komen Breast Cancer Foundation, and see sponsor logos for Yoplait and Ford on your T-shirt. Go shopping at Target and be reminded that 5% of its income goes to community causes.

Conceived by American Express in the 1980s -- when it promised to make a contribution to help refurbish the Statue of Liberty every time someone used an American Express card -- cause marketing has become pervasive. Companies of all types have embraced the practice, defined here as any marketing initiative that tries to improve brand sales by demonstrating commitment to a social cause.

Cause Marketing:

Top Advertisers Add Meaning to Marketing
P&G, Others Aim to Aid, Not Invade, by Crafting Purposeful Campaigns
Yes, There Is an ROI for Doing Good
But Numbers Are Hard to Come by for Efforts by McD's, Sears and Others
Why has it caught on? Above all, companies are looking for ways to differentiate their brands from their competitors,' and supporting a cause can be a better way to do that than adding superfluous product features or making minor upgrades to customer service. That is especially true for brands that are competing for the loyalty of a growing segment of socially conscious consumers, such as Whole Foods and Patagonia.

At the same time, companies have shifted the way they handle philanthropy, and that, too, has spurred interest in cause marketing. Donations are no longer disbursed based on who makes the most compelling case for neediness. Instead, companies are thinking strategically, looking for consistency between their corporate missions and their donations. A company like Kellogg, for example, may build its philanthropy and cause-marketing projects around nutrition and health, while IBM focuses on education.

Still another factor behind cause marketing's rise is more-savvy management at nonprofits. Executives at organizations such as City Year and Boys & Girls Clubs of America have become very adept at making the case for the financial returns companies can earn from cause partnerships. City Year has attracted long-term commitments from the likes of Timberland, and Boys & Girls Clubs has attracted for-profit partners such as Crest and Coke.

Paul Bloom is an adjunct professor of social entrepreneurship and marketing and interim faculty director at the Center for the Advancement of Social Entrepreneurship at Duke University's Fuqua School of Business.
Companies also may be upping their cause-marketing efforts as a way to attract and retain employees. Young people today want to feel good about the companies where they work.

Additionally, cause marketing may help a company look good to Wall Street investors or to government regulators.

But with so many companies hopping on the cause-marketing bandwagon, will consumers become immune to it? Will it wear out its welcome as a brand differentiator?

That's a distinct possibility, especially if too many companies pursue programs that consumers perceive as insincere public-relations stunts.

For cause marketing to continue contributing to brands as well as causes, marketers need to pay special attention to three things: consumer research, relationship building and long-term buy-in.

Consumer research can help a company determine which cause to align with in the first place. Adherence to mutually beneficial partnerships can bolster credibility and effectiveness. And because cause-marketing programs must be given a chance to survive for a long time, they cannot be discontinued because of poor initial results; that can make all parties involved appear insincere and opportunistic rather than deeply concerned with the cause.

Cause marketing may indeed be ubiquitous, but it can still pay off as a win-win strategy for both companies and their cause partners. As long as causes that consumers truly embrace are promoted -- in a creative, collaborative, sincere and sustained way -- companies can differentiate themselves profitably from their competitors. And that, in turn, should allow many needy cause organizations to attract more financial resources than they would be able to with traditional fundraising approaches.
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