The Beginning. In 1984, American Express launched a campaign pledging to donate a penny to the Statue of Liberty restoration project for each cardmember transaction and $1 for each new credit card. The results – a 28% jump in transaction activity and over $1 million raised! This campaign caught the attention of nonprofits seeking additional fundraising opportunities and companies looking to enhance their corporate image while maximizing sales and profits. The American Express campaign essentially launched the practice of cause marketing. Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a for profit business and a non-profit organization for mutual benefit. Today, cause marketing is a $1.8 billion industry and growing.
Many benefits for nonprofits and companies. For nonprofits, not only does cause marketing create an additional fundraising opportunity, it also creates an opportunity to expand reach and utilize another company to increase awareness. For companies, there are several studies that indicate an uplift in brand equity and revenue:
• 85% of consumers have a more positive image of a company if it’s associated with a cause they support (Cone, 2010)
• 74% of consumers are more likely to buy from a brand because its associated with a cause (PRWeek/Barkley, 2010)
• 94% of consumers are either somewhat likely or very likely to switch to a brand with a good cause when price and quality are equal (Cone/Echo, 2011) In particular, the social conscientiousness of younger generations is driving growth in cause marketing. Millennials (18-24 years old) are ~12% more likely to buy a product that supports a cause than the general population.
Not just for large companies. We all see those large brands that continually sponsor nonprofits and community initiatives. They recognize the value of this exposure and have the pocket books to donate. This exposure leads to increased awareness, leads, prospects and customers. With limited budgets and resources, small businesses are often more challenged in gaining exposure. Today, small businesses utilize many different forms of marketing tactics, from traditional print and TV to digital forms such as email marketing and social media. Because small businesses are often limited in funds they can donate to nonprofits, many assume cause marketing is only for the big guys. There are, however, creative ways to leverage the power of cause marketing in a cost-effective, revenue-generating manner. The simplest example is to donate a portion of proceeds from a sale to a nonprofit. By utilizing this method, donations are only made when a sale is made.
A strategy is critical. Just picking a cause and donating may not achieve the win-win benefits desired by a small business. With a clear strategy around cause marketing, and an integration of this strategy into a broader marketing strategy, a small business can expect to achieve positive results. A cause marketing strategy should help identify:
1) your business and social goals
2) nonprofit organizations that fit your goals and can reach your target markets
3) tactics and campaigns that can deliver fundraising dollars and business results.
While cause marketing is a great win-win strategy, keep in mind that just as building a brand doesn’t happen overnight, building a “socially conscious” brand will also not happen immediately. A long-term commitment is essential to seeing results.