Tarnished Halos

Why Company-Named foundations Benefiting from Cause-Related Marketing Rub Me the Wrong Way.

Just this month I’ve seen cause-related marketing campaigns for McDonalds and the Ronald McDonald House Children’s Charities; PETCO, and the PETCO Foundation; and, JC Penney and the JCPenney Afterschool Fund.

Two other general merchandise retailers, Kohls and Mervyns, run ‘charity-flavored’ campaigns through their community relations departments. The Kohl’s program, called Kohl’s Cares for Kids, supports child injury prevention and immunization programs, and children’s hospitals. Kohl’s Cares for Kids is not an actual charity, although like JCPenney Afterschool Fund it uses the sales of plush toys to fund their campaigns.

I don’t want this to be a 2,000-word post, so I’ll concentrate on the JCPenney Afterschool Fund. The organization, a 501(c)(3) public charity was formed in 1999 and “dedicated to ensuring that every child is safe and constructively engaged during the afternoon hours,” says the website.

Along with the National Football League, they sponsor the NFL Take a Player to School Sweepstakes for kids age 6-13. They also support the JCPenney JAM: Concert for America’s Kids. The June 2006 event was hosted by Dr. Phil and produced by fancy-pants Hollywood producer David Foster. Acts incuded Sting, Mary J. Blige, 3 Doors Down, Kenny Chesney and others. The concert along with behind the scenes footage is available from jcp.com for $14.99.

“In 2006” the website informs us, the “JCPenney Afterschool Fund grants will provide over 10,000 children with access to safe, enriching aftershool programs,” through their partnerships with Boys & Girls Clubs of America, YMCA of the USA, National 4-H Council and United Way of America.

In 2005, the JCPenney Afterschool Fund’s audited financial statements said they took in $11.4 million and spent $6.5 million on program expenses. That is, they spent $6.5 million on their mission.

Why does this rub me the wrong way?

Because you and I are paying for all this. Everyone that attends the JCPenney Afterschool Fund’s annual gala, or buys the plush toys or the DVD of the JCPenney Jam is paying for it.

And while kids benefit, so too does the JCPenney corporation. Because by naming the charity the JCPenney Afterschool Fund, they ensured that their name gets plastered all over everything the charity does.

JCPenney corporate gets a halo and you and I pay for it.

Wait a minute, you say, cause-related marketing is about trading a nonprofit’s halo for a company’s cash. True enough. But I would argue that JCPenney is being too clever by half.

People instinctively realize that JCPenney is playing both sides of the fence. And so, while the cause-related campaigns apparently do fine I predict that they'll probably underperform. That is, that they could do even better if they weren’t tethered by the JCPenney name.

Secondly and ironically, the halo to JCPenney corporate would be bigger and brighter if the charity were not named for the company.

High-Dollar Product Marketers, Jump-In!

High-Dollar Cause-Related Marketing Comes of Age

Cause-related marketing has long been especially common in packaged goods promotions; Wish-Bone Dressing and Make-A-Wish or Yoplait and Susan G. Komen, to name just two. But does cause-related marketing work with high-dollar goods and services? More and more the answer is yes.

Above are four recent campaigns… from Dell, Oreck, American Century Investments, and Levenger… that increasingly demonstrate that cause-related marketing has legs even when the items in play cost hundreds or dollars or more.

Let me hasten to add that none of these high-dollar cause-related marketing promotions are exactly ‘first-movers.’

Ford and BMW have both done cause-related marketing promotions.

Kitchen Aid has long made special editions of their appliances in pink that generate donations for Susan G. Komen. They’ve also done straightforward ‘buy a qualifying dishwasher and we’ll donate $50 to Susan G Komen’ promotions.

Whirlpool… which owns Kitchen Aid… donates a refrigerator and a range for each new Habitat for Humanity home, but does not tie a donation to a purchase. Instead they use country music star Reba McEntire to solicit donations for Habitat. (They have also sponsored Reba’s tours.)

In October 2005 in the wake of Hurricane Katrina Oreck, which has a factory in Long Beach, Mississippi, not only kept their factory going, but housed employees and their families on the factory’s grounds. At that time, Oreck promised to give a matching vacuum to a family affected by Katrina for every Oreck sold. It was a ‘ten-bagger,’ to appropriate legendary investor Peter Lynch’s term, because it got their employees back to work and it put vacuums in the hands of people cleaning up after the devastation. Nice!

None of the high-dollar campaigns illustrated are exactly peerless in the execution of their promotion. Dell’s campaign promises to donate a portion of the proceeds to Susan G. Komen. ‘Proceeds’ is a mighty slippery word. Likewise, American Century Investment’s language that investments in the branded funds ‘can’ help support the mission of LiveSTRONG is just a few steps this side of weaselly. Levenger’s effort for the George Eastman House doesn’t exactly warm the cockles of my heart. And, I can’t shake the suspicion that Oreck merely raised the price of their special-edition vacuum $50 to cover the $50 donation to Susan G. Komen for demo’ing their vacuum.

But add these campaigns to the recently-reviewed campaign for Montblanc watches and it’s becoming clear that marketers and nonprofits are using tactical cause-related marketing to bring heart and customers to their high-dollar products and services. This makes perfect sense since surveys in the States have long shown that higher-income people are those most responsive to cause-related marketing.

So to marketers of high-dollar goods and services I say, there’s no longer a need to just dip your toe in. Cause-related marketing is a proven marketing tactic for your audience. Jump right it, the water's fine!

Les Schwab Tire Ad for Rotary Coat Drive

Huzzahs to Rotary and Kiwanis, the Un-Red

While everyone else is fawning over the new Red campaign, your humble servant is reviewing a very local campaign that gathers coats and winter items for the less fortunate here at home.

But wait, you’re saying, isn’t this out of character? Aren’t you the one who said that for cause-related marketing campaigns “sponsorship is about eyeballs, [but] the sisters of the orphans and all their charity cousins think it's about tears. When it comes to cause-related marketing, they're only half right.”?

Yes I did. And yes I still believe that. But I want to demonstrate that the principles of good cause-related marketing can scale up… as in the global Red campaign… as well as they scale down.

This ad, which appeared in the local newspaper on Sunday, November 12, 2006 wrapping the comics page is for Les Schwab, which sells tires. Les Schwab, headquartered in Prineville, Oregon has about 400 outlets in seven western US states. Their prices are competitive, but their most distinguishing trait is that when you pull onto their lot, someone sprints out to your car to help. It’s service with a smile and an accelerated heartbeat.

Forbes magazine estimates that Les Schwab does about $1.2 billion in sales. Or as the Brits say, they have turnover of about $1.2 billion. But they work very hard at staying true to their small-town roots. Their stores do an annual barbecue, for instance. This ad is example of how they’re willing to turn over some space to a local Rotary chapter.

Now the ad isn’t very good. It’s buried below the fold. It depends too much on people having a favorable opinion of Rotary International as well as unit 24. The ad doesn’t say to whom the coats and winter items will go. Everything in the ad is bold. And like the old saying goes, when everything’s bold, nothing is. It’s all text and it’s too small.

Moreover, why didn’t Les Schwab kick in a set or four tires for some lucky donor? Or maybe one set of chains per store to whoever brought the most winter items. Couldn’t they have teamed up with local scouts who’d go door-to-door on some predetermined date to collect the coats?

Rotary unit 24 did their best, but their best isn’t very good.

In the interest of full disclosure, let me say that I’m not a member of any of the service clubs, but I have had numerous positive dealings with Rotarians. Moreover, when I was at Children’s Miracle Network one of my accounts was Kiwanis International, so I know their work very well and hold both groups in the highest esteem. I’m saddened to say that while both these storied groups do well enough outside the United States, inside the States both struggle with declining growth rates.

That’s a pity because in a world of flashy campaigns like Red, it’s easy to forget that the Rotarians did more than any other entity to eradicate polio worldwide. Likewise, the Kiwanians have done more to end iodine deficiency worldwide, the leading cause of preventable mental and physical retardation.

But will any stars of the stage, screen or performance hall show up to congratulate them? Only if they’re past age 60!

Huzzahs to Rotarians and Kiwanians for their large campaigns and for small ones like the coat drive, even when they could be a lot better.

Join Cause-Related-Marketingatgooglegroups.com

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Yuban Dark Roast

Certification Exhaustion

A few years back a would-be client came to me with an interesting question: would people in the first world support cause-related marketing that served people in the Third World?

In their case, they were building children’s hospitals in Africa, Asia and Latin America. That sounds like a mountainous undertaking, but the fact is, you can build and equip a pretty darn good children’s hospital in Uganda, India or El Salvador for pennies compared to what it would cost in North America or Europe.

I didn’t have a ready answer for these folks, but I told them there were two ways to test the idea. Either they could commission a rock-solid probabilistic conjoint survey for $25,000 más o menos, or they could hire me to build them a campaign for the same amount of money and we’d test it in the marketplace.

I’m still not sure of the answer, but increasingly it seems that companies are willing to test in the marketplace the idea of cause-related marketing in the First World to the direct benefit of the Third World.

In this ad that ran in Parade Magazine on Nov. 5, 2006 Yuban is promoting a blend of coffee certified by the Rainforest Alliance, a New York City-based nonprofit whose mission is to “to protect ecosystems and the people and wildlife that depend on them by transforming land-use practices, business practices and consumer behavior.” You gotta admire that kind of ambition from an outfit with a $12 million budget.

The Rainforest Alliance criterion for sustainable agriculture runs to 41 pages. They have additional criterion for bananas, citrus, coffee, cocoa, pineapple, and flowers & foliage. The coffee addendum is an additional eight pages and covers things like the minimum number of native species of trees required per hectare, shade density, irrigation canals, slope, fertilizer, child labor (which is allowed only if they don’t have school obligations and they must be paid in cash), native habitat remediation, etc.

This is tricky stuff because there’s a natural tendency to want to try and include everything.

I have some personal experience with nonprofit certification. While I was at Operation Kids I created the criteria to be an “OK Charity.” After a lot of hard-chair thinking and reading I came to the idea of the Code of Honor required of students at places like the College of William and Mary, the US Service Academies and Brigham Young University (BYU). At West Point the code reads: “A cadet will not lie, cheat, steal, or tolerate those who do.” By contrast, the honor code at BYU, is much longer and more inclusive. When I got to the end of the process, the OK Charity criterion was relatively short. But still it has teeth because it includes a (succinct) honor code of its own patterned after the one West Point uses.

In contrast to the detailed all-inclusive certification criterion from the Rainforest Alliance, there’s a second, better-known (and less ambitious!) certification outfit in Europe called Fairtrade Labelling Organizations International. There’s more to it than this, but basically they set a minimum price for coffee (plus, bananas, cocoa, etc.). To receive Fairtrade certification a purveyor has to pay the producer a nickel per pound above that price, .15 cents more per pound to receive the organic certification. They also certify the producers as well.

I don’t know which certification approach will win the day. But I understand that during the Dark Ages Catholic monks tried to enumerate every possible sin. Ultimately the Christian world ended up not with an exhaustive catalog of sins, but with the broader categories outlined by the “Seven Deadly Sins.”

And so I wonder, does Vanity describe the Rainforest Alliance's approach?

Montblanc Nicolas Cage Ad

Seeing Through The Wicker Man Darkly

It’s almost impossible to overstate how much transparency matters in cause-related marketing.

It’s more important than the campaign's creative. It’s more important than the offer in the campaign's advertising. It’s more important than the appeal being made.

Here’s why. Americans are a ridiculously generous people when it comes to charitable giving. Much of that generosity is directly attributable to our tax laws, which encourage charitable giving. Part of it is attributable to the thinness of the public welfare net in the U.S., as compared to Europe or Japan. Some it can be attributed to our native “communal self-government,” first highlighted in Alexis de Tocqueville’s Democracy in America back in 1840.

What powers all that is trust. Americans trust charities almost implicitly. Even when they’re skeptical they trust that the Congress and the IRS, along with state and local regulators, will keep charity noses clean. And the IRS and the state regulators largely trust that charities and churches will use well their franchise from the government. Audits are relatively rare. And while charities are generally required to register annually within the states where they do business and have to submit to an IRS review every five years, the fact is that for most charities compliance efforts are largely perfunctory. With a million plus 501(c)(3)s it’s kind of a creaky old framework that works, for the most part. But the armature begins to shudder and shimmy when there’s no transparency.

Not enough transparency is what’s wrong with this ad from Montblanc that runs in the Nov. 13 issue of Fortune. The ad features actor Nicolas Cage flashing his best open-mouth celebrity smile with a Montblanc Timewalker chronograph on his wrist. The ad copy tells us that “With your purchase of a Montblanc Timewalker, you are supporting a significant donation by Nicolas Cage and Montblanc to the ‘Heal the Boy’ organization.”

Trouble is, I couldn’t find any mention of Heal the Boy anywhere. That’s not to say it doesn’t exist. It could certainly be a new nonprofit that hasn’t shown up on the radar anywhere. The IRS approves dozens every day. It could be a program of an existing nonprofit. It could be an international nonprofit. The Brits, Canadians and Australians all have ‘registered’ charities that are pretty easy to track online. No doubt other countries do as well, but it’s a little tricky for me (as an English-only speaker) to track charities outside the English-speaking countries.

Heal the Boy may not even be a nonprofit. No law in the U.S. forbids for-profit companies from having non-profit-like 'missions.' Although, needless to say, if Heal the Boy is a for-profit, donations wouldn’t be tax deductible in the U.S.

Nor could I find any mention of Heal the Boy on the Montblanc website or the Nicolas Cage fansites. Montblanc requires that journalists register with them first before they can gain access to press materials. But more than 48 hours has passed since I registered without any word from Montblanc.

I’m prepared to praise the straightforward creative of the ad. I’m anxious to issue kudos to Montblanc, a luxury brand that features cause-related marketing as a key component of their marketing strategy. But I can’t. I can’t because The Wicker Man’s cause needs to be more transparent.

Crystal Geyser Label II

Remember What You're Paying for This Free Advice

All right, you’ve had your fun, you say. You’ve teased the folks at Crystal Geyser with yesterday's posting, so what would you do if your water was being sold in the discounter stores for pennies, Mr. Smart Guy?

I’m glad you asked. First, a disclaimer. I’ve never worked for Crystal Geyser or any of its competitors, although I did put myself through school working at a local Coca-Cola bottler. But this was before the days of Dasani.

I’ll also say that I have no special knowledge of the bottled water industry and I don’t know anything specific about how they target their markets.

However, if my brand had lost so much traction that I felt obliged to sell my products at Big Lots, I would take that as a sign that it was time to rethink my brand.

I hereby offer four ‘strategeries’ for rehydrating the Crystal Geyser brand, free of charge. It’s my pleasure. After all you’ve given me an awful lot of budget-priced water.

Really embrace the cause. Unless the relationship is not working, a five-year deal with America Forests is silly. Make it an ongoing relationship, and make American Forests a part of the Crystal Geyser culture the way City Year is with Timberland. Or, like Yoplait and Susan G. Komen.

Also, the pledge to plant 50,000 trees a year has no meaning. I couldn’t find any mention on either the Crystal Geyser or American Forests website of how much carbon dioxide those 250,000 trees will soak up now or over time. Or, how much erosion those trees will prevent. Why is that kind information so conspicuously absent?

Tie the number of trees planted to something specific and meaningful. For instance, you could figure out how much carbon monoxide is released from the company trucks each year and plant enough trees to obviate that. Add in the carbon monoxide from all the vehicles your employees drive, too. Or, you could figure out how much groundwater is recharged thanks to the anti-erosion power of the trees you’re planting. Those kinds of numbers are definitely promotable and could help you step away from your competitors.

Go guerilla and drag American Forests along with you. Remember that plot of land in Los Angeles that was being reclaimed from inner-city gardeneners by its owner? Every enviro-actor within a 100 miles of LA was all over that. Imagine if one night you during the course of the hubbub if you and your buddies from American Forests climbed the fence and planted five fruit or nut trees or 20 or 100, took pictures, then issued a smart-aleck press release about it the next morning.

Get into events and tie it all back to the cause. The great advantage of events is that they can directly influence sales. Find something that caters to active people. You could go the elite athlete route with the Ironman or something like that. But that’s probably out of your price range. Instead pick something like the Wasatch Back Relay or its sister races, the Del Sol or the Great River Relay. As a condition of sponsorship you could ask that the relay teams do some tree-planting along the race route. My friends Dan Hill and Tanner Bell at Ragnar Relay have more races in the works, but the three they have are a terrific start. Contact them at: dan@ragnarrelay.com and tanner@ragnarrelay.com.

Reposition with a radical repackaging. This is last and the most radical strategery. But it could also promises the greatest payoff. Be the first major water bottler to switch to a plant-based plastic that biodegrades. How much more would each bottle cost? Even if it was 10 cents more per bottle than Crystal Geyser is paying now, they could certainly charge 50 cents more per bottle.

Waste disposal is already a monstrous issue in this country. And packaging something that already comes out of most people's taps and then shipping it hundreds of miles away so that it can clog someone else’s landfill is the elephant in the living room.

Moreover, I’m beginning to hear whispers that maybe water in petro-plastics isn’t such a good idea because they may leach potentially harmful chemicals. Maybe that won't prove to be the case, but no matter. Take the high road and sell your water in containers that won’t outlast the cockroaches.

Now, maybe the science isn’t there yet. Or maybe the water in a biodegradable bottle would have only a shelf-life of months, not the years and years of petro-plastics. If so, learn a lesson from the salty snack folks who initially bemoaned the switch away from trans-fats because it would shorten shelf-life. Hello! As a consumer I don’t want to eat ‘Cheese Spoodles’ that will stay “fresh” until the Cubs finally win the pennant. Now that the major salty snack manufacturers have all switched from trans-fats, I haven’t heard any more complaints. Could it be that the shorter shelf life forces more inventory turns?

That's it. Just remember what you're paying for this free advice.

Crystal Geyser Label

Buck Up, Guys!

Some day I'm going to write the ultimate case study of the greatest cause-related marketing campaign ever. It raised hundreds of millions of dollars for a terrific cause and it went on for years with no fall-off in support. It generated tons of positive publicity and, if you're an American, chances are you physically handled it more than once. The most intriguing part of that campaign, however, was that it raised money by charging more money for the product.

Imagine that!

(Email me at aldenkeene@gmail.com if you want to know what the campaign was).

But I'm not reviewing that campaign today. Instead I'm reviewing a cause-related marketing campaign by Crystal Geyser, the bottled water people. Their chief selling point is that their water is bottled at the source, not trucked to a distant bottling plant.

Their cause campaign is a tree-planting program in conjunction with the American Forests, which has several of these kinds of relationships. Crystal Geyser will fund the planting of 50,000 trees a year over the course of five years for a grand total of 250,000 trees.

I don't know how much this costs Crystal Geyser, but since American Forests reported $3 million in gross receipts on their 2005 990, and $900,000 in direct public support, it's probably not a high-dollar deal. In fact, American Forests asks only a $1 a tree from the public. I'm sure they have also have "wholesale" prices for large donors.

Why does this matter? Well, I bought two 1.5 liter bottles of Crystal Water Natural Alpine Spring Water for $1 (sell by date: 06/14/08) at the discounter chain Big Lots.

$1 for three liters!

Among the advantages of cause-related marketing is that it's supposed to keep you out of the discounter stores. It supposed to help preserve your pricing power.

Now it could be that those suppositions are false. But I think it's equally likely Crystal Geyser doesn't have the right cause, or the right campaign, or the faith in themselves as marketers.

By gum, buck up guys.

You are, after all, selling something that anyone could get out of a tap!