Skip to main content

Exclusivity and Cause-Related Marketing

On the Horns of a Dilemma

The August issue of Costco’s member magazine, “The Costco Connection,” features a short story about the retailer’s longstanding commitment to children’s hospitals, with a special emphasis on Seattle Children’s Hospital and Medical Center.

Since 1989, the article points out, Costco has raised more than $30 million for Seattle Children’s and an unstated amount for 24 other children’s hospitals in North America.

Now for the rest of the story.

Seattle Children’s Hospital is part of Children’s Miracle Network (CMN), which raises more than $225 million a year on behalf of its 170 affiliated hospitals in the United States and Canada. As CMN proudly points out, most of the best children’s hospitals in North America’s are affiliated with CMN.

One of the things CMN asks of its participating hospitals is that when they land a sponsor which could become a regional or national sponsor that they share. A goodly number of CMN’s largest national sponsors were brought on in exactly that way. And indeed the staff that runs the CMN program for Seattle Children’s Hospital did just that.

But there was snafu. Not long before, Arkansas Children’s Hospital in Little Rock had brought Wal-Mart to CMN. Costco is perhaps the only mass merchant retailer that Wal-Mart has never beaten in the United States and Wal-Mart’s Sam’s Club unit is a fierce (albeit smaller) rival of Costco.

CMN offers sponsors category exclusivity and with both retailers in the same grouping something had to give. The national office of CMN was on the horns of a dilemma. While Costco was an effective fundraiser in Seattle, Costco stores at that time were heavily weighted in the Western U.S. Both retailers were giants, but Wal-Mart was already truly national.

Ultimately CMN went with the bigger giant. It was the right decision in terms of money. Wal-Mart raises roughly $30 million a year for CMN, more than it gives to United Way or anyone else. Wal-Mart is CMN’s largest sponsor by a factor of 4 or 5.

Meanwhile, instead of feeling rebuffed, Costco went right on fundraising for Seattle Children’s and eventually 24 other children’s hospitals in North America, all of which are affiliated with Children’s Miracle Network. I don’t know the exact number, but I estimate that those 24 other children’s hospitals split something north of $5 million a year and perhaps as much as $8 million or more a year.

In other words, Costco is almost certainly among CMN’s top five largest sponsors. It may even be number two!

The result has been some awkward situations. Like perpetually running into the person you seriously dated before you married someone else.
  1. Neither CMN’s U.S. website or press materials list Costco as a sponsor. CMN’s Canadian website lists Costco as a sponsor, but snubs ‘em by not including a link to Costco’s website, a courtesy it extends to every other sponsor.

  2. At CMN’s annual meetings for its affiliated hospitals they conduct fundraising sessions for each sponsor except Costco. The 25 hospitals instead get together independently of Children’s Miracle Network during the annual meeting to share ideas and best practices.

  3. Likewise, during CMN’s annual television show Celebration, Costco is not recognized on the national show. But it is recognized in local markets by the 25 children’s hospitals.

Meanwhile Costco's website says “the United Way and Children’s Miracle Network are important to our charitable giving.”

So if CMN somehow manages to pull in multi-millions from two competitors, why raise the issue?

I raise it because there’s not many Costco’s in this world. CMN is fortunate… lucky even… that Costco does as much as they do for relatively little in return.

More to the point, if you’re just starting to sell sponsorships you need to think very hard about offering exclusivity. The advantage of exclusivity for a nonprofit is that it gives a sponsor assurances that your charity will not approach competitors. The advantage to nonprofits is that you can ask for more money in return.

But use it judiciously.

The fellow in the picture above escaped with a few scrapes and bruises. But exclusivity in cause-related marketing can be like running with the bulls at Pamplona; exciting, thrilling, and life-affirming.

But it can also get gory in a hurry.

Comments

Popular posts from this blog

Cause Marketing: The All Packaging Edition

One way to activate a cause marketing campaign when the sponsor sells a physical product is on the packaging. I started my career in cause marketing on the charity side and I can tell you that back in the day we were thrilled to get a logo on pack of a consumer packaged good (CPG) or even just a mention. Since then, there’s been a welcome evolution of what sponsors are willing and able to do with their packaging in order to activate their cause sponsorships. That said, even today some sponsors don’t seem to have gotten the memo that when it comes to explaining your cause campaign, more really is more, even on something as small as a can or bottle. The savviest sponsors realize that their only guaranteed means of reaching actual customers with a cause marketing message is by putting it on packaging. And the reach and frequency of the media on packaging for certain high-volume CPG items is almost certainly greater than radio, print or outdoor advertising, and, in many cases, TV. More to

Why Even Absurd Cause-Related Marketing Has its Place

Buy a Bikini, Help Cure Cancer New York City (small-d) fashion designer Shoshonna Lonstein Gruss may have one of the more absurd cause-related marketing campaigns I’ve come across lately. When you buy the bikini or girls one-piece swimsuit at Bergdorf-Goodman in New York shown at the left all sales “proceeds” benefit Memorial Sloan-Kettering Cancer Center . Look past the weak ‘ proceeds ’ language, which I always decry, and think for a moment about the incongruities of the sales of swimsuits benefiting the legendary Sloan-Kettering Cancer Center. Cancer has nothing to do swimming or swimsuits or summering in The Hamptons for that matter. And it’s not clear from her website why Shoshanna, the comely lass who once adorned the arm of comedian Jerry Seinfeld, has chosen the esteemed cancer center to bestow her gifts, although a web search shows that she’s supported its events for years. Lesser critics would say that the ridiculousness of it all is a sign that cause-related marketing is

A Clever Cause Marketing Campaign from Snickers and Feeding America

Back in August I bought this cause-marketed Snickers bar during my fourth trip of the day to Home Depot. (Is it even possible to do home repairs and take care of all your needs with just one trip to Home Depot / Lowes ?) Here’s how it works: Snickers is donating the cost of 2.5 million meals to Feeding America, the nation’s leading hunger-relief charity. On the inside of the wrapper is a code. Text that code to 45495… or enter it at snickers.com… and Snickers will donate the cost of one meal to Feeding America, up to one million additional meals. The Feeding America website says that each dollar you donate provides seven meals. So Snickers donation might be something like $500,000. But I like that Snickers quantified its donations in terms of meals made available, rather than dollars. That’s much more concrete. It doesn’t hurt that 3.5 million is a much bigger number than $500,000. I also like the way they structured the donation. By guaranteeing 2.5 million meals, the risk of a poor