Dan Fink, editor of the Reading-Eagle Business Weekly in Pennsylvania, called me recently for some national perspective quotes on a story his staff was preparing on a local cause marketing effort. Many of his readers are small businesses, so I was especially happy to be able to reach out to that audience with the message about the power of cause marketing. Dan’s questions are in bold and my answers follow in italics.
Do you have any numbers that show growth trends?
The keeper of long-term cause marketing growth data is IEG, in Chicago. They track all sponsorship dollars, for instance the NFL and music festivals. IEG considers cause marketing to be a subset of sponsorship. This is a link to a projection they released in January. It lists only their projection for 2012, but they've been releasing this report for more than 20 years. So they can give a sense of long-term cause marketing trends.
Who are the biggest users of cause marketing (in terms of dollars given to nonprofits)?
This is a terrific question. I wish I had a terrific answer. But I've never seen this kind of number published. Here's some 'thinking out loud' on the issue. As I wrote in 2010, Kohl's Cares for Kids crossed the $180 million total mark in just 10 years, for an average of $18 million a year. MAC Viva Glam is up to more than $225 million since 1994. Newman's Own is north of $300 million since 1982. Geoffrey Beene is above $150 million. Target gives 2% back to the community, which they say totals $4 million a week. But that money isn't cause marketing, per se.
I spent many years working for the Children's Miracle Network Hospitals (CMNH), whose biggest sponsor is WalMart. I left CMNH in 1999, but even then WalMart's sponsorship was worth more than $23 million a year. I'm not privy to the 2012 number, but this says that WalMart gave $27 million to CMNH in 2010 and $530 million from 1987 to 2010. St. Jude Children's Research Hospital has some big cause marketing sponsors. Same with Susan G. Komen for the Cure and some of the prominent single-disease charities (Heart Association, Cancer Society, etc) raise a lot of money via cause marketing. And by big I mean more than $10 million a year from a single sponsor. But I suspect no one raises more money via cause marketing than WalMart does for Children's Miracle Network Hospitals.
How useful is this for small independent businesses looking to attract customers?
When you see number like $10 million bandied about, a small business may feel out of its depth. But I think small businesses, especially those that face the consumer, probably have more to gain than do big businesses from engaging in cause marketing. That's because if you're a big retailer, a large restaurant chain, or a consumer packaged goods company, the expectation is that you'll do some kind of cause marketing is baked in. That is, cause marketing is expected of the McDonald's and General Mills and Chili's of the world. But the same expectations don't exist for small businesses. There is one place where the expectations for small businesses may be quite high, however, and that's from its own employees. especially if they're Millennials. And, while there are many benefits to cause marketing for a small business, including sales boosts, the best reasons may have to do with what cause marketing can do for corporate cultures, morale and teamwork.
Any pitfalls to avoid?
Don't pick a charity that's a poor strategic fit. There's a lot of potential reasons for why a small business might undertake a cause marketing campaign for a cause. Maybe their customers are school-age kids so they pick a local school. A restaurant might choose a hunger cause. But if you're a local welding shop, you better have a pretty good reason to support Susan G. Komen Breast for the Cure; a reason your customers will easily and quickly understand. That's because research clearly demonstrates that both parties get the most bang for the buck when there's a clear strategic fit between them.
Give the cause marketing campaign enough support. Times are tough right now and the first impulse of plenty of businesses is to retrench. But if you're going to do a cause marketing campaign you need to give it proper resources. Transactional cause marketing (buy this and $x goes to the cause) is a promotion. And like any promotion it requires an appropriate amount of support, and I'm not talking just about money. There are ways to activate a cause marketing campaign using low-cost guerrilla marketing tactics. But even low-cost efforts require a commitment of time and mental energy.
If you're in the B2B space be very careful before you try cause marketing. While I see plenty of what I call 'B2B cause marketing,' research suggests that companies that advertise are the ones most likely to benefit in terms of increased profitability from a cause marketing campaign. If you run a small cabinet-making operation that doesn't advertise, cause marketing isn't likely to help make your company more profitable. However, if you run a salsa-making enterprise that does advertise, it certainly can help.
Don't pick a charity that's too big to be helpful. As I showed, the biggest charities doing cause marketing bring in several hundred million dollars a year using just cause marketing. They run dozens of cause marketing campaigns a year using hundreds of staffers and volunteers. Some (but not all) won't be able to offer the kind of recognition or help with a cause marketing campaign that a small business might want or need. Now some small businesses might be OK being a minnow in a big lake. But small business owners that aren't OK with that should probably choose to support smaller charities.