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How Chili’s Used Cause-Related Marketing to Raise $8.2 Million for St. Jude, Part I

[Blogger’s note: This is the first of a two-part post on Chili’s Create a Pepper promotion benefiting St. Jude Children’s Research Hospital. The campaign is notable because it has grown approximately 400 percent since going national in 2004. How did they do it? Read on.]

The casual dining category of chain restaurants have been death for many cause-related marketing campaigns.

You can guess why.

  • The chains are national, but there aren’t many charities with sufficient affinity to span the nation.
  • The employee turnover rate among restaurants tends to be quite high, making continuity challenging.
  • The patrons of the big chains aren’t particularly loyal. Not too many people head to their local Applebees four times a week. [Although I did hear Jim Cramer, the voluble (and volatile) TV stock picker, say that he loves to eat at Olive Garden].

And I would add that too many charities that have sold in a cause-related marketing campaign to a casual dining chain have not brought much creativity to the deal. Too often it’s just been a square paper icon campaign roughly folded to fit the round hole of the chain.

To my knowledge, there hadn’t really been a breakout performer in the category until last year when Chili’s raised $8.2 million for St. Jude Children’s Research Hospital in a multifaceted campaign. That’s an increase of more than 150 percent over the 2006 campaign, which generated $5.2 million

This from a campaign that has only been national since 2004 and a relationship that dates to just 2002. In those 5 years, Chili’s has donated more than $18.7 million to St. Jude. In fact, since going national the Chili’s campaign has never generated less than $2 million a year!

Now St Jude has a powerful national brand, a talented and energetic fundraising staff, and has long been a force in cause-related marketing. But even for them $2 million a year is a significant amount of money. So to cross the $8 million-a-year mark so quickly is a break-out-the-champagne kind of achievement.

How’d St. Jude do it? I put that question to Amy Morris, Director of Corporate Relations at St. Jude with responsibility for the relationship with Chili’s.

“Chili’s just gets it,” Amy said, “it’s an amazing brand and a true partnership. We stay in regular contact… we meet on a weekly basis. And both parties are always thinking about what else we could do to make it better.”

Here are the elements for the September 2007 effort:
  • The campaign’s ‘hook’ is National Childhood Cancer Awareness Month, which takes place in September.
  • Chili’s employees encourage patrons to donate $1 to color a paper icon in the shape of the chain’s iconic chili. There are then displayed in the store. The paper icons are called “Create-a-Pepper.”
  • Servers, bartenders and hosts raise money selling customizable t-shirts and wristbands. Order taking and fulfillment are accomplished on the campaign’s website, Chili’s built the site and hosts it on their servers.
  • On the last Monday in September, Chili's donated all profits from its sales that day to St. Jude.
  • St. Jude-branded gift cards at Chili’s denominated in the amounts of $25 or more generate a $1 donation to the hospital.
  • Meanwhile, in 2006 St. Jude presented an opportunity for Chili’s to pledge $50 million over a 10-year period to help fund advanced diagnostic imaging. Chili’s accepted and St. Jude’s state-of-the-art Chili’s Care Center houses the Department of Radiological Sciences, the Pediatric Brain Tumor Consortium and other facilities.

On Thursday: How Chili's and St. Jude motivate support from frontline employees and management.


Anonymous said…
Great case study, Paul! Question: do you know what the breakout is for revenue generated outside of paper icons? Was the revenue generated from gift cards and apparel significant? Joe

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