Cause Marketing to Build Customer Loyalty

Suppose you face a fiercely competitive consumer-facing marketplace that was once a served by a regulated monopoly. How would you compete?

In the deregulated Georgia natural gas market, one company is using cause marketing.

In 1997 the Georgia Public Service Commission deregulated the natural gas market. The former monopoly, Atlanta Gas Light Company now provides only the pipes. The price of gas is no longer determined by regulators but by the market. The State has certified 11 natural gas marketers to sell to and service the market.

Not surprisingly those 11 compete on price, rebates, add-ons, promotions, and customer service. That’s because the gas is exactly the same no matter who markets it. And the delivery of the gas is still handled by Atlanta Gas Light Company, no matter who markets it.

My many astute readers are probably asking where the money comes from for the marketers to be so aggressive. The answer is that there’s a monthly access fee of about $45 apart from the cost of gas.

To this outsider it doesn’t look very different than the satellite TV market, which is delivered by Dish and DirectTV, but sold by numerous independent local marketers.

That kind of competition can be a kind of a merry-go-round. The customers churn a lot. They chase bargains. They’re literally being paid not to be loyal.

One of these Georgia gas marketers… Fireside Natural Gas… is trying to get off the merry-go-round with a cause marketing approach. From February 21 to February 28, 2011, Firesides’ Facebook page accepted nominations for one charity to receive $1,000 donation. From March 1 to March 15, 2011, Fireside wants you to friend them and vote on one the nominees.

I like the idea of Fireside using cause marketing to build loyalty. But there’s almost nothing in the way they’ve approached it that’s likely to build loyalty, including the paltry donation amount.

My hope is that Fireside will keep at it long enough to either figure out a more effective approach, or that they hire some professional help.

Tip of the hat to Kate L.

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