On my blog I define cause marketing as a relationship that bridges commerce and cause in a way that benefits both parties.How did it start?
How it specifically works depends on the flavor of cause marketing that we’re talking about. But in general cause marketing plays upon the social psychology concepts of reciprocity and social proof.
Cause marketing is usually dated from 1983 when American Express ran a campaign meant to increase the number of American Express card holders and transactions, while raising money for the restoration of the Statue of Liberty. The campaign accomplished all three.How does cause marketing differ from corporate philanthropy?
The term “cause-related marketing” was coined by an American Express executive named Jerry Welsh. Later Welsh trademarked the term, which, so far as I know, American Express still owns, although the company generously allows anyone to use it.
In fact, American Express had been doing regional cause marketing efforts in places like Chicago and Dallas. Another pioneer, Bruce Burtch, did some early cause marketing efforts in and around San Francisco in the late 1970s.
You can actually go back much further still to the original installation of the Statue of Liberty. In January 1885 the Statue of Liberty was laying around New York City warehouses, still in pieces because the money to build the pedestal had run out. To give the fundraising a shot in the arm, Joseph Pulitzer, the newspaper publisher, offered to print the name of everyone who donated even a penny toward the cause. The money poured in and construction on the pedestal resumed in August 1885 and was completed in April 1886.
You can probably go back at least another 100 years. I’ve never looked at it closely, but wouldn’t be surprised to learn that the nation’s first fire department, championed by Ben Franklin, had some proto-cause marketing aspects to it.
Let me say first that I don’t think this should be an either/or proposition. Responsible companies ought to do both.Why is cause marketing gaining in popularity?
As far as differences go, cause marketing is more promotional than corporate philanthropy. And there’s more of a sense of a partnership and mutual benefit.
Corporate philanthropy tends to be run out a company’s foundation while cause marketing is usually run out of a company’s marketing department. It seems like a small distinction, but it’s not.
By tying cause marketing to the marketing function it ends up being more of a business partnership among equals than a charity with their hat in their hands. Plus there are goals and objectives in a cause marketing promotion that are mostly absent in corporate philanthropy.
There’s a few more differences. The funds generated in cause marketing efforts frequently come from consumers directly, so what a company is giving, fundamentally, is access to its customers. Because of the democratic way the funds are generated they represent unrestricted money for the cause, which is very valuable to causes. Cause marketing is generally done by companies that face consumers.
Also, there are some practical limits to number of causes a single company could do cause marketing with. But a well-funded corporate foundation might mail checks to hundreds of charities a year.
Finally, a well-conceived and well-executed cause marketing campaign can generate millions of dollars in a year. By contrast, the only corporate foundations with the wherewithal to grant $1 million in the same year are almost certainly associated with Fortune 500 level companies.
The short answer is the consumer. The modern consumer zeitgeist is that companies ought to be involved in the important causes of the day. Since the balance of power has shifted from companies to consumers over the last decade or so, companies have little choice except to meet their customer’s expectations and engage in cause marketing. And it’s a virtuous cycle. Studies show that even with all the cause marketing we see today, the public expects more.What are the benefits of cause marketing for the sponsors and the charity?
There are basically five benefits for sponsors: 1). Cause marketing can directly enhance sponsor sales and brand. 2). Cause marketing can heighten customer loyalty. 3). Cause marketing can boost a company's public image and helps distinguish it from the competition. I would add that it can also give corporate PR officers a new story to tell. 4). Cause marketing can help build employee morale and loyalty. 5). Cause marketing can improve employee productivity, skills and teamwork.What are some characteristics of good cause marketing campaigns – and bad ones?
For causes the practice offers several benefits as well: 1). Unrestricted dollars. 2). Branding paid for by someone else. 3). Positive association with better known brands.
Good cause marketing has several earmarks. The promotion can be easily understood. The relationship between the sponsor and the cause makes some kind of logical sense. The promotion is transparent and open. And they communicate throughout. Not just when they start. The best have a little something extra in the promotion that compels people to participate. I borrowed film director Alfred Hitchcock’s word and call it a McGuffin, or an element that makes people want to act.
I do an annual best and worst cause marketing list on my blog which is very popular. Campaigns end up on the ‘worst’ list because they lack transparency, they use bad judgment, are dishonest, overly-complicated, obtuse, or there’s just something weasely about them.
Labels: Best Cause Marketing, Cause Marketing for Dummies, Cause Marketing Forum, David Hessekiel, Joe Waters, Worst Cause Marketing, Yogi Berra