Cause Marketing

When you buy a Target gift card worth $20 or more through December 4, the stylish discount retailer will donate $1 to St Jude Children’s Research Hospital up to $750,000. Since gift cards are basically stored-value cards and discount retailing has pretty thin margins, how could Target possibly afford to shed $1 out of every $20, even if it’s promotionally-appropriate given Target’s pledge to give 5% of income to charity? There are a couple of answers. First of all, this is a limited time offer, valid only November 28, 2010 through December 4, 2010, which is fitting since fully 35 percent of all gift cards are sold in November and December. But all that means is that Target is limiting its exposure, not that it’s necessarily making a sound business decision. The true answer has to do with the psychology of gift cards, which most of us treat like found money. If you go to Target and the Garmin Nuvi GPS you've had your eye is $99 and you’ve got $80 in Target gift cards, the extra $19...

Plus 3 Network wants to turn your “sweat equity into social capital,” and they’re using a non transactional form of cause marketing to do it. Here’s what that means: You register at Plus 3, a kind of social media network, and then keep an online log of all your workouts. Each mile you train… mainly running, walking and biking… translates to a small donation paid for by sponsors to a select group of charities. Certain training activities are also awarded with prizes or rewards like chain lube or training socks. So you get fitter and maybe some new socks, the sponsor gets the usual benefits of cause marketing and the charity gets a donation. Of course, Plus 3 gets something out of it too. It’s a cause marketing triple play. The donations are higher when you upload the data from a GPS enabled device than if you make a hand entry. For instance, walking pays out $.05 a mile when uploaded from Garmin GPS device, but just $.0167 when you hand enter the data. Plus 3 says this is because the...