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Cause-Related Marketing

Being perceived as a good friend and neighbor has always been important for the business community. Business charity used to be called “good will”; today it’s called cause-related marketing—and it works. Customers have come to expect businesses to assume the role of good corporate citizen and to do their part in creating a better world.

Cause-related marketing, which generates more than a billion dollars a year in corporate marketing dollars, is different from simple corporate donations. It is a sophisticated business strategy whereby the business aligns itself with a nonprofit organization in order to gain profit for the business, funding for the nonprofit, and exposure for both.

Cause-related marketing took off in 1983 when American Express promised to make a donation to the Statue of Liberty fund every time the card was used. Retailers and other businesses took note of the success of this strategy and over the years learned how to put their own altruistic spin on their sales pitch. They realized that participating in philanthropic causes had become fashionable—and profitable.

Another early example: in 1991 Thrifty Car Rentals tested a 10% savings to senior citizens who rented from them. Only 11% of older adult car renters said that the savings would be a major motivation for selecting Thrifty. However, when they said in a later test that the company would give a portion of the rental charges to buy vans for senior centers, 40% said that such a program would make them choose Thrifty. Suddenly, Thrifty Car Rental was the good guy wearing the white hat.
Studies have shown that consumer concern with corporate social responsibility is at a 10-year high and that 89% of Americans say it is more important than ever for companies to be socially responsible. Studies have also found that consumers are willing to use their power to punish companies that do not share their values by

• Considering switching to another company’s products or services (91%)
• Speaking out against that company to family and friends (85%)
• Refusing to invest in that company’s stock (83%)
• Refusing to work at that company (80%)
• Boycotting that company’s products or services (76%)
• Being less loyal to my job at that company (68%)

The Feel Good Factor
Face it…shopping, for the most part, is a self-indulgent activity. If that self-indulgence can be balanced with fuzzy feelings of contributing to a cause, your customers are not only more likely to shop your store, they will feel good about the purchases they make. And when their cranky husbands complain about the new dress they just purchased, they can always say, “But a portion of the proceeds benefits little Timmy’s school music program.”

The demographic group most responsive to cause-related marketing are middle-age, college-educated, married persons with children living at home in an income bracket of $50,000 or higher. Doesn’t that person sound like one of your most desirable customers? Doesn’t he or she fit your target customer plan?
Baby boomers, that demographic group that marketers and retailers have been chasing for so many years now, are particularly open to cause-related concerns. They are getting older. Burnt out on their careers, they are more focused on spiritual and family concerns, looking for meaning, not just more money, and shifting their life focus from success to significance. They want to believe again, as they did in their youth, that one person can make a positive difference. These shoppers tend to be rooted and active in their communities and churches. They respond to the win-win situation of spending while giving.

Your customers have a vested interest in supporting local schools, senior centers, day-care centers, and medical research. If you link your store and your products to the support of worthy causes such as these, your customers will buy from you. They will feel a sense of goodwill and personal accomplishment when they spend their hard-earned dollars with a business that supports and sponsors the causes they believe in.

Connecting Your Marketing Efforts to a Worthy Cause

So how can you connect your store’s name to a cause or charity that your customers will respond to?

• Evaluate how you are currently perceived by your target market. How community conscious do your ideal customers think you are, and how did they arrive at that perception? For example, did every apparel store in town support the local Walk for the Cure except yours?
• Identify the causes that are important to your customers. Supporting just any cause is not enough; you need to invest in a cause that matters to your customers.
• Support a cause that relates to your store. For example, if you owned a golf course, you might host a “Swing for the Cure” golf tournament. If you own a gift shop or a clothing store, you might consider a style show, a fashion event, a woman’s workshop, or a girl’s night out event.