Special Markets
Cause-Related Marketing Makes You The Customer’s Choice
By Philip Holmes

• 76% of consumers say when price and quality are equal, they’re likely to switch to brands or retailers associated with CRM. 
• Only 21% of respondents are skeptical of a firm’s motives for participating in CRM.
• Most receptive to CRM: women ages 18-49 (84%) and parents of young children (81%).
• 59% of respondents want sponsors to focus on improving the quality of life locally rather than nationally (26%) or globally (9%).
• Issues respondents think sponsors should focus on: crime (41%), environment (35%), education (35%) and poverty (24%). 

Marketing By Core Values

CRM takes several forms, including special events, promotions, percentage contributions, and product donations. It differs from traditional corporate charity; basic contributions typically come from a contributions department or company foundation. CRM funds are generally from the marketing or ad budget.

Corporations began giving more thought to CRM in the 1980s, when government cutbacks sent nonprofits in search of more aid. Firms saw it was in their best interest to help ensure their communities have a strong economy, educated populace, low crime rate and a low incidence of poverty/disease. 

CRM also plays a key role in marketing. “In the minds of consumers, there’s little difference between brands today,” says Stan Friedman, managing partner of WorldCom, a firm that creates alliances between corporations and nonprofits. “Twenty-first century brand success will be based on marketing by core values – the beliefs that govern a company.”

Promotional Products Promote Peace

The Minnesota Office of Drug Policy & Violence Prevention recently launched an anti-violence campaign using the slogan, “You’re the One Who Can Make The Peace.” Imprinted products were included in educational “tool kits” mailed to school superintendents, social workers and school nurses. For added exposure, kits went to two or three people at some schools. All told, 20,000 were sent out. Each contained buttons, posters, banners, keytags, bookmarks and brochures, imprinted with the campaign logo. T-shirts were also used, but were printed in smaller quantities and distributed more judiciously. 

A study on the campaign’s effectiveness estimated that its message received over 910 million impressions. Respondents were very aware of the campaign; 90% had seen or heard the media messages, and 73% used the materials in their work settings, personal lives or communities. People reported more community awareness and discussion of violence prevention and that teens appreciated the style and substance of the campaign. 

“I think to have the kind of impact we had with our budget is remarkable,” says a member of the marketing team responsible for putting together the promotion. “There’s some clear indications people are seeing the campaign, remembering the campaign and using [it] on a day-to-day basis.”
 
How To Do It Right

A major difference between CRM and other promotional programs is the tight link with the sponsoring firm’s reputation. Managing a program well can have broad benefits; botching it can cause long-term damage.

But there are ways to do it right. First, be honest about your motives. Acknowledge that you’re participating to help your firm as well as the cause. Your customers are smart enough to see through any pretense.

Seek a cause that’s a sensible match for you. If a cause is inappropriate (e.g., a tobacco company supporting a youth group) or not associated with what your com-pany does, it won’t be believable.
Third, find out what causes are important to your employees. Where do they donate money or volunteer time? Not only will this help you make a choice, but will strengthen employee support. Another option: Find out what matters to your customers. 

Investigate potential partners. Be sure an organization puts a substantial percentage of its revenue into programs and services rather than promotion and fund raising. Study its annual report and tax return. Patricia F. Lewis, president of the National Society of Fund Raising Executives, adds “Notice the quality of the staff. Be sure there is a strong governing board and established policies.” Investigate local chapters separately.

Set measurable, comprehensive objectives. If you plan to donate, assign a numerical value to your goals. For example, is your objective a dollar increase or percentage increase in sales? You can have more than one goal. Set goals as you would for any PR campaign.

Spell out the agreement in detail. This is a relationship in which both parties have rights, obligations, and expectations. Four key areas that should be clarified: Who’s authorized to approve the agreement? Who will approve ad copy? Who has a say in how the funds given to the nonprofit will be distributed? Will the sponsor firm have access to any lists? 

Clarify competitive restrictions. If you’re a coat manufacturer planning an agreement with a homeless shelter, you would presumably want to be the only coat firm the organization is allied with. If so, put it in the agreement, which should also spell out the conditions under which either party can terminate the relationship and both parties’ obligations are in such a situation. Have an attorney and accountant review the terms.

Think long-term. Some CRM programs are one-time or short-term. Example: the 1985 Live Aid concerts to benefit African Famine Relief. But some programs extend over several years, and sponsors should expect to make a commitment. Withdrawing support without a compelling reason can do irreparable damage to your reputation. 

Monitor and evaluate CRM just as you would any ad or promotion program. Did you achieve your objectives? Did sales rise? Did your customer base increase? Did you accomplish what you wanted to? Did you get media mentions? 

A Caveat

Again, it’s important to remember that inadequate preparation and management of a CRM program can tarnish the nonprofit, the sponsor, or both. A prime example is the aborted pact between the American Medical Association (AMA) and Sunbeam Corp. 

In summer 1997, the AMA agreed to endorse nine products in Sunbeam’s “Health at Home” line, including blood-pressure monitors and thermometers. In return, Sunbeam would pay a percentage of sales to the AMA in the form of royalties — which, analysts say might have reached millions of dollars — for its research and education programs. For Sunbeam, the AMA seal of approval would provide a competitive advantage that could significantly boost sales.

But there was an immediate outcry from both consumer groups and medical professionals. The former questioned whether the AMA would honestly evaluate the efficacy of products. They were 
also uncomfortable with it encouraging consumers to buy products that might be more costly, but not necessarily better, than competitive products. A New York Times article quoted Paul Davis Jones, a principal of IDPR Group, a consultant to nonprofits, as saying, “The ordinary consumer may see the AMA name on a product and interpret that Sunbeam is a philanthropic donor, instead of a participant in a marketing deal.” 

Others suggested the AMA would be violating its own code of ethics by in effect recommending a product in which it had a financial interest.

Within days of announcing the deal, the chairman of AMA’s board of trustees revoked it, saying the board had not approved it. Sunbeam’s chairman responded by suing the AMA for breach of contract. Sunbeam apparently escaped without damage to its reputation, but lost out on a great opportunity for CRM because someone neglected to do due diligence.

And if anything bears repeating yet again, cause marketing can do great things for you and whom-ever you sponsor. But it must be done correctly. 

Philip Holmes is a freelance writer and marketing professional based in Los Angeles.