[ Login ]   [ Register ]

Feel-Good Marketing

Aaron Kremer March 27, 2008 0

Cause-related marketing, as the marketing technique is known, owes its origins to an American Express program from the 1980s, when the credit card company donated funds to help restore the Statue of Liberty. In years since, the marketing style has become an increasingly popular tool for companies to create a positive association among potential customers.

Throughout Richmond last week, waiters at 71 area eateries added another question to their table-side routines: “Would you like to donate a dollar with that glass of water?”The blunt requests weren’t part of an industry-wide attempt to prop up bottom lines, but rather part of a week-long fundraiser dubbed “The Tap Project” aimed at raising funds for sanitary-water projects around the world.

The graduate students from the VCU BrandCenter that organized the local initiative set out to get 250 restaurants to solicit $1 donations for water. Some area restaurants were hesitant to try something new, said Ari Ratner, one of the fundraiser organizers, but those that signed up saw it as an opportunity to bring in some new customers, not to mention to help thirsty kids in poor nations.

“By partnering with the Tap Project, it allows us to communicate that your restaurant is participating,” Ratner said of the event. “In turn, it was our hope that the effort will drive more patrons to your restaurant because it’s a good cause and a simple cause.”

Leveraging a good cause for corporate goodwill is rather common. If you happened through the dairy aisle late last year, chances are you noticed Yoplait’s Save Lids to Save Lives program.

The campaign, which donated 10 cents to a breast cancer research foundation for every pink foil lid returned to the yogurt company, is one of the better-known examples in recent years of attaching goodwill to product consumption. Maybe you even bought the tasty yogurt at Ukrop’s and then designated a percentage of your sales go to a favorite charity via the Golden Gift program, in which Ukrop’s divvies up to $400,000 for local charities.

Cause-related marketing, as the marketing technique is known, owes its origins to an American Express program from the 1980s, when the credit card company donated funds to help restore the Statue of Liberty. In years since, the marketing style has become an increasingly popular tool for companies to create a positive association among potential customers.

Does it work? According to Michael Guld, a Richmond consultant who helped Midas of Richmond partner with Central Virginia Blood Services and the Central Virginia Food Bank, it does.

“Research shows that more and more people like to patronize businesses that do good if the product and services are comparable (to other products or services in the same market),” he said.

Businesses can elevate their standing in the community by finding the right charity partner, Guld said, adding that in a competitive marketplace an image boost can help one company stand out above competitors. Mark Smith, the owner of Richmond Midas, said the partnerships helped him earn new customers.

From sponsoring little league teams (with the company’s name on the back of the jerseys, of course) to bowl-a-thons (how does that dollar-for-every-pin math work again?) the union of business and community is nothing new. Obviously business owners live in communities and want to uphold a certain public image. And a partnership can be a win-win for both parties. The charity gets money, volunteers, goods (cans, blood, gently used coats…) and more exposure for the cause. The business can derive more businesses from socially conscious consumers. A boosted standing in the community might also help recruit and retain workers.

David Urban, a marketing professor at VCU, said consumers increasingly want to do business with organizations that are socially responsible, and that companies can improve business by being perceived as active members of the local community.

Some large corporations say the method is helpful for increasing brand awareness among potential customers who might benefit from a charity’s mission. For example, donating food in third-world countries might create demand when those people are less poor.

To some degree, individual businesses are taking over community service responsibilities from civic groups. Large companies used to encourage or require their employees to get involved with organizations like Rotary, Kiwanis or the Shriners, Urban said. But membership at local Richmond chapters of these organizations is down, said Urban, a Rotary Club member. “As a substitute, companies have started thinking that they get a greater benefit and potentially more impact and image-enhancement by involving their employees directly with charities,” he said.

“A lot of times companies utilize these alignments with charities or non-profit groups as a way to improve the organizational climate within a company by getting large groups of employees involved in something that’s for the common good,” Urban added.

How cause-related marketing plays out in the world of small business is debatable. Some small business owners use charity dinners as ways to network in less formal settings and with potentially like-minded business owners. But the effect on the bottom line is hard to measure. Most surveys and statistics about cause-related marketing report that the community involvement of a company contributes to customers’ buying decisions only when price and quality are equal. That means that, as consumers and companies tighten their belts, cause-related will likely become less effective.

And while sponsoring a cause sometimes doesn’t even cost a dime, as was the case with the Tap Project, it’s not risk-free. Some consumers might view such associations as flimsy PR stunts. Furthermore, companies don’t necessarily engender goodwill by the asking customers to donate to a selected cause. Many customers bristle when a company tells them how to donate their money, especially when the exchange takes place at the cash register.

Some restaurants that participated in the Tap Project were hesitant to ask diners if they wanted to donate. People go out to eat, after all, to get away from their troubles and might not want to think about starving kids before ordering a steak. More effective might be donating company funds or matching customers’ donation. Also popular is giving customers a choice of where the money goes, Urban said.

Companies must also be wary of bogus charities (aka the Human Fund from Seinfeld) or charities that carry ideological leanings.

“If you’re smart, an organization will try to align itself with charities that have views most people don’t consider controversial,” Urban said.

Kudos to Yoplait on that front.

Print Friendly and PDF

Editor's Picks

Leave A Response »

Please use your real, full name (first and last) and a valid email address to foster a more civil discussion. Comments without first and last name may not be approved.


We encourage active participation in our online community, but we reserve the right to remove any off topic or inappropriate comments.