Out of the Box

Cause Marketing

By Menachem Lubinsky on June 01 2007

Americans by the millions are buying products because a percentage of the sale price is earmarked for charity. You can buy almost any product and feel good that you are also helping fund research to find a cure for a dreadful disease, feeding the poor, saving the environment, or sending children to camp. Some products are even color-coded to help you identify those that are part of the promotion. Marketers seem to finally have come up with a term that helps them categorize this type of marketing: “Cause Marketing”.

When you take a closer look at cause marketing, it explains why it has so rapidly become a multi-billion dollar industry. From the consumer’s point of view, it fits so neatly into their value system. They are buying a product which fulfills a need and are participating in a charitable cause, which is consistent with their values. In fact, they even feel good about the company that manufactures or distributes the product in that it isn’t all about profits. What can be better?

From the company’s point of view, making their customer feel good about them is what it is all about. It translates into increased sales and even though they are diluting their margins a bit, they hope to more than make it up from increased volume. And there’s more.

The evidence shows that participating in a cause gives companies a remarkable competitive edge. When identical products are sold at the same price and even on the same shelf, the one that is identified with the cause always does better. Some companies use their involvement with a cause in their marketing campaigns, so much so that there are those who focus less on the product and more on the cause.

This is precisely a point of some disagreement within the marketing community. Some will say to market the cause participation to death, convinced that the emotion of the cause will forever carry the product. Others disagree by arguing that the customer will ultimately grow tired and revert to the product that has a better quality message. Irrespective of their view, the marketers agree that cause marketing is hot and well worth pursuing.

There is no textbook guide to being involved in cause marketing. Nor is this an industry that is in any way monitored. In most cases, no one will know the difference if the company gave the exact percentage of sales it promised or if it made a token contribution. This is the honor system in a multi-billion dollar industry. Surprisingly I have not heard of a watchdog group or individual who is monitoring or auditing the companies who purport to be involved in cause marketing.

If a textbook were ever written on cause marketing, I would venture to say that it can be a golden opportunity. Suppose a company adopted research for a cure to Lyme disease as its cause. It would naturally become the expert on the disease. Its press releases would constantly feature developments in the fight against Lyme disease. The company president would appear in the media as a strong advocate for the research. He might set an annual goal of how much money is required to commence with successful research and keep measuring the bar of how much was already contributed. There would be the photos of the president presenting the traditional oversized checks to the lead research health care institution and so it would go.

The evidence is clear that those companies that have sustained such an intense effort were more than rewarded for their efforts. They would no doubt tell you that it has helped them reinforce their brand immeasurably and that they chalked up healthy market share.

On the flip side are companies that fall short of my cause marketing textbook. Yes, they are involved but only nominally, perhaps with a note (in small lettering) on the package that a percentage of the profits for this product will be donated for a cause. They might occasionally include their involvement in a paragraph that discusses a product launch. They might even include the cause in their annual report and in other marketing materials. But this is a far cry from our textbook participant.

So if it is so successful, why isn’t everyone into cause marketing? For one, you have to find the right cause that triggers the right response in consumers. Consumers might yawn if your cause was a shelter for animals in the Rocky Mountains. Second, it requires a sound strategic marketing program to execute the special effort and if they are not otherwise marketing savvy, why would they begin here with cause marketing.

I believe that cause marketing will become even more popular in years ahead. More and more companies will revert to a now proven successful means of marketing their products. Like in all marketing, they will require a sound plan that implements the program in a manner that is most productive. I couldn’t help but read about one company that had hooked up with a charity that was later found to be mismanaged. What was particularly disturbing is that the charity had reached out to many other companies before this one and was rejected. It seems that the smart companies were able to sense that this might not be a good partnership for them.

Cause marketing is here to stay. Why? Because it is just such a great combination for a market driven economy with strong values.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.