The Difference Between Transactional, Transformative Cause Marketing

I've been talking to a lot of people about the difference between transactional cause marketing and transformative cause marketing. I've concluded that I'm not being very clear on the difference and need this post as much as the people who ask me to explain it to them.

I did what I usually do when I don't understand something: I talked to someone smarter than I am. In this case, someone A LOT smarter: Kristian Darigan Merenda, Senior Vice President of Business + Social Purpose at Edelman. Kristian is also one of the four talented women, including my cause marketing "mom" Carol Cone and Jocelyne Daw, who co-authored my favorite book on cause marketing: Breakthrough Nonprofit Branding.

At an airport restaurant in Cleveland between flights she explained the difference to me on two napkins. Unbeknownst to Kristian, she wiped her mouth on the back of one so so I guess I have her DNA if I ever need to clone her. Added bonus.

Here's the back of the napkin explanation.

What is Transactional Cause Marketing?

Transactional cause marketing is a marketing strategy that's defined by:

  • One-off promotions that are generally reactive to opportunities in the marketplace.
  • First generation partnerships that have a short promotional cycle.
  • Single platform programs.
  • Dominance of transactions over relationships to maximize immediate giving.
  • Promotions that aren't central to or defined by the brands of either partner.
  • Primary goal is to raise money and build awareness for the nonprofit partner.
It doesn't sound fabulous, but transactional cause marketing is the norm. I would say that over 90% of the cause marketing programs in the marketplace have the attributes I listed above.

Nevertheless, my experience is that few organizations start a cause marketing program with the sole aim of raising a few bucks and building some general awareness.

There are exceptions.

In 2009, I blogged about the Charles River Conservancy (CRC) and how they stumbled on a pot of cause marketing gold thanks to Absolut Vodka. Absolut has produced several "city" vodkas and in 2009 it chose the CRC to receive a portion of the proceeds from sales of Absolut Boston Vodka (as they had in other cities, most notably New Orleans which received $2 million after Hurricane Katrina).

  • The program was a one-off as Absolut had no plans of continuing its support for CRC. Indeed, their selection of CNC in the first place seemed pretty random.
  • This program was active for just a few months.
  • The major platform was the purchase-triggered donation from vodka sales. Absolut did set up a Wall of Pride of famous Boston sports moments outside the Prudential Center. But beyond CRC reaping the proceeds from this program, the wall had no connection with the nonprofit or water conservation.
  • Absolut led the promotion with the "city" vodka theme, not water conservation.
  • There wasn't much rhyme or reason to Absolut supporting CRC or the Conservancy working with Absolut. This was about a brand giving a cause some money and generating some general awareness for them. Simple.
  • The partnership ended and the promotion didn't spur the CRC to do more cause marketing. However, Absolut has since then done other city vodkas, including Brooklyn. Once again, New York is second to Boston.

This promotion is the very definition of transactional cause marketing.

Most nonprofits have bigger aspirations. Transactional cause marketing is kind of like a career in sales. No one stares up at their parents as a kid and says "I want to sell!" No one goes to college to prepare for the rigors of cold calling and pitching prospects. But a lot of people end up doing just that.

Of course, there's nothing wrong with being in sales - I proudly call my myself a nonprofit salesman - or just doing transactional cause marketing. Being happy and fulfilled with what you're currently doing and making money from it is a good thing. The challenge arises when you decide that your position is holding you back and you really want something more.

In the case of cause marketing, most organizations want to succeed at transformative cause marketing, but are unsure of what that is, how it differs significantly from what they're currently doing or how to achieve it.

What is Transformative Cause Marketing?

Before I tackle transformative cause marketing I want to clarify that I'm still talking about cause marketing, not cause branding or corporate social responsibility. Cause marketing is a tactical activity between a nonprofit and a for-profit and that doesn't change. What does change is the focus, role and purpose of cause marketing.

  • One-off promotions are replaced with strategic signature programs that are proactive, brand-centric and long-term.
  • Multi-platform programs reflect the shift from a transactional to relationship mindset between partners.
  • Raising money and building awareness becomes secondary to an overarching priority: accomplishing the nonprofit's mission.

I've spent most my career doing transactional cause marketing. It seems more common at the local level where I've worked. But that doesn't mean local nonprofits can't do transformative cause marketing. They do all the time. It just doesn't get the press the big national programs get.

One moment of transformative glory for me occurred with Halloween Town, a signature cause marketing program I ran for five years.

  • Kristian explained to me that "signature" means you own it. It's the flag a nonprofit waves, regardless of promotion or partner. We certainly owned Halloween Town. We created it with iParty Stores to help accomplish our mission, attract consumer-facing companies and throw one hell of a Halloween party for the kids of Boston.
  • Halloween Town had more than one platform. It involved in-store cause marketing but also a two-day Halloween event that attracted 15,000 people.
  • Unfortunately, we lagged on mission. Halloween Town was ultimately about fall fun and the powerful demographic it spoke to: moms with kids. Perhaps that's why it only lasted five years before we decided it had done it's primary job of attracting just as many cause marketing partners as possible.
Better examples of transformative cause marketing include St. Jude Children's Research Hospital's wildly successful Thanks and Giving and the American Heart Association's Go Red for Women, of which Kristian and Carol were key architects. These signature programs better reflect the mission driven nature of transformative cause marketing.

These transformative players don't raise another's flag or change their colors on demand. They have a higher calling. Conversely, transactional cause marketers are hired guns that follow the money and wave flags red from tragedy and soaked in tears. I know this firsthand. I used to be one of those gunslingers.

Ralph Waldo Emerson said that "Our chief want is someone who will inspire us to be what we know we could be." Transformative cause marketing is the product of leaders who empower us to make this leap.

So, did I explain the difference well? What did I miss? What would you add, change, delete? Here's your chance to think transformationally and plant your own flag.