***Note: Please see my updated post! But the comments in this post are certainly worth checking out!***
It’s the beginning of a new year so let’s start fresh by defining what exactly cause marketing is.**
Keep in mind that this is my definition of cause marketing. (There are other definitions out there.)
Cause marketing is a partnership between a nonprofit and a for-profit for mutual profit.
A few things about my definition.
First, my definition is focused on cause marketing, not the marketing of causes. CM for me is not about advertising campaigns for causes.
Just this year I’ve come to appreciate why some cause marketers still use “cause-related marketing” to distinguish transactional cause marketing from cause advertising. While I admire the precision of the phrase, the expression is so clunky I can’t bear to use it!
Second, the word partnership means something. The relationship is work-work and win-win. No one is getting a free ride, an unexpected check, or a cursory thank you in the mail.
Finally, the profit in cause marketing comes in two forms, first for the nonprofit and second for the for-profit.
For the nonprofit, the profit is money AND branding/visibility. St. Jude’s raised tens of millions this fall through Thanks & Giving. Last year, Komen raised around $30 million. Cause marketing also offers causes valuable branding and visibility. There is no better example of this than Product RED, which has built a top philanthropic brand through its pacts with partners like Gap, Starbucks, Apple, and now, Nike.
For the for-profit, the profit is greater favorability with consumers and, potentially, increased sales. The premise is a simple one. Consumers buy from companies they like and respect. Cause marketing is a conduit to earning their favor.
There are three tactical approaches for cause marketing:
Point-of-Sale. For those of you who know me, you know I’m all over this. Just do a search on my under “pinups.” These are programs that happen at the register with pinups, paper icons, scannables, paper plaques, call them what you will. The MDA Shamrocks are the classic example.
Percentage-of-sale. These are products or services from which a dollar amount or percentage of the purchase price goes to a good cause. One of my favorites is the New Balance/Komen partnership. New Balance donates 5% of the MSRP of all items from the Lace Up for the Cure Collection with a minimum guarantee of $500,000. In 2009, Komen received a million dollars!
Licensing. This approach is dominated by the big charities and companies. A longstanding licensing pact is Arthritis Foundation’s Ease of Use Commendation for the Advil Caplets Easy Open Arthritis Cap.
Three clarifications on cause marketing.
#1 – Sponsorship is different from cause marketing. But not in definition. I agree that sponsorship can involve a partnership between a nonprofit and for-profit for mutual profit. The difference lies in execution (i.e. point-of-sale, percentage-of-sale, etc.).
#2 – Cause branding is different from cause marketing. Chris Mann from New Balance makes an excellent point on this in the comments below. Read it and my response. But let me say: Cause branding, like corporate social responsibility, is a strategy. Cause marketing is a tactic that falls under cause branding and CSR.
#3 – Cause marketing is not pure, altruistic philanthropy (gasp!). Like the name says, it’s, eh, marketing (which I define as the things we do to get and keep customers). One of the goals of CM, especially as I define it, is money for a cause. But it’s not the only goal and it’s certainly not given without strings attached, for both partners.
It’s not giving. It’s SELFISH GIVING.
Now that we’re clear on that, what questions do you have?
**Hat tip to @grantgriffith for encouraging me to write this post!
[...] This post was mentioned on Twitter by Grant Griffiths and Joe Waters, jace anderson. jace anderson said: RT @joewaters: Let's start the New Year off right! Fresh 'Fish: (Plz RT) "What is Cause Marketing?" http://bit.ly/91RvIy [...]
Well done, Joe. You've framed cause marketing in a concise, compelling way that is easy to understand. I especially like your emphasis on "partnership" between the two.
I would amend your second tactic to recognize those companies donating specific dollar amounts, not necessarily a % and not a sponsorship. This would include giving contests, such as Chase.
Sir, you are absolutely correct and I have made the necessary changes!
I'm glad you liked the definition. You're "in the know" and it's nice to know we're hitting in the same ballpark.
Social comments and analytics for this post…
This post was mentioned on Twitter by joewaters: Let’s start the New Year off right! Fresh ‘Fish: (Plz RT) “What is Cause Marketing?” http://bit.ly/91RvIy…
Great post to start the new year. I think "cause marketing" gets a little fuzzy for some people because the "act of goodness" overshadows the company' or nonprofit organization's marketing tactics for "profit."
Most people get a warm feeling when they buy products or surrender to the message that do good for the community (I'm one of them). However, its the marketing strategy that caused you to feel that way is what's behind cause marketing. It is truly selfish giving because the bottom line for most of these organization is $$$$$.
You said it best "Cause marketing for me is not about advertising campaigns for causes."
Good job!
Thanks for commenting, Noland!
Very clear & straightforward definition of cause marketing Joe. A quick point of clarification on the New Balance/Komen program (thanks for the mention – we like you too!), I wouldn't classify it as licensing. It's actually cause-marketing as you defined it. New Balance donates 5% of the MSRP of all items from the Lace Up for the Cure Collection with a minimum guarantee of $500,000. We were pleased the have product sales dictate the $1 million contribution you mentioned in 2009.
I like to use the term "Cause Branding" for what we do at New Balance. The reason is that we have a year-round partnership with Komen that includes both external programs (percentage of sale, point of sale, sponsorships) as well as internal programs (employee education, event participation, fundraising, etc). The key here is that our commitment is much deeper than a limited-time program around the sale of products/pin-ups and gets at how we want our brand as a whole to be associated with a cause. A few great examples of this include GE's Ecomagination and Timberland's work with the environment.
Interesting, Chris. So really the Komen/New Balance is a percentage-of-sale, not licensing. I'll correct this in my post. While both tactics fall under the umbrella of cause marketing, they are different in the approach.
Cause branding is a great term and I think better reflects the larger objectives and activities companies engage in. For me, cause (related) marketing is actually a subset of cause branding. Again, because cause branding goes way beyond the tactics of POSale, %OSale and licensing.
Excellent points, Chris!
When it comes to defining Cause Marketing, is he Merriam? Or is he Webster?
Very well done @joewaters. This would definitely help a person If it were to come up in Google when someone searched for a "Cause Marketing Definition". Looking forward to learning more from you in 2010.
I'm interested in learning more about how nonprofits and forprofits negotiate terms on this type of stuff. What's fair? What's normal?
http://franswaa.com
That's a very interesting question, Frank. I have to say that every partner is different and some pay more dearly for their halos than others.
I think you would find that normal varies widely. Fair too. The latter can be a tough one because when nonprofits are first starting out their partnership programs they want to land a partner so they negotiate generous terms. I've done it myself.
While my nonprofit ultimately benefits, it does take some companies time to see the value of cause marketing and why it should be part of the marketing mix.
Sometimes it requires a test drive or two. And while test drives are free, any salesperson will tell you that there is no better way to sell a car.
I wanted to say thanks for taking the time to define what can often times be a fuzzy subject. As you mentioned, there are many definitions for cause (related) marketing.
I must say though, I do struggle with your praise for Project RED.
First, it uses the words that are like finger nails on a chalk board, percent of proceeds. In my former job at Komen and at my current job at Habitat, I struggle to get my corporate partners to be transparent and in compliance with the BBB Wise Giving Standards. Can you truly define a percent of a proceeds? How does the consumer truly know what their purchase will trigger. Just does not seem to build consumer trust in your brand.
I struggle with "portion of proceeds" whenever I see it connected with any nonprofit, Krissy. But I do have a lot of trust that when it comes Product RED they are "doing the right thing." Not so sure about the other nonprofits.
And you're right: in general, it doesn't build consumer trust.
But remember that when it comes to Product RED a lot of the concern is not about how much from each product goes to the cause (e.g. five cents from every drink sold in December at Starbucks, five bucks from every Apple iPod sold), but how charities have raised in total for Product RED. For example, The Gap doesn't disclose how much they raise for Product RED. They should.
Part 2:
Also, (RED) states on their website that they are not a charity but a business model to raise funds and awareness for the Global Fund. Your examples above highlight great charities (St. Jude and Komen) and the campaigns that benefit them. In this scenario (RED) is what we know, and it is often connected to the fight against Aids but Global Fund seems to be left behind.
(RED) is certainly a very visible project and to be commend for the funds they have raised but just not sure the I would use it as Best in Class example. So many greats to admire….
I like the fact that RED states it's not a charity but a business model. This would be like if St. Jude branded "Thanks & Giving" as a separate business model (or if Komen launched "Race for the Cure" as a separate business model.)
The Global Fund has committed $18.7 billion dollars since 2002 to fighting disease around the globe. I think RED has done fine by them. Not to mention that the Global Fund would have raised more than $18.5 billion without Bono and his friends. That's pretty spectacular.
I think it's important to remember that a business model like Product RED is doing something that the Global Fund could never do. So we shouldn't be surprised when it doesn't reap the benefits.
Thanks for writing. I've enjoyed the conversation. Please visit again!
Joe – Very focused definition here and the addition of "Cause Branding" by Chris. I'm also glad you added "work-work and win-win" so that non-profits don't think they've arrived once a partnership is created.
John
It's very true, John. As you and I both know, cause marketing requires a lot of work. And success doesn't happen overnight!
Hi Joe, great post! I'm glad to see you weigh in on what's obviously a fuzzy topic for some.
The one thing I'd call out is the consumer behavior side of cause marketing. You said "cause marketing is a conduit to earning their [consumers'] favor" and in theory it should be. Interestingly, though, with the current problems of "greenwashing' and consumer fatigue relating to cause, my sense is that consumers are actually very wary about these partnerships, especially relating to the for-profit company's motivations for being involved.
In order to combat this, I often hear that the marketing and messaging a company uses to talk about their partnership should be authentic, transparent, and resonant, but this is obviously easier said than done.
What has been your experience, if any, helping companies that partner with your organization to successfully combat greenwashing? I'd be curious to hear your thoughts.
Thanks again for a great post!
Cause marketing programs are like lawyers. The market is saturated with them, but there's always room for another good one.
Fortunately, there are a lot of good partnerships out there, but nonprofits do a poor job communicating all the great things these companies do for them. One way we've tried to combat this at my hospital is through embracing social media. It gives us another tool to tell the story of our partners and show firsthand all the great things they do for us.
Take a great partner of ours like Ocean State Job Lots (a discount retailer with 92 stores in New England). They do two pinup programs a year for us. But that's not all. They give us food, clothes, jackets and their owner, Marc Perlman is a generous donor to the hospital.
But the outward face of Ocean State are those two pinup programs. But with social media we can control the messaging more and talk about all the great things Ocean State has done for us. We can capture pictures of their trucks backing up our loading dock dropping off all sorts of needed foods and supplies.
These are messages and images we can share on our blog, on our Facebook fan page, on Twitter, Youtube, Flickr and in traditional tools like our newsletter.
We're committed to showing the world that partners like Ocean State Job Lots are not "one-hit" wonders but have a long-term commitment to the mission of our organization.
Thank God! for this post, Joe. I appreciate your precision of definitions. I have said for a long time, if 'we', those of us in the field cannot come to common use/definitions of terms than it muddies the water and makes difficult to convey to companies, nonprofits and others what 'it' is and what 'it' is about. I recently had a chat with the executive of a very large corporation, who I thought 'knew' what cause marketing was, (RED) was, etc… only to my dismay to hear him/her using the wrong terms (actually made one up I've never heard before) and not understanding the definition of the terms. So, it leaves 'us' those in the field with a large educational curve to our model.
I agree, Maggie, and it's interesting you should bring this up! The person who suggested I write this post, Grant Griffith, is not the cause marketing field and asked me: "Do people really know what cause marketing is?"
Of course, I was like "Sure they do! I've been writing about it for five years!" He told me he wasn't so sure and I think he's right!"
Loved your story about your meeting with that executive. Would love to what that word was he/she made up! That would be my new favorite word!
Thanks for visiting.
There were two: 1) Social Brand Philanthropy. I was thinking "Say Wha?" Is this something I don't know about? The other had to do with (RED)… as in I was describing how (RED) would be in good alignment with their brand, company, etc… The exec thought I was talking about Go Red campaign simply because they were only aware of the word 'Red' with AHA!
I was polite, didn't offer a free educational lesson, didn't correct. But thought, Jeez-Oh-Man, there is a lot of education to be done just with terms and definitions. I posted on Twitter this whole idea of definitions and getting on common ground back around early Dec. Just recently @tactphil posted calling the nonprofit sector the Human Sector. Great, just great
What we need another term when we can't even get the basics across well.
Maggie, people are going to be talking about how fricken smart I am when I start talking about Social Brand Philanthropy. And I'll have you to thank!
Joe,
This is terrific. Your outline is straightforward, encompassing and nuanced! Frank raises an excellent question about how the terms are negotiated between for- and non-profits. I’ve been curious about this.
Importantly, you emphasis ‘partnership’ and the work that goes into creating effective cause marketing campaigns. Must admit when Chris first threw out cause branding, I was adverse to another phrase, but I agree with and see the importance of his definition, and of cause marketing as a subset.
Bookmarked for reference!
Thanks, Olivia. I'm glad you found this useful.
Joe,
Thank you for providing a great overview of cause marketing and fostering an informative dialogue! As Maggie pointed out, even those of us fortunate enough to work in the interesting and rewarding field of cause marketing do not always use the same terms, so hopefully this discussion will lead to standardization in the field.
Below is how I envision the hierarchy of terms based on the discussion thus far (note I am only including the terms related to cause under CSR):
Corporate Social Responsibility
Cause Branding
Cause Marketing
Point-of-Sale
Percentage-of-Sale
Licensing
Cause Sponsorship
Sorry, formatting did not carry over:
CSR>Cause Branding>Cause Marketing>Point-of-Sale
CSR>Cause Branding>Cause Marketing>Percentage-of-Sale
CSR>Cause Branding>Cause Marketing>Licensing
CSR>Cause Branding>Cause Sponsorship
Honestly, from the way you "define" cause marketing I can't say I agree with the ideas and principles. Donations and corporate giving is surely going to have much less impact if companies and non-profits are sharing revenue. I think it's a pretty dumb concept!
Not everyone likes cause marketing, Josh. But one thing to remember is that cause marketing is something that generally happens IN ADDITION to a lot of other forms of good giving by donors and companies.
For instance, in one of my comments above I wrote about Ocean State Job Lots and all the things they do in addition to cause marketing. Cause marketing isn't an either/or decision. It's something that can be done alongside traditional giving, month monetary and in-kind.
Thanks for visiting my site and taking the time to write! You may enjoy another post I wrote called "Defending Cause Marketing" (you can search for it at the top right of the page) as it references an article by someone who shares your current opinion. It's an interesting read.
I've grappled with definitions ever since trying to name the company that I eventually christened the Cause Marketing Forum.
CM had the advantage of quickly communicating "mutually beneficial commercial relationships". Its weakness: many thought this only meant transactional campaigns, much as Joe Waters does.
Transactional programs will always be core, but cause marketing, as we use the term at CMF, extends to many other types of corporate social initiatives (a great term developed by Kottler & Lee in their terrific book "Corporate Social Responsibility".) At CMF, the discussion also encompasses corporate social marketing, employee engagement and message promotion.
Debating definitions is valuable, not because we're going to agree on THE definitive terminology, but because focuses practitioners on key questions: What exactly are they trying to accomplish as a company or nonprofit? What are the best strategies and tactics for them to employ to reach their goals.
Thanks Joe!
I am submitting that cause marketing will take on a crowd-sourced partnership between consumer, brand and non-profit for mutual benefit of all.
The arrival of how I came to this conclusion can be found here: http://www.facebook.com/#/note.php?note_id=237537…
(Requires a Facebook log-in)
As always, thanks for sparking such great conversation, Joe.
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Hi Joe, do you think David should change the name of the Cause Marketing Forum? Cause Branding as defined here seems so much more comprehensive and with the times than an organization named after a "tactic" — CSR seems to go too far for some companies.
(sorry for the uber-delayed comment. i found my self once again looking for great definitions to help a client understand and as usual landed here with you.)
thx
Ha! Sounds like I should keep things just as they are.
I agree with you on the difference between CM and CB. CM is tactical. CB isn't.<p style=”margin:0; “>
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