We all love Groupon, right? They offer us great deals with savings from 50% to 90% and if enough people sign-up for the deal everyone wins. Now a Portland-based company has launched Causeon. Same concept as Groupon, but Causeon offers up to 20% of its revenues to causes.
When Causeon launches in Portland this week the local chapters of Komen, YMCA and Girls, Inc. and others will be in line to receive checks.
I love the concept of Causeon. As a cause marketer, I think it represents a great alternative to point-of-sale programs and is a great step toward building a cause marketing community.
But can Causeon work?
Groupon works because they get tremendous deals and have a large, rabid following, which leads to better deals, more followers, etc. Oh, and one other thing: Groupon is a one-of-a-kind gee whiz phenomenon, much like the Daily Candy was a few years back. And while imitation may be the sincerest form of flattery, it’s no guarantee of success. No one ever approached the success of the Daily Candy, and Groupon is way ahead of its 500+ competitors.
Will Causeon’s cause focus be enough to distinguish it in a crowded field?
History says no. From GoodSearch to CauseWorld, the Internet is littered with cause-centric businesses that were founded on the belief that generous consumers would drive success but didn’t. As I said with CauseWorld, people don’t want a cause world, a dedicated cause product or service, they want a world with causes (e. g. Facebook Causes and the Groupon/Donor Choose partnership I describe below).
That said, here are some ideas on how Causeon might stand out from the pack and really work.
Groupon/Causeon mashup.This would be ideal because it’s the best of both worlds. Groupon has already shown that it can raise money for causes. In May, Donors Choose raised $162,000 when it was Groupon’s featured daily deal. It would be great if causes were a regular (or more regular) part of Groupon’s daily deals. Maybe Causeon can show Groupon that causes should be a more prominent part of its business.
Branded deals. Retailers like Macy’s and Bloomingdales host charity shopping days to help causes raise money and gain access to their supporters. Retailers could achieve the same results with a branded deal via Causeon. Working with Causeon, Macy’s could partner with Boston’s Museum of Fine Arts for a special one-day deal. Causeon provides the branded medium and deal from Macy’s, and the MFA provides the large donor base that are motivated to help the the museum and eager, like everyone, to get a deal.
Dedicated partner. Causeon hopes to quickly expand to other cities. If I was them, I’d identify a nonprofit in each major city that has the best and most experienced cause marketing team and recruit them to solicit great new deals for Causeon. In exchange for their efforts I’d make them the sole recipient of Causeon’s 20% donation. Here’s why.
- There are only a few cause marketing teams in each city anyway (3 here in Boston) and they tend to be housed in well-known nonprofits with strong emotional messages (kids or cancer, sometimes both). You’d gain a sales team with lots of local business contacts and be aligning with a mainstream cause that most people would give to.
- Anyone who thinks that aligning with more nonprofits in any given city will mean more promotion for Causeon is, well, a damn fool. Fact: nonprofits have failed again and again to help any business that has promised to help them if they will only promote them. Most causes can’t market themselves, you expect them to market you? Causeon should focus on those one or two nonprofits within each city that “get it.”
- Ultimately, Causeon will succeed or fail based on the quality of its deals. A dedicated partner means an instant sales team in each city, more local deals, and a partnership with a cause that people recognize, respect and empathize.
I really wish Causeon the best and look forward to their arrival in Boston. But just as Groupon’s CEO keeps on saying that his business concept is a very simple one, Causeon needs a simple value proposition to be successful. And being the cause version of Groupon isn’t it–unless they merge with Groupon, do branded deals with nonprofits or focus on dedicated partners in key cities.
What do you think?
As a Portlander, I too will be watching the success of CauseOn closely. While I'm pulling for them, I do agree that "copycat" services like these don't have the best of track records.
I love your idea of co-branded deals like the Macy's/MFA example you provided. Leveraging companies that are already well-immersed in charitable giving activities makes good business sense. If CauseOn can become a broker of such cause partnerships, all the better.
That's exactly the word I was looking for, Megan: BROKER. A lot of nonprofits will think they can just do it themselves. But they don't bring the branding and know-how to make the partnerships and deals happen seamlessly. That's where Causeon comes in. I can only hope that nonprofits recognize the tremendous opportunity Causeon is giving them.
Joe, my favorite line from this post: People don’t want a cause world, a dedicated cause product or service, they want a world with causes.
You raise good questions, but more importantly, even better solutions. I hope Groupon is taking note of your ideas.
I'm beginning to feel that new services/products/initiatives that are strongly tied to cause are automatically dismissed by the mainstream. I loathe saying this, but part of me thinks that if Groupon had a strong cause component from the beginning (i.e., it looked like Causeon) it wouldn't have taken off and would have been labeled "not for me" by many.
I agree with you on the cause component to Groupon, Olivia. It would have been great to see a cause angle right from the beginning, but let's face it, it's all about the deal!
I agree that people want a "world with causes"; building causes into existing business transactions/business models, like Groupon as an example, is a way to reach many more people than building a business around causes, like Causeon. As in your Groupon and DonorsChoose example, when supporting a cause is an option as part of an existing business transaction, there are lots of examples that it resonates enough to spur people to participate. Causeon is a great idea; the challenges, as you noted above, will be catching up to market leaders like Groupon and attracting enough critical mass with cause as the hook. Perhaps initially, partnering with non-profits with expert cause marketing teams is an idea that can help raise awareness and build its customer base. Ultimately, though, I would think that there's value in providing choice so that Causeon customers can help direct dollars to causes that really resonate with them. And hey, that could work for Groupon, too…This will be interesting to watch and see what transpires…
I agree, Jana, it will be interesting to watch. And let's be clear on something too: Causeon doesn't have to be the big success Groupon is to be considered successful. A tenth of Groupon's success would be a huge achievement for Causeon! But I would love Causeon to be able to achieve this because of the cause connection, and not just because, like Groupon, they have great deals. Because if it's because of the latter, what makes it different from the 499 Groupon-like companies out there.
Great post, Joe. I think you are absolutely right when you said that Causeon will succeed or fail based on the quality of its deals. If Causeon can find the right businesses and partners to work with, then I have no doubt it could build its customer base fairly quickly and gain a big following.
I like the idea of the branded deals too…hosting events and offering special one-day deals may help to differentiate Causeon from the others and it gives people a chance to support their favorite local charity. I'll be on the lookout for Causeon when it hits Boston!
Thanks for stopping by, Ashley. I appreciate your comment.
Joe, I agree wholeheartedly on your post about Causeon.com. Briefly, I had the chance to speak to one of their representatives and here's my thoughts:
Yes, you bring up a great point about CauseWorld. Although it was developed with great intentions, no one knew about it. Plus, the CauseWorld app wasn't a new idea but a replication of Foursquare with a slight spin to raise awareness about good causes and nonprofit organizations. Companies who succeed in business are the ones who have an original idea or concept and use it to create marketing buzz and become viral. Causeon, even though I would love for them to succeed, its another CauseWorld — a copycat of a great idea (Groupon).
Another case study is is.gd url shortner. Great idea, but not original.
I think Causeon was created because of the frustrations with Groupon's limited business offerings per day (which is one of the reasons for Groupon's success). With 37,000 businesses in line to be on Groupon's website, there is a demand for web presence and exposure. How many business will partner with Causeon because they want to partner with a cause or nonprofit organization (cause marketing)? Or will businesses jump onto Causeon because the infrastructure is there and they want to use it to promote their products while waiting for Groupon's approval?
Finally, I think Causeon is marketing themselves in a silo. With so many respected cause marketing influencers and cause evangelists on social media (You're "The King" Joe), how many of them have heard of Causeon before this post (Thanks Joe)? Has Causeon contacted these these cause heroes and asked for their advice and support? Based on my brief contact, probably not. Rally the leaders and others will follow.
I wish Causeon all the best. Only time will tell if its a success (fingers crossed).
My fingers are crossed too! See my earlier reply to Jana on how Causeon doesn't need to be the next Groupon to be successful.
However, you do make a good point about demand for Groupon-like services right now. If Causeon can grow quickly and build readership they could be a solid second tier email social couponeer.
This comment is from Brian Reich http://Twitter.com/brianreich
The best option, by far, would have been for Causeon to have launched as a component of Groupon — a division, a line item, a niche opportunity. If they are lucky, GroupOn will recognize the opportunity, or find itself with a lot of extra cash sitting around and a CEO (or similar) with a soft spot for social issues, and get bought up before too much else unfolds. More likely, as you suggest, CauseOn will almost surely fail. Worse, if Causeon doesn't succeed I suspect three things will happen: 1) There will be a chilling effect on other ambitious and exciting uses of technology and the internet by the not-for-profit/social innovation/cause world. Why would they experiment with new things if they can't work? 2) The analysis of why it failed will be focused on the wrong things — someone will say it was because of the economy, or because the timing wasn't right, the marketing wasn't sufficient, that people don't care about causes, etc. and a whole series of future projects and startups will fail to learn the lessons that are necessary to ultimately break through and succeed in a big way, and 3) the public — both cause-oriented and not — when constantly bombarded with new projects and startup ideas, asked to invest time or energy in something only to see a failed return, will engage less often and in less appropriate ways because they are tired of having their time wasted. This 'boy who cried wolf' syndrome will, over time, put the cause community, and everyone else, in a tough spot because when someone does finally figure it out, and launches a project or startup that is fully game-changing, there won't be anyone left to buy-in. We'll have wasted our opportunity.
I had a second piece to my comment which apparently got deleted, or didn't copy or something. That went something like this:
As a side note, I don't understand the need, compulsion to create something new… nor do I understand why those who fund startups and other projects continue to allow and support this approach. Is it ego? Is it ignorance – a lack of information about other projects and startups that exist? Is it a lack of understanding of how the larger marketplace works and the opportunity that exists through collaboration to enhance existing ventures, instead of competing? There are clearly opportunities to collaborate. There are clearly projects that are tapping into the broader interests of the population, consumer and otherwise. And there is a growing realization that a project like Causeon offers something that Groupon, or others, would not be able to create on their own. All the more reason to collaborate — everyone wins, everyone gets something. Innovation, and success in the context of new startups, requires more than just a good idea. There needs to be a shift & reset in how we think about creating these new ventures and startups, because without that the same mistakes will continue to be made. Break the cycle people, please.
Brian
Great points, Brian. The essence of cause marketing is partnership and that's exactly what we have to do to make things like Causeon work. What won't work is running off and creating a totally new business that then needs to be scaled, as you pointed out. What does work is tapping into the successful parts of businesses and leveraging those pieces for charitable gain. That's the basis for point-of-sale, percentage-of-sale and licensing, the three main ways nonprofits raise money with cause marketing.
Brian, Agreed – there is a fatigue related to trying something new when integration is really what people want. (I suspect that is why Causes has continued to along even though it is not a great platform for giving, but because of its integration with Facebook – it would have been long dead if separated from Facebook.) In my mind, breaking the cycle of creating new ventures just to do so is about creating really exciting collaborations (think of an Ashoka mashup with Accion, for example) and showing the added value of cause marketing to that collaboration.
Causeon could be successful, but I agree with Joe that it will sit by the sidelines unless collaborations are in place to keep it in the forefront of everyone's minds, such as some of the ways he suggests improving it.
I just can't see this idea taking off, but I wish for the nonprofits' sakes that it proves me wrong. Who wants to remember to go to a different site each time to give, even if it is cause giving?
Lastly, I've been wondering whether or not Causeon would benefit from collaborations with lending organizations that are well-known such as Accion, Kiva, Lend4Health, United Way that would broaden visibility and add value to these organizations. I view Caseon as another way to put a different wrapper on cause marketing. Fankly, I'd rather give my money directly to an organization that is using cause marketing.
Gr8 point on partnerships with lending organizations, Debra. I thought of United Way too!
More comments…
With all this chatter on Twitter about Causeon, has anyone received any response from the company? After looking at their Twitter account @causeonportland last comment was on Aug 23rd to be added onto wefolllow. Seriously? Site launch is on Wednesday. Again, if you are going to play with the big boys online you need to bring your equipment, including a BIG BAT.
Plus, I not a big fan of the name Causeon. Immediately, you think Groupon copycat. If you want to be different, don't follow – lead.
Thanks for the coverage Joe and thanks to all for a lot of sound, thoughtful comments. Joe's comments are spot on and the recommendations are basically a synopsis of our actual roadmap! We have several exciting partnerships in the works across the country and we also carefully vet NPO partners — as was said in the article regarding NPOs, some get it and some don't. It is not a quantity game but carefully selected partnerships that make Causeon different. The founding team comes from the tech industry and in defining our organizational structure we elected to hire both a VP Sales and a VP Causes that are separately building focused teams and go-to-market strategies.
We will be expanding quickly because we are not doing it on our own. As Joe suggests, a small percentage of NPOs in any given city "get it" and our pitch is resonating for them — and for the top businesses too. In Portland, we are working very closely with both national brands like Komen for the Cure, and smaller local organizations like The Dougy Center and TechStart. Both types of charities are important for our model and these are as an example three well-run organizations that “get it.”
We have hired the team that will be rolling out our Social Media efforts and most of the dialogue will fall on our "cause ambassadors" with city/regional focus. Our deals will start second week of September and NYC, Seattle, Orange County are next, and this is mainly because of the strength of the cause partners in those cities. Our research confirms that cities where groupon is already successful are the cities where folks are the most receptive to Causeon.
We did indeed examine CauseWorld, GoodSearch, Causes.com, Care2.com, and many, many others and have architected what we believe is a considerable differentiator in technology, positioning, deal quality, and business development to build a substantial business, and brand, that benefits all constituents — especially the causes. All of these businesses are long tail businesses supporting tens or even hundreds of thousands of causes. Causeon is very focused on mutually beneficial strategic partnerships with a focused and limited partner base, and it is resonating. If there is an NPO we need to know about that might fit the bill, please send them our way.
As far as execution goes, and the article doesn't really cover this, but we are attracting top-flight businesses that want to/already do "give back." Most of these businesses are small businesses with owners that are passionate about ________ . (Insert cause here.) There are businesses that have passed on group buying for a myriad of reasons until Causeon came calling. Further, these businesses want the kind of clientele that cause marketing attracts. It’s a true win-win-win.
As for the name, like any name, it has a few detractors but it is already sticking and having named several companies I can honestly say I've never experienced such positive feedback. Cause + Coupon = Causeon. We have other offerings in the works that go beyond group buying, but yes there is an obvious resemblance to "Groupon" but the word is closer to coupon.
Joe, would love to talk more, and perhaps we can get to Boston even more quickly than anticipated.
Craig Barnes
Causeon
Thanks for commenting, Craig. I appreciate you stopping by and talking about Causeon's plans. You'll notice in everyone's comments here that we're all really interested in Causeon and want it to succeed. It's nice to see that you have a road map for success!
I'd love to talk to you about bringing Causeon to Boston. A rep from your company emailed me last night. I'll be sure to get back to her.
Joe
We are really excited about the feedback we've gotten so far from all constituents – and of course boards such as yours. I will contact you soon as Boston is on our short term radar, but also to kick around ideas in general about cause marketing best practices and our planned approach. thanks again. CB
Great to see all the activity and, as always Joe, your thoughtful comments.
Finalising plans now for Buy1GIVE1 (B1G1) in the US so it'll be interesting to see how the success in Asia/Pac markets plays out in the US, with, as you know, 100% of the giving going to the causes.
Whatever happens, the debate and the buzz get stronger and more effective giving gets done. Gotta love that!
Paul Dunn
B1G1.com
Thanks, Paul! Keep us informed about B1G1!
crap there goes my idea for CauseBook!
Seriously though, I think you hit the nail on the head Joe, and Brian's comment about startups couldn't be more true! Why do so many services think they need to reinvent the wheel? Why make things more difficult than they need to be? We see this not only happening consistently with cause focused startups but with the causes themselves. Our firm spends a lot of time working with our NPO clients to throw away some of their preconceived notions of what cause marketing or online marketing means in their minds and then introduce them to what their realistic expectations should be. The joy for us is seeing the relief once we point out that most of their needs can be met with services that are already available out there, and usually for much less than they thought they'd need to budget.
Now one thing I'd love to see happen is someone creating a service that pulls in information on all of these other services that are already available for NPOs to tap into and use, provides clear tips and recommendations to them, and gives the facts straight – with no BS. But of course, you've also done a terrific job of doing most of this here on your blog – Kudos! And btw, we just might be working on a system like this right now
Thanks for stopping by, Dan. I was just thinking that today Dan about having a one-stop outlet for nonprofit's to shop these different services. Are you familiar with Laura Fitton's http://www.oneforty.com, Dan. Same idea, but for Twitter.
I know we plan to talk at some point. Let's put that on our list of things to talk about!
Joe
Sounds good sir!
I realize there are different forms of cause marketing, designed to create different win-win outcomes, but Causeon seems tricky. I've seen the partnership model where the business receives the PR/reputation benefits and the nonprofit receives financial gain; win-win. With Causeon, this new, well-intentioned tech service, it seems that participating businesses and nonprofits may only gain financially. I say that because I can't see a business getting big PR for making a Causeon coupon (though I could be way off here). Maybe Causeon itself will receive all the PR (we're all talking about it) and that will drive the financial gain for the businesses and nonprofits. As you say Joe, Causeon can, "succeed or fail based on the quality of its deals." It needs some monster coupons/partners, especially at first. Can it be a win-win-win? If so, there's certainly nothing wrong with that! Guess we will see.
[...] Causeon: Groupon for Cause Marketing [...]
Choosing a cause or a charity seems to barely scratch the surface of what needs to happen in order to make a difference. The real cause that needs to be addressed is creating charitable hearts and the ability for people to give to and rally others around an organization or effort that is making a difference. Whether that is locally or globally. As organizations pick causes, usually the small and most effective organization get left out. Let's work on building the power of the people rather than building the awareness of the cause. Give the people the power and the motivation and they will grow the support of many great causes.
A little late to this party, Joe, sorry about that.
But the benefit is I can see what everyone else wrote. And I'm surprised by the several comments decrying entrepreneurship. I agree that not all ideas are good ideas, and that some businesses are better seen as units in larger companies, but I disagree with the idea that there are enough companies out there and that new ones cause consumer fatigue.
Our whole economy is based on entrepreneurship. Yes, only one in five survive, but that's the magic of the whole thing. We are risk takers, we try out new ideas, our laboratory is the whole population. It's the game of life and while most fizzle, some grow, flourish, and ultimately change the game. We can't stop innovating because we can't ever accept the status quo.
That said, not all ideas are good ones and a good founder needs to think through his strategy. If the right strategy for an idea is to merge with another company, then by all means try to do that. I also agree that new companies that can only be successful if whole populations buy in (like social networks) are very risky because the element of chance is so critical to their success. Causeon seems to be hoping for that to happen and I wish them the best.
Ultimately, I think that companies that do more than just donate – that take time to educate and engage consumers who are ready for it – will move the needle and advance causes. Hopefully, in 20 years, this will be a past-tense debate.
Thanks for inviting me to contribute.
Ian
Better late than never.
Isn't it kind of nice to arrive after everyone has reflected? It will be interesting to see how we all look back on Causeon in a few years (heck, maybe a few months!). Like your comments today, hindsight is twenty-twenty.
Nice to have you back, Ian.
Here's my take … instead of giving 20% of revenues to charities just give me 20% more off and let me give it away. I don't think these models work. It hasn't worked in travel either. There are tons of companies that try to give money based on booking travel but the reality is consumers want the best deal and then they can choose where to give the money.
You know, Mike, you're really hitting the nail on the head about services like Groupon. Are charity concepts enough of an incentive to get people to buy. The answer so far has been no. It's a nice add-on, but it hasn't been a real distinguishable feature that drives a businesses success. Sorry, but so true.
Great article – Causeon is definitely a wonderful idea, but BloomSpot has already been doing this with their Community Circles program – http://www.bloomspot.com/circles/ Nonprofits can create a Circle on BloomSpot and BloomSpot will donate a percentage of every purchase back to the participating cause when members purchase offers online. BloomSpot has incredible offers and this is a great program on top of it!
Interesting, Emily. So it's more like Endorse for a Cause. Did you see my post on that service. The edge there is that it's based on tweets and posts to Facebook.
http://selfishgiving.com/cause-marketing-social-m…
[...] Groupon works and its similarities to cause marketing (not to be confused with my earlier post on Groupon as cause marketing, better known as [...]
[...] in the past year, these are certainly them. From Twitter events to geo-location check-insto online group-buying – there are a variety of cutting-edge marketing tactics being adapted for good causes, proving [...]
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[...] don’t buy it, and fizzled experiments from Causeon to Edun to CauseWorld to GoodSearch show that while consumers do indeed want a world with causes, a [...]
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