***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!