(Re)Defining Cause Marketing

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Last January I wrote a post on What is Cause Marketing? that got a lot of great feedback. Over the past year I've gone back to that post many time and reread the comments again and thought about how I was defining cause marketing.

I felt I had the first part right.

a partnership between a nonprofit and a for-profit for mutual profit

What I thought needed redefining was just what it encompassed. In last year's post I wrote that cause marketing involved three types of programs: point-of-sale, percentage-of-sale and licensing.

This year, I'm much more open to including most activities between a company and a cause. They include:

Point-of-sale. When a cashier either solicits a shopper for a donation (active cause marketing) or signage is prominently displayed at the register to encourage the shopper to make a gift (passive cause marketing) that's point-of-sale. Unless you're completely new to my blog, you know that POS, in the form of pinups, is my bread-and-butter program. But if you are new here's a primer.

Purchase or action triggered donation. When a consumer buys a product or service (like a latte at Starbucks on World Aids Day) a donation (5 cents) is made to a cause (Product Red) that's a purchase-triggered donation (I think this is a better describer of what happens when a shopper buys a cause product than the "percentage-of-sale" tag I used last year). Sometimes instead of a purchase, a donation is made when the consumer performs some type of action. For example, Macy's donated a dollar the Make-a-Wish Foundation for every letter to Santa dropped into their special letter boxes at Macy's stores.

Licensing. This is when a company pays a fee to use a nonprofit’s brand on its product. Licensing may include a certification process by the nonprofit before the company is allowed to use the logo. A longstanding licensing pact is Arthritis Foundation’sEase of Use Commendation for the Advil Caplets Easy Open Arthritis Cap. Cause marketing licensing is practiced by the only the biggest causes (e. g. Komen for the Cure, American Heart Association) and is not a tactic for your average or local cause.

Message Promotion. This is when a business puts its resources to work to promote a cause-focused message. David Hessekiel at Cause Marketing Forum has a lot of great examples in his Halo Award Archive.

Employee Engagement. This is when a company leverages its workforce for social good. I think of Home Depot's Partnership with KaBOOM! to build 1000 Playgrounds in 1000 Days, which involved nearly 100,000 Home Depot volunteers.

Digital Programs. The web, social media and especially location-based services will dramatically impact cause marketing and change the way we execute the above tactics. To leave this out is to leave out the future of cause marketing and how cause and companies will partner in the years to come.

I still don't think the "marketing of causes" or sponsorship are cause marketing. (Jocelyn Daw told me recently that while sponsorship is when the cause puts its resources to work for the company, cause marketing is when the company goes to work for the cause. I like that!) But there are some interesting and creative ways to integrate cause marketing with sponsorship.

Nor is cause marketing cause branding or corporate social responsibility, although it is a subset of the two.

Finally, cause marketing is not philanthropy. While it has philanthropic aspirations and goals, it's better described as marketing, and, in some ways, a business.

Those are my thoughts on cause marketing for January 2011. What are yours?

[Update 1/21/11: In the comments be sure to check out Jocelyn Daw's comments on how to distinguish traditional marketing from cause marketing. She makes it quite clear. Also, she outlines the 4 P's of cause marketing: Partner, Purpose, Passion & Profits.]

Striking the Right Balance of Philanthropy, Marketing & Business

Two news stories caught my attention last week. The first was the report that Panera had opened a "Community Cafe" that encourages customers to “take what they need and give all they can.”

The cafe is like any other Panera except there are no prices. Customers pay what they want and what's raised --minus expenses-- goes to charity. Or something like that.

It doesn't really matter. Three things are clear to me. It's great marketing. A terrible business idea. And the philanthropic impact will be minimal.

It's great marketing because as Edward Boches notes, it's well, everywhere, and the program is a great calling card for Panera when folks ask "what have you done in the community lately?"

It's a terrible business idea because when the bloom is off the venture the cafe won't be able to sustain itself from customer donations, much less give back to causes. The cafe may become a venue for community programs, as Panera envisions, but a fully functioning Panera sustained on the goodwill of customer donations, with money left over to give back to causes?

Sorry, Panera. This is one dough that will never rise.

The second story was that Absolut is launching another city-themed vodka - this time Brooklyn - which will join New Orleans, Los Angeles, Vancouver and Boston. And like previous city-themed spirits, Absolut is making a donation to a local charity, $50,000 for affordable housing in Brooklyn.

Absolut wouldn't be on its fifth city-inspired vodka if they weren't good for business. But they haven't been as great for the charities they support since New Orleans causes got a $2 million windfall from Absolut. The next city vodka, L. A., got a fraction of that amount. The Charles River Conservancy in Boston got $50,000. While the marketing for these city-themed vodkas began promisingly, they never evolved beyond a flat donation to a good cause.

What a buzzkill.

The lesson here for cause marketers is that we have to carefully balance philanthropy, marketing and business in the programs we create.

If we overweight philanthropy we may miss the real opportunity corporate partnerships offer. Just think if U2's Bono had been blinded by philanthropy when he first solicited companies to support Product RED. He would have accepted their checks, which many offered, instead of signing cause marketing pacts, which raised millions more and established RED as leading philanthropic brand.

If we underweight philanthropy, companies run the risk of putting  marketing first and reducing philanthropy to "go away" money that gives them a cheap halo that everyone knows the company didn't earn.

If you underweight the business component you rob the program of its ability to leverage market forces for good. That's exactly what's wrong with the Panera venture. Panera can best serve nonprofits by leveraging their company "as is" to support nonprofits. I see Paneras in Greater Boston do this everyday with tremendous results.

The fact that Panera is a for-profit is a good thing for nonprofits. But their "Community Cafe" is too much of a good thing.

But what if you throw off the balance by adding too much business, instead of too little? You blind yourself to the greater good. Even when the philanthropy is in the millions and the marketing even more, and seemingly well intentioned, people see it for what it is: a dumb ploy to sell more buckets of fried chicken that ultimately do more harm than good.

AMA Presentation: Cause Marketing During Challenging Times

Thanks to everyone who came out to the AMA Boston event on Cause Marketing During Challenging Economic Times. It was a great event. As promised, below are links to some of the topics I discussed.

What is cause marketing. One thing that was clear from everyone on the panel is that Bonnie, Erica Vogelei from Cone and I all had a different understanding of what cause marketing is. Here's my perspective. If you're a cause marketing skeptic you may want to check out my post on Defending Cause Marketing. Be sure to read the comments under both posts as they are very helpful.

The Power of Pinups. My cause marketing efforts revolve around two key areas, point-of-sale and percentage-of-sale, especially the former. For a primer on point-of-sale, or pinups as I like to call them, check out this post, which has lots of links. My last pinup program was with Ocean State Job Lots. But I've also posted on other programs by Hannaford Supermarkets and New Balance.

If you're interested in learning more about percentage-of-sale programs, read this post about Starbucks & Product (RED).

Cause marketing and social media. One of my favorite topics. Be sure to connect with me on Twitter, Facebook, Linkedin, etc. on the right sidebar! Here's a good sampling of my posts on the subject. Also, check out my post on Foursquare and Harvard and how the latter can school cause marketers on how to raise money with location-based social media.

This presentation didn't have any slides, but if you're a PowerPoint-aholic check out these slides from an event I spoke at just a couple weeks ago.

Three final things.

First, if you have a question, leave a comment and I'll reply to you. I might even write a post on your question! And you can make sure you never miss a post by subscribing to my email newsletter, which goes out twice a month.

Second, I've posted a whole series on Selling Local Sponsorships for Nonprofits that explores the selling process and how to prospect, pitch and close. It's helpful if you work in nonprofit sales.

Finally, speaking of pitching, let me leave you with one. The team at BMC is available for hire.

Thanks again for listening. I hope my accent wasn't too thick (a problem sometimes even for a Boston crowd!).

Can Companies Use Cause-Related Marketing to Help Haiti?

I think they can, but it needs to be done appropriately and with sensitivity. As we learned in my post What is Cause Marketing? cause marketing isn't philanthropy first, it's marketing. And the situation in Haiti requires philanthropy first. And any company that tries to swap that with marketing will be duly punished by consumers.

But just because the recipe calls for a pound of philanthropy doesn't mean there isn't room for a teaspoon of cause-related marketing.

Here's how it can be added to the mix without ruining the batter.

A lot of companies have already struck the right chord with philanthropy by donating millions to the Haiti earthquake victims. Let's use Startbucks as the example, which has donated $1M to the American Red Cross.

Additionally, some companies, like Starbucks, have carved out areas within their stores where customers can make donations to Haiti.

But how could these companies add cause marketing?

Again, as you know from my earlier post, I view cause marketing in three tactical ways: point-of-sale, percentage-of-sale, licensing.

For Haiti, I think point-of-sale might be perceived as too aggressive and opportunistic. Conversely, licensing is a tactic that couldn't be rolled out fast enough to meet the urgent needs of the victims.

Neither will work to help Haiti or the favorability of the company that executes the program.

However, I think percentage-of-sale could work. The Starbucks/Product RED partnership is a model. During the month of December, Starbucks donated five cents for every coffee sold to fight AIDS in Africa. The same could be done for Haiti at Starbucks and at other retailers.

But here's what every consumer would need to know. Regardless of whether you buy the product or not, the company would donate X dollars, a generous minimum donation, to Haiti. A donation that could go up significantly with the small purchasing choices customers make every day.

I like this option because it's built off of two solid layers of philanthropy, and a good portion of the percentage-of-sale donation comes from the company, not from the consumer's purchase. Nevertheless, the program gives the consumer a chance to literally register their support for Haiti and to note the company's efforts.

I read this post to my wife and she said my idea still sounds like a marketing ploy. Maybe cause marketing has no place in helping Haiti.

What do you think?

CauseWorld: Location-Based Cause Marketing

Beth Kanter recently wrote on CauseWorld, which is essentially a "cause version" of Foursquare.

Like foursquare and gowalla, you open the application on your phone and see local businesses (instead of showing everything around you, CauseWorld only shows businesses that you can check into for karmas). Enter the store, check in, and get the karma points offered to you. Once you’ve collected enough karmas you can donate them to a variety of causes. And, of course, you get badges for various activities.

You should definitely read Beth's post and check out the TechCruch interview with the founder. I've been using the iPhone app for over a week and I like it a lot. The interface is very slick and you learn a lot about the charities CauseWorld supports. (Charities that are currently being funded by Citi and Kraft Foods.) But I have my doubts that this niche cause service can really compete against mainstream players like Foursquare.

  • Right now I'm checking in with both CauseWorld and Foursquare. That's not going to last. One of them will win out. If Foursquare adds the cause component to it, I'd rather do ten things on Foursquare than one thing on CauseWorld.
  • Niche cause services never seem to take off. I'm not spending a lot of time on GoodSearch, are you? Remember all those portals we could visit before going to sites like L.L. Bean and Amazon, and good causes would get a few pennies every time we bought something? Are you still using them?
  • Thus far consumers prefer to include their causes within a mainstream activity or vehicle. Take Facebook, which has a cause component. While supporting causes via Facebook is still in its infancy, it will grow. I'm not sure the same will be true for a standalone product like CauseWorld.

Think of it in terms of Product RED and its retail partners. Would it be better for RED to have standalone stores filled with cause products? Or is RED better off selling a few products in Starbucks and Apple and Nike? The answer is clear because the mainstream consumerism these retailers offer drives charity sales and RED is the big winner.

Alas, I'm not sure people want a cause world.

But I do think they want a world with causes. And if they can get that on Facebook, or on Foursquare, or in their next visit to Starbucks--things they do everyday for reasons outside of philanthropy--that might preclude a separate tool like CauseWorld.

What do you think?

What is Cause Marketing?

***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!