Archive for category Small Business

An Interview with cause marketing expert Laura Probst of Do Good. Make Money. Laura has over 14 years experience focused in the area of cause partnerships for major brands including Kraft, Warner Bros, Sony BMG, Merck, The Container Store, Nestle, Seventh Generation, Unilever, WebMD, American Cancer Society, Dermalogica, and Hasbro. She is currently the co-chair of the 13th Annual Cause Conference , March 15 – 16, 2011, hosted by the American Marketing Association’s San Diego Chapter. 

FS: I thought it be helpful to start off with the basics. For our readers who may not be familiar with the term “cause marketing” can you tell us what it is and is not?

LP:   There is a lot of debate and confusion over this term, so it’s a great place to start. This is a field full of similar-sounding terms and no absolute definitions. That said, I take a broad view of cause marketing – anything that a company does to communicate and draw attention to its philanthropic efforts. This can include what many term “classic” cause marketing transactional programs – where a company includes a promotion on its product packaging or as a tool to promote its services, offering to give a percentage of the sale price or some contribution from the sale to a social cause or specific charity.

There does not need to be a transactional component, however. A company might decide it wants to improve the environment and so commits 10% of its profits to environmental causes or it may have a foundation focused on helping women and children…if the company is sharing that activity in any way – with its employees, with key stakeholders, or end consumers, I include that in a broad definition of cause marketing.  You’ll hear the terms corporate foundation, community relations, corporate giving, corporate social responsibility (CSR)…in my view, it’s all generally part of cause marketing.

Companies are often afraid to admit that they have a business objective to their philanthropic work, whether that’s growing a pipeline of ideal future employees, selling more product, or just improving its reputation with certain audiences. But it’s that strategic focus that allows philanthropic programs to grow. Companies exist to make a profit, and so if their philanthropic efforts allow them to make more profits, then everyone wins – they have more to give away. Indeed, 91% of consumers believe that companies should support a cause, and yet most consumers think companies are not doing enough to tell them about their good works. Doing good and telling your core audiences about it, that’s cause marketing.

FS: I understand the term was actually coined by American Express in 1983 with the Statue of Liberty Restoration Project. I know this because I worked for them in a travel service office at the time. That campaign was quite a big deal. It helped raise awareness across the county for the cause and helped link the American Express brand to a beloved national landmark and symbol. How has cause marketing evolved since the early days?

LP: It’s so interesting to see how this category has grown in the last 25+ years. When the term was coined, it really was specific in its meaning – a transactional program whereby customers could unlock corporate donations by buying or using a designated product. It caught on as results of these programs were revealed – for example, American Express card usage went up 27% during the Statue of Liberty Restoration Project. Many companies saw this and wanted to follow suit. As such, many companies just put a nonprofit logo on their products, hoping for similar quick sales results. This wasn’t always good news, and savvy consumers put pressure on companies – wanting to sort out the programs genuinely committed to doing good, from those just looking for a quick sale by advertising something that wasn’t truly philanthropic and measureable. I’d say that’s one of the biggest transformations we’ve seen, the increasing demand for transparency … that understanding of “where is this money going?” and “what societal problem will it really solve?” More and more programs are trying to share specifics on how many trees will be planted, how many children will receive vaccines, and the like.

 The other big transformation has been the increasing accommodation for consumer choice. Consumers want companies to do good, but they also want to have a say in where the money goes. We’ve seen this most recently with competitions like the American Express Members’ Project and the Pepsi Refresh Project, where companies are really using cause marketing as a true engagement program…a tool to find out customer preferences and inspire peer-to-peer communication and referral.

FS: Do you feel that the recent economic climate has hindered the cause marketing “movement” or helped it and the driving factors behind it?

LP: I absolutely believe the recession has helped the industry, because it has caused companies to become more strategic with their spending. Spending in cause has continued to increase year-over-year and cause marketing has grown as an overall category during this time. It’s just that companies are now not as likely to sponsor your fundraising dinner as they are to look at their business objectives and say, you know, instead of giving $5,000 to 25 nonprofits, why don’t we go big and do something really strategic with one? One of the biggest challenges this industry has faced been proving business worth, and I think the industry has improved for the better because of this strategic focus.

Companies have such an opportunity to make a difference – they own the supply chains, the monetary resources, the intellectual capital – I would rather have corporate executives seeing philanthropy as a “must do,” instead of as a “nice to do”. And as more and more are now designing their philanthropic efforts to sync with their core business objectives, doing good is being integrated into the fabric of corporate operations – from recruiting, to vendor relations, to end consumer marketing and sales. It is no longer dispensable.

FS: What do you think are the top benefits cause marketing can provide to a business?

LP: A higher purpose for employees. Everyone likes to feel like their work means something – and cause marketing helps employees see that it truly does. Greater awareness for their brand. By having a real story associated with the brand, the brand becomes more relevant, newsworthy and interesting. Increased word-of-mouth and pass-along. Consumers are likely to tell friends about brands that they like, and they like brands that do good. More sales. There are dozens of case-studies showing the increases in sales that can result from well-executed cause marketing campaigns. These results do not often come overnight, but they do come.

FS: And for nonprofits?

LP: Increased awareness for the cause. Having a brand take on your cause gives you more arms and legs championing your story, and distributing your information. Passionate, engaged volunteers. If the company is championing a cause and even giving time off or matching funds to support it, those employees are great targets for long-term donors. Exposure to corporate best practices. Nonprofits that can deliver on corporate deadlines and reporting demands soar ahead of those that cannot. New revenue streams. Enough said!

FS: For most small businesses, they lack the resources and reach that a larger corporations have. What would you tell a small business owner who may be interested in helping a cause, but doesn’t have the marketing staff or budget to launch a campaign?

LP: You don’t need to do something big. You just need to do something meaningful and measureable. And then really share the results of what you’ve done. Even if you just help one person or one classroom, if you do it in a meaningful way and really integrate your products or services into the program, you have a great story to tell. Small companies always make the mistake of waiting to get strategic, rather then thinking about cause from the outset. You can build a brand around cause – look at the success of TOMS Shoes.

What questions should a business answer before they begin to develop a cause marketing campaign?

What are your business goals? What are your business goals? What are your business goals? That is THE question to ask. You need to be really clear about where the brand needs to go, and only then can you identify what causes will help you meet your goal. If you know your core business objective – for example, you need to own the teen market, or you need to get moms talking, or you need to find a key differentiation point from your larger competitor – then you can build a plan of what you need this program to achieve. And you should share those with your nonprofit partner and use that as a vetting tool. Your program will be more successful for it.

FS: And for a nonprofit?

LP: It’s the same question – what are our goals? Will a corporate partnership help us achieve those goals or take our eyes off the ball in the interest of more funding. Cause marketing partnerships are a lot of work for nonprofits. Companies have high expectations for their investments, and the nonprofit partner needs to truly determine whether helping that company meet its objectives will allow it to meet the nonprofit’s objectives as well, or just be a distraction.

FS: What should businesses be aware of? What are the “don’ts?”

LP: There are 3 big pitfalls to avoid in my book:

1. Quick promotions – consumers and savvy nonprofits are wary of the company looking for a quick boost to its sales figures by “using” a cause. If you care about it, make a long-term commitment and truly invest in change. You’ll see more results that way too.
2. Lack of transparency – don’t say “a portion of proceeds”. Be specific about how much you are giving away and where exactly the money is going. Let consumers know that you have a goal and a plan for how to reach it.
3. Lack of focus – don’t give to multiple issues without knowing why you are giving to each one, and what returns you expect for your investment. I have seen companies give away millions without knowing anything about what they actually changed in society. Focus on outcomes, not outputs. No one cares how much you are giving; they care about what that gift is going to get for society.

FS: Can you suggest any resources that may be available should any of our readers wish to learn more about cause marketing?

LP: There are tons of great websites and newsletters out there. A few of my favorites include: www.causemarketingforum.com – the Cause Marketing Forum is this industry’s go-to place for cause marketing resources, classes, conferences, support and best practices. Cone Inc. has annual reports and studies that provide great data and background. Their weekly newsletter “What Do You Stand For?” also does a great job capturing the newest campaigns and biggest issues. Edelman’s Good Purpose Group does an annual survey that is also chock-full of insights and resources.

FS: Thank you so much for sharing your perspectives on cause marketing.