Cause marketing takes the “sales” out of the sales pitch; it de-commercializes the commercial message; and it appeals to people at an emotional level. However, to be effective, a cause marketing campaign must be strategic.
Not only can being charitably involved convince your customers to purchase a product or service by leveraging the public's desire for companies to engage in socially responsible behavior, but it can drastically alter corporate culture and bolster employee morale.
Consider, for instance, Microsoft. Beginning in the late ‘90s and continuing through the turn of the millennium, Microsoft faced an onslaught of public relations nightmares brought on by the anti-trust lawsuits that accused the company of unfair competition, predator pricing, and wielding monopoly power. In short, the software giant was attacked for creating a popular product at a lower price than its competition. It was brought before the Justice Department and forced to unbundle its browser (Explorer) from its operating system (Windows). The scandal resulted in millions of dollars in legal fees. Though this caused only a dent in the company’s immediate profit, it had potentially significant long-term consequences. The company's customer base began resenting the corporate giant - charging it with greed.
Microsoft's brand seemed irrevocably tarnished: it was at a tipping off point.
The company fought back by becoming a do-gooder. At the height of the lawsuits in 2000, CEO Bill Gates, along with his wife Melinda, created the Bill and Melinda Gates Foundation (today the largest charitable foundation in the world) “to help reduce inequities in the United States and around the world.” And despite legal fees in the millions of millions, Microsoft more than doubled its charitable giving from $104.7 million in software and cash in the previous fiscal year to nearly $232 million, making it one of the top charitable corporations in the country in 2000.
It was on its way to a rebirth in public perception.
Today Microsoft has accomplished an about-face. Bill Gates is no longer a greedy corporate giant, but rather recognized as one of the nation's top philanthropists. And it is no coincidence that as this book goes to print, Microsoft's earnings are on the rise and the company recently added an additional 10,081 staff members to its forces another indicator that doing good deeds has done good things for Microsoft.
Giving and Getting: Cause Marketing as a Tool for Increasing the Bottom Line
We have found that engaging in a cause-related marketing campaign can be a potent boost to the bottom line. That said, we have found that increased sales usually go in tandem with other goals. The natural outcome of a cause marketing campaign is a trickle-down effect in which the campaign influences more than just the bottom line. A company might want to improve employee morale in an effort to improve the bottom line. In turn, the entire corporate culture of a company will change as the employees start finding meaning in their jobs. All companies want to avoid or limit crises and protect their bottom line. Many want to achieve heightened visibility to position it for acquisition, which will help its brand equity and financial positioning. In turn, the bottom line actually improves because not only was the crisis averted, but the company walked away with a better reputation than ever. You get the point.
Increasing sales is the primary reason for engaging in a cause marketing campaign.
The beauty of cause marketing is that it enables a company to de-commercialize a commercial message yet still benefit from an increased bottom line. Think of this: The public considers a for-profit company to exist simply to make money. The public considers a non-profit company to exist solely to give money away. Though neither of these assumptions can be blanketed across the board, they do provide for-profit companies with an opportunity to align themselves with organizations that are not seen as profit-driven. The consumer, therefore, becomes more open to hearing a commercial message. Though the message a cause-related marketing campaign sends to the media and consumers is never, “Buy our product/service,” a natural result of a media attention is almost always increased sales. The cause marketing campaign serves as a sort-of subliminal message, giving the consumer a reason to feel good about their purchase (and a break from the incessant commercial messages thrown their way). In addition, it gives the for-profit a story to tell as “advocate” for the charity. We’ll use the term advocate to describe the corporate partner’s role, as this can be a primary benefit it provides to tis not-for-profit partner.
Steve Garrigan, partner of Aspen East Fitness and Well Being Center, a small gym in Montclair, New Jersey, wanted to boost awareness in the media about his fitness facility so as to increase membership and, in turn, revenues. Partnering with the Spina Bifida Research Resource, a non-profit searching for a cure this disabling birth defect that affects approximately 70,000 Americans, Aspen East in conjunction with our firm created a media event that garnered extensive television and newspaper coverage.
The partnership created an annual event in the gym’s parking lot whereby spin cycles were peddled by the public, the Aspen East Cycling Team and gym members for 100 consecutive hours. Since these spin cycles were in constant motion for 100 hours, as cyclists took turns riding the bikes and raising funds for spina bifida research, several media/photo opportunities were created, and the fitness center enjoyed constant exposure through a guerilla-like marketing strategy. the PR event press release or media alert was headlined “Spin for Spina.” The event resulted in a 30 percent increase in Aspen East’s year-to-date membership and training sessions. (it was quarterly sales I think – please read prior sentence on this campaign)
But the media, which covered the event in droves, did not tell a commercial message advertising the gym. Instead, it featured the event as a “feel-good story,” applauding the gym for raising money for such an important disease. In fact (we use “in fact” a lot – what other transitions can we use JB?), the campaign focused on the company giving instead of receiving. Members, new and old, spoke of the event for months afterward, and the fitness centered has mimicked the event annually and because of the different cyclists (human interest stories), and great photo op, media flocks to the event.
Though Aspen East enjoyed a variety of outcomes, all of them were driven by one common goal: to increase its visibility in order to improve sales. A successful cause marketing campaign will attract media attention, which translates into a better bottom line. A successful cause marketing campaign will build a company’s brand, which means greater awareness of the company and higher sales, particularly because consumers and customers are more interested in conducting business with charitably involved corporations than non-charitable-minded corporations.