What is Cause Related Marketing?

" A strategic positioning and marketing tool which links a company or brand to a relevant social cause or issue, for mutual benefit"

About Cause Related Marketing:

Who Benefits?

Cause Related Marketing has been around since American Express coined the phrase in 1983. That year the company launched a marketing program to donate a penny for each use of its credit card, and a dollar for each newly issued card toward the Statue of Liberty renovation program. Nearly $2 Million later, the company experienced a 28% increase in card use and the Statue of liberty project was closer to reality.

Since then corporations and businesses of all sizes have jumped on board, from companies such as Coca Cola, Macdonalds, Home Depot and Lancome to local mom -and pop businesses. With US sponsorship spending on cause related marketing expected to reach $3.8 Billion by 2016, according to the International Events group (IEG), something must be working.

Definition of Cause related Marketing?

Cause Related Marketing is defined as a "strategic positioning and marketing tool which links a company or brand to a relevant social cause or issue for mutual benefit, unlike corporate philanthropy which involves specific donations that are tax deductible. Cause related marketing is a market driven system incorporating product advertising and corporate public relations.

There are primarily six main types of cause related marketing.

Advertising.

When a business aligns itself to a particular cause and uses advertisements to communicate the cause's message, and public relations, when a business calls press and public attention to strategic partnership between itself and a nonprofit group.

Sponsorship.

When a business helps fund a particular program or event.

Licensing.

When a business pays to use a charity logo on its products and services.

Direct marketing.

When a business and nonprofit raise funds and promote brand awareness.

Facilitated giving.

When a business facilitates customer donations to the charity or itself.

Purchase- triggered donations.

When a company pledges to contribute a percentage or an amount of the product price to a charitable cause of organization.

How to differentiate between Cause Promotions and Cause Related Marketing

In a Cause Promotion a corporation provides funds, in-kind contributions or other corporate resources to increase awareness and concern about a social issue or to support fundraising, participation, or volunteer recruitment for a cause.

In Cause Related Marketing the benefits are:

Increased sales and marketing share

Strengthened brand positioning

Enhanced corporate image and clout

Increased ability to attract, motivate and retain employees

Decreased operating costs

Nonprofit organizations, on the other hand, can see such benefits as increased revenues; enhanced visibility of their causes or messages; connections to a corporations network of employees, suppliers, distributors and other contacts; and a wealth of corporate experience, including marketing expertise and strategy development.

A Strategic approach

As beneficial as these relationships can be, not all nonprofits are ripe for attracting corporate partners. Organizations must have something to bring to the table without expectations that business partners will do all the work while charities solely benefit. Nonprofit hoping to attract cause related marketing partners should do their homework and practice due diligence.

Figure out where the company can align with your organization, and find out commonalities. In your proposal, focus on the mutually beneficial relationship what is in it for your organization. Recommend rights and benefits for both sides. Present the marketing concepts and how the project will be executed and explain required budget and metrics to identify how successful it can be over time.

Ideally, nonprofits should focus on unrestricted revenue that can support existing core programs and services. There is no point in funding something new unless its part of your proposal and your strategic or business plan already includes it.

Leverage your partner relationships to gain from year round cause related programs, and always offer first right of refusal to expand what your existing corporate partners can do before seeking new ones.

When you acquire fewer high level, longer term partners, it will be easier to manage the relationships and deliver on promises.

When nonprofits take a strategic approach to these relationships, do their homework and present themselves in a business-like manner, cause related marketing can be a major win for them and the businesses which they partner.

Michael Morris President of the Social Strategy Group has been a Cause Related Marketing Consultant Since 1992. The Social Strategy Group is currently working with Elder Abuse Ontario to raise money and awareness to help stop the growing problem of Elder Abuse.

If you would like to learn more please email michael@socialstrategygoup.com or call 416-230-6181

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