Charity in business has usually been the preserve of a few bodies set up to pursue philanthropic aims. Examples are the Guinness Trust and the Joseph Rowntree Foundation. But rather than just doling out money for good causes, other companies are beginning to make their business targets an overt part of their partnerships with charities.
In fact, a cause-related marketing boom could be on its way. Research last year by the charity Business in the Community (BITC) showed that 70 per cent of marketing directors believed that cause-related marketing would play a more important role over the next two to three years. BITC claims that although this aspect of marketing offers a unique way of emotionally engaging the consumer, it remains a relatively untapped opportunity.
Corporate support for charities or causes often takes the form of a straightforward donation, organised by a staff member with little or no connection to the company’s marketing department. A different charity might get the money each year, and donations do not tie in with business aims.
But companies that wish to pursue cause-related marketing need to form a very different relationship with their chosen voluntary organisation. Such relationships can be long-term: for example, Tesco’s Computers for Schools campaign has been running since 1992, while Cadbury’s partnership with Save the Children was extended from two years to six.
Relationships also have to be put on a business footing. The Direct Agency account director David Burrows says: “Research encourages us to think that cause-related marketing is the way forward, but you have to get the execution right. You have to take it as seriously as any other marketing activity.”
Martin Le Jeune, associate director and head of the corporate ethics division at PR consultancy Fishburn Hedges, agrees: “I suspect cause-related marketing will become a growth area as it’s so powerful.
“But companies need to think beforehand about the partnership they want to generate, and not merely grab a charity off the shelf. They should think of it as a business deal from the outset, rather than do-gooding.”
When a business and a charity have a similar target audience, the relationship can benefit both partners. Nambarrie Tea Company, the Northern Ireland winner of this year’s Business in the Community award for excellence in cause-related marketing, chose to sponsor the breast cancer charity Action Cancer.
Not only was the charity tackling an important cause – Northern Ireland has the highest breast cancer rates in the world – but the company and the charity both aim to reach women aged 16 to 60. Nambarrie says its aims were “to rationalise charitable giving into one main focus, yielding a return on investment” and to ensure that sponsorship was local, with all proceeds staying in Northern Ireland.
During September and October last year, Nambarrie’s activities included releasing 100,000 specially-designed packs promoting its sponsorship of Action Cancer, and covering media costs for a TV advertising campaign during Breast Cancer Awareness month.
Nambarrie marketing manager Rosena McKeown explains: “This gave Action Cancer a direct marketing opportunity and TV coverage which it had never had before. Its target income from the campaign was &£150,000 but it actually received over &£200,000.” The company has signed a three-year deal with Action Cancer and is planning to increase investment and TV coverage in years two and three; it believes the return on its investment has been “enormous” in terms of brand awareness and benefits to its customers.
Choosing an issue which matters to your customers is a vital part of cause-related marketing. With its Computers for Schools campaign, Tesco has successfully run a national campaign with local relevance. Not only has its voucher scheme helped provide 34,000 computers to schools, but it has driven more traffic into stores and helped Tesco position itself as a caring company.
Maher Bird Associates planning director Richard Longworth says: “Tesco’s Computers for Schools is a fine example of cause-related marketing. Schools benefit, consumers benefit knowing their shopping is making a difference to their schools, and Tesco benefits from a scheme that motivates loyalty.”
However, cause-related marketing is not all beer and skittles, and companies that get it wrong could find themselves dealing with a high-profile disaster. Unilever’s attempt to link the sale of margarine with a certain memorial fund was a mistake that will be remembered.
Fishburn Hedges’ Le Jeune says: “The association of Flora and Diana was a classic mess, with Diana’s portrait and signature on packs of Flora. The dissonance between the concept of her lifestyle and margarine was great and turned customers off. The press comment was rather hostile at the time. With cause-related marketing you must make a good match.”
Le Jeune believes there also needs to be greater transparency about the amount of money being raised. He says: “Consumers are not slow to discover how much money is going to charity, and there have been some scams where the amount raised has been piffling, such as charity Christmas cards, where the donation was minimal. You need to get the financial relationship as transparent as possible.”
The Direct Agency’s Burrows cites the example of an NSPCC/Swelec door-drop which he believes was a “good idea which went wrong in the execution”. He explains: “Swelec chose to link with the NSPCC which was all well and good. But putting leaflets with the NSPCC logo and a headline such as ‘Please stop it, daddy’ through people’s letterboxes lead them to assume it was from the NSPCC. The campaign was confusing because Swelec pretended to be a charity. By being a little bit more thoughtful the impact would have been much greater.”
As cause-related marketing becomes more popular, it will be less easy for companies to use it as a means of setting themselves apart from the competition. An example of this is in the retail sector, where supermarkets are vying to be holier-than-thou. Sainsbury’s School Rewards scheme has been operational for three years, competing with Tesco’s Computers for Schools, Asda’s support for Breast Cancer Care and Iceland’s link with the National Missing Persons Helpline. The Co-operative Wholesale Society has now joined the fray with a &£400,000 deal with the NSPCC in June, for the “Co-op Putting Children First” campaign.
Chris Gribben, associate director of the Ashridge Centre for Business and Society, believes that those indulging in this type of competition will lose their edge after a while: “If you look at supermarkets and cause-related marketing, the question is whether it’s going to provide them with a sustainable point of differentiation.”
He believes that as time goes by, cause-related marketing will be more integrated with business policy: “Companies have been able to launch these campaigns almost irrespective of social responsibility in other areas, but there is real concern among the public that businesses are getting more powerful and cartels are forming. Companies need to balance commercial benefit with social benefit. I wouldn’t be surprised to see a much tighter fit between social responsibilities and cause-related marketing in future.”
This idea can already be seen in action with Sainsbury’s move to ban genetically modified foods. Gribben predicts companies will turn more to fair trade as the point of differentiation: “A lot of supermarkets and retailers are beginning to look at imbalances in their supply chains – for example, M&S came under real pressure over allegations that they were using child labour in the Third World.”
He also believes companies will need to shift focus from the money invested to the outcome of cause-related activities. How computers have benefited schoolchildren is more relevant, for example, than stating how much money has been spent.
Not every company can go as far as the Co-op Bank, which has held an ethical policy on human rights, the environment, the arms trade and animal welfare for the past seven years, and lets its customers steer cause-related activities. Jim Sinclair, head of marketing communications, comments: “Our customers give us feedback and tell us which organisations we should be working with. This October we are going to focus on the stigma associated with mental health problems, which has attracted a lot of response from customers.”
Although it is impossible for most companies to foreground issues of social conscience, it is clear that cause-related marketing can benefit both charities and businesses. It is a powerful tool which can no longer be ignored.
Key principles of cause-related marketing
Integrity: behaving honestly and ethically.
Transparency: misleading information could cast doubt on the equity of the partnership.
Sincerity: consumers need to be convinced about the strength and depth of a cause-related marketing partnership.
Mutual respect: the partner and its values must be appreciated and respected.
Partnership: each partner needs to recognise the opportunities and threats that the relationship presents.
Mutual benefit: for the relationship to be sustainable both sides must benefit.
Source: Business in the Community Cause-Related Marketing Guidelines
What cause-related marketing is worth
Donations still account for the majority of charities’ corporate income, but cause-related marketing has now nudged sponsorship out of second place. On-pack promotions and other types of cause-related marketing raised &£14.5m in 1998/9, more than double the 1997/8 figure. However, &£5.6m of this is attributable to Charity Project (Comic Relief). But without this, cause-related marketing still rose by 63 per cent.
Top 5 cause-related marketing earners
Charity Projects (Comic Relief) – &£5.6m
Unicef – &£1.9m
Breakthrough Breast Cancer – &£800 000
Tommy’s Campaign – &£800 000
RSPCA – &£600 000 (includes trading)
Source: Corporate Citizen, Spring/Summer 1999