Thoughts

The Strategy and Heart of Cause-related Marketing

by Maria Kalligeros, EVP Consumer Practice Leader

The desire to serve as a “catalyst for positive social change” is an integral part of CRT/tanaka’s business mission, and our CRM practice is a strategic and tactical expression of that desire. Over the years, we’ve learned a few things about the practice:

• CRM works. I’ve seen success time and again with many clients.
• CRM involves science as well as art. While you can and should use research and objective measurements, the best CRM programs ultimately are like (surprise!) good marriages filled with communication, commitment and shared values.
• CRM can seem confusing. CRM was born in 1983 when American Express launched its campaign to help restore the Statue of Liberty. (For every charge made during a specified period, the company made a donation to the statue).  Since then the practice has evolved greatly, however, even among professionals there are differences of opinion about just what cause-related marketing is and is not.

SO WHAT IS CRM?

In a nutshell, cause-related marketing is the strategy of linking a company, brand or product to a non-profit organization for a mutually beneficial purpose. A lot of people think of CRM as a short-term transactional sales tactic, that is: “buy our product, and we’ll make a charitable donation for every purchase.” But today, CRM has moved far beyond that model. The reality is that CRM is a long-term corporate strategy designed to enhance brand equity and corporate reputation. As such, it needs to be pursued in a consistent, ongoing way and supported with tangible results obtained for the cause involved.

Though a well-conceived and executed CRM program can drive sales, it’s critical for marketers to avoid the strong temptation to see CRM solely or even primarily as a sales-boosting tactic. 

To do so would undermine the credibility and perceived sincerity of a company’s commitment to the designated cause in the eyes of consumers and the media. The result would be a backlash and, in a worst-case scenario, charges of hypocrisy, opportunism and exploitation.

WHY USE CRM AS A MARKETING STRATEGY?

CRM has become a marketing staple since the concept was first introduced in 1980’s because associating brands with a relevant cause lends an additional nuance of differentiation to a brand in an overcrowded and ferociously competitive marketplace. Part of this nuance of differentiation is that, during the critical purchase decision process, CRM transforms mere consumers into proactive partners with the brand in addressing the cause involved. That’s one of the reasons why consumer surveys show that people say they will to pay more for a product from a company linked to a good cause.

The positive impact on brand equity of the emotional bond between consumer and brand is incalculable in terms of traditional business metrics such as quarterly earnings. And, in a well-designed and long-term CRM program, the emotional investment extends beyond consumers to include other constituencies critical to the success of a brand: employees, shareholders, retailers and the media.

In weighing job offers, for example, employees are increasingly factoring in a company record on Corporate Social Responsibility (CSR), which includes CRM. And, more and more investors say that commitment to social issues is important when they are deciding what stocks or mutual funds to purchase.

Clearly, then, CRM adds to brand equity in the long term, if not always in the short term. The stock market bust of the late 90s are a painful reminder of the financial and social havoc too much emphasis on the short term can cause.

THE AGENCY’S ROLE

Positive and widespread media coverage of a CRM program adds credibility while enhancing brand image. The impact of negative coverage however can permanently damage brand image. 

That’s why it’s important to involve a PR agency at the conception stage of any CRM program. CRT/tanaka’s CRM practice involves much more than simply publicizing or providing marketing support for client CRM programs. We contribute to the creative and strategic direction of client CRM programs from inception in ways which maximizes the chances for success while minimizing the potential for negative perceptions by stakeholders.

We come up with the ideas that speak to specific marketing objectives, refine them with the client, and bring them to life through carefully managed implementation.  Our participation at the operational level of a CRM program depends on the client’s internal resources. Regardless of our degree of implementation, we continually monitor, measure and liaise with nonprofits and the other partners to ensure accountability and the desired results.

Corporations or nonprofits that are looking to inaugurate a CRM program should identify an agency partner with proven experience in the field. It takes a long time to identify and assess all the ingredients that comprise a successful CRM programs. As an agency with a long-standing CRM practice, we have learned how to diplomatically navigate the waters between a corporation’s and a non-profit organization’s goals helping them to find common ground and reminding them of their mutual commitment to one another as the relationship matures.

CREATING A SUCCESSFUL CRM PROGRAM/SELECTING THE RIGHT CAUSE OR ISSUE FOR YOUR CLIENT

The first thing we do when we collaborate with companies is to establish criteria for selecting the right issue. Here are some things to keep in mind:

Be in alignment with the brand image and the target consumer’s values.  The designated cause must be consistent with the client’s brand image and business values. Just as important, the cause must be relevant to both the social environment and the brand’s target audience. If the brand is marketed primarily to women or women with young children, for example, is it a cause that speaks to the concerns of those consumers? Make sure there is a strong, substantiated alignment between the cause and key consumers.

Check if significant social change be made. Is the designated cause one where experts have identified ways to bring about change? If not, it may be hard for you to show success.

Partner with organizations that have a grassroots network. Change usually happens on a local level, so select a partner who can help bring about social change in local communities. Identifying a partner with a grassroots network will help create brand awareness and social change on a local level. At the same time, if you brand is national, the issue you chose should have broad national appeal.  

Ensure the commitment of top management. The success of a CRM starts at the top. Do your CEO and top management have a strong passion for the cause?  There is no faking it; there has to be sincerity that emanates from the highest levels of the organization. If not the CEO, a senior executive or internal “advocate” with the authority to engage the support of the organization (largely by making a long-term commitment to the designated cause) must embrace the program.

Engage your employees. Do your employees care about the issue? Your employees contribute to the buzz factor connected to your company and its activities. The more the designated cause matters to your employees, the more positive buzz they are going to give it.

Avoid a “crowded” cause. Some causes have become over-cluttered with sponsors and it may be hard for a brand to make an impact in the marketplace by aligning with such a cause.

Check what your competition is supporting. One way to differentiate your brand is to select a cause different from your competitors.

Establish strategic alliances with other for-profits. Sometimes a side benefit of a CRM program is the development strategic alliances with other non-competitive for-profit companies who are interested in supporting the same designated cause or issue as your brand.

Ensure newsworthiness either in the selection of a designated cause and/or in the program implementation. Obtain the support of the media by making your program as newsworthy as possible. For example, at our recommendation our client Liz Claiborne chose to become involved with domestic violence awareness in 1991 an issue no other large company was involved with, and which was therefore newsworthy.

DATING BEFORE MARRIAGE:  WHAT TO LOOK FOR IN CRM PARTNERSHIPS.

Once you’ve identified the issue that you want to support, it is critical to find the right nonprofit partner or partners. As stated earlier, this partnership is very much like a marriage, and to ensure future happiness you should know your partner very well. Your company’s reputation will be linked to their policies and positions – so I can’t stress enough the importance of doing your homework during the dating phase of the relationship before you formally sign a letter of agreement. 

Remember that communication, managing expectations, sensitivity, and diplomacy are all key ingredients in the partnership. You should look for:

A public charity with national credibility that understands the notion of partnership. The charity (and the corporation) must understand that they are both going to invest resources (staff time, funds or both). All things being equal, it is often advisable to partner with an organization that already has CRM-related experience.

Influential directors on a nonprofit’s board. They can often get things done in local communities or on the national stage, that otherwise would be difficult or very time consuming.

501(c) status. Verify that the nonprofit has a 501(c) status. This means the government has granted it nonprofit status for tax purposes.

Clearly organized web site. Take a look at the nonprofit's website. See if it is well-organized and professional, shows clarity of purpose and a methodology for action and it’s been associated with creative, successful CRM efforts in the past.

Enthusiastic liaison. Whoever the non-profit partner appoints to be your liaison should be an enthusiastic partner and have a clear understanding of your business mission and objectives of your CRM program.

Reasonably well-financed organization. You need a partner who is going to dedicate time to your program. A lot of charities are under-financed and may not have enough staff to dedicate to their own programs, let alone yours. Our clients have sometimes helped fund the salary of the non-profit staff person assigned to their corporate project. Keep in mind that corporate timelines and nonprofit timelines are very different, and things may not happen as quickly as you would like. An understanding of this and other differences is imperative.

Meeting in person. If you are considering a long-term partnership, you should meet in person and get to know the people at the nonprofit as well as you can. There is something that comes out of a face-to-face meeting that you just don’t get on a conference call. 

Letter of Agreement. Finally, once you have decided on a partner, sign a letter of agreement with a clear timetable, an outline of each partner’s responsibilities, and the desired results, deliverables and metrics for success. 

ESTABLISH METRICS FOR ASSESSING SUCCESS.

As part of the communication process, determine at the start how the program will be evaluated. CRM results can be measured in a variety of quantitative and qualitative ways, such as:

Quantifiable changes in social behavior. For both agency and client, it is critically important that the CRM program has a significant positive impact on the issue, and this impact must be quantified. Changes in perception and attitude about the issue, if not social behavior, is one of the most important measures of the effectiveness of a CRM program. A useful metric for quantifying this change is a survey before and after the start of your program to determine the extent of changes in perception and attitude and/or behavior. 

Increased positive consumer attitudes toward your brand. Unlike other components of the Corporate Social Responsibility Movement (CSR) movement of which CRM is a part, CRM programs are marketing-driven. Though the results of CRM programs are difficult to measure in the short term, they do contribute to both brand/corporate image, and these contributions are very important measures of the effectiveness of a CRM program. For example, you may want to survey consumer attitudes before and after the start of the CRM program to determine the positive impact of your program on brand equity and/or corporate image and reputation. 

Donations, if there is a fundraising element. If there is a fundraising element, certainly any donations raised can be measured. 

Increased sales. If sales increase, you may be able to measure whether or not that was a result of the program. This is a tough thing to isolate out and measure, though, as CRM may not be the only element in the marketing mix.

Web site hits. You can measure hits to the pages of the client’s site related to the program.

• Letters from consumers. Liz Claiborne has received hundreds of these letters, including letters from women who say they will never buy another brand of clothing as a result of the company’s CRM program.

Recognition and testimonials from "influentials." Liz Claiborne received recognition from the "ultimate influential" when its CEO was invited to the White House for a ceremony celebrating the passage of the 1996 crime bill.

Media impressions, ad value and publicity value. Measure and evaluate the media coverage generated.

Employee perceptions.

DEVELOPING & IMPLEMENTING THE PROGRAM

Involve your partners from the beginning. After choosing a partner(s), you engage all of them, including your PR agency, to develop and outline the program from conception.

Formally launch you program in a memorable way. Such a launch could take any number of forms, for example, an event, a press announcement, an online initiative, or a program you kick off on a retail-selling floor. The important thing is that the launch be newsworthy and generate excitement among all your partners and constituencies.

Continue refining your program. Once program implementation begins, continue to refine it as you move along. Timely responses or adjustments to changes affecting the world and your constituencies are key and need to be anticipated.

Refresh your program periodically. As a long-term proposition, a CRM program needs to be refreshed at least annually with new components that will help sustain the interest and commitment of your constituencies. One way to keep the program fresh is to continue doing research and talking to the experts to make sure that your initiatives remain aligned with the cause or the issue over time. Be very proactive in looking for new and fresh ways to approach the issue, thereby positioning your brand on the forefront of innovation and change.

Sustain the enthusiasm and commitment. Make sure your partners remain engaged and that the client stays enthusiastic about the program. It is especially important that the employees stay involved and motivated. Find ways for employees to volunteer for the cause or hold seminars to educate them about the issue.  Continue to monitor and adjust as the program moves ahead.

CHALLENGES AND MISCONCEPTIONS

One challenge for the corporation is expecting too much from the nonprofit. Understanding the limitations of the nonprofit and being sensitive to their challenges is key to success. Similarly, the nonprofit must understand that the corporation is undertaking the program for marketing purposes, but also to do good. The nonprofit should respect that the corporation is more than simply a source of funding, but can also contribute marketing savvy and broaden the nonprofit brand’s awareness and reach.

Another challenge or misconception that corporations have is that they need to spend a lot of money to get involved in an issue. Companies can get started in a small way by doing a pilot program before taking a campaign to a national level.

Sometimes companies make the mistake of not involving all their different units in the execution of a campaign. CRM programs can and should be fully integrated into all the company’s departments from marketing to sales to design to sourcing to HR to security to finance. This is how you bring a program to life within a company.

And finally, (particularly with an ongoing, long-term program) looking for newness in terms of the issue and evolving the program every year is another huge challenge to any successful campaign.

NOW IS THE TIME

Corporate America is under scrutiny like never before. Consumers are increasingly savvy and expect companies to step up to the plate in terms of social responsibility.  Honesty and transparency are key in today’s marketplace. Americans really want to hear about social programs and corporate citizenship programs from companies.

There are all kinds of rewards for companies that engage in CRM. And when I say rewarding I mean all kinds of rewards: not only the enhanced reputation and bottom line benefits for your company, but even more important, the chance to use your professional skills to make a positive difference in the world.