The Ins and Outs of Cause Marketing

Cause marketing involves a partnership between a for-profit and a nonprofit organization that benefits both parties.

Have you ever purchased a particular product because the manufacturer promised to make a donation to a nonprofit organization for each product sold?

You’re not the only one. When faced with the choice between buying a regular product and one associated with a specific cause, the majority of consumers will pick the one associated with a cause, especially if the products are similar in terms of price and quality.

This tendency has given rise to a special subset of marketing. Cause marketing refers to mutually beneficial partnerships that can form between for-profit companies and nonprofit organizations.

A great example of this phenomenon occurs every October, when Yoplait products sport pink lids. Customers who purchase these specially marked products can redeem these lids for a donation to a breast-cancer charity.

Why Companies Engage in Cause Marketing

Nonprofits want to enter cause marketing partnerships because they reach new audiences through the for-profit corporation’s marketing and consumer relations. Exposure to new audiences broadens the nonprofit’s overall supporter base—and generates new sources of charitable dollars.

So what’s in it for the partnering corporation?

Through cause marketing, for-profit entities can foster goodwill among their target audiences by publicly demonstrating commitment to charitable causes. In addition, cause marketing helps corporations boost sales, differentiate their brands, and increase consumer preference for their products and services.

Cause marketing presents a win-win opportunity for both parties involved.

Types of Cause Marketing Partnerships

Cause marketing campaigns come in many shapes and sizes. There is no one “right” way to put them together; the two organizations must determine the program design that best fits their mutual parameters and objectives. Options abound, and here are a few:

• Transactional: The for-profit company agrees to donate a portion of its profits to the nonprofit organization. Often, this is tied to a specific product and runs for a limited period of time (such as the case with Yoplait’s pink lids). This type of campaign is relatively easy for corporations to implement, as it functions in much the same way as a price discount, except that the savings go to the nonprofit instead of the customer.
• Special Product: For-profit corporations create special products, all or part of the proceeds from which benefit the nonprofit partner.
• Service-for-Donation: A for-profit corporation offers a service for free or at a reduced cost and ask patrons to make a donation to a nonprofit partner in lieu of payment.
• Cash Register Donations: When you’re asked to donate to a specific cause or nonprofit at a cash register you’ve been asked to participate in this type of cause-marketing campaign.
• Icons: Icon campaigns ask patrons to donate funds to have their names displayed in the store on a paper graphic, such as a shoe, a four-leaf clover, or a pink ribbon.
• Joint Partnership: Joint partnerships bring a for-profit entity together with a nonprofit in a joint advertising effort. The nonprofit reaches a larger audience and saves money on a widespread advertising campaign and the for-profit ties itself to a good cause. A great example of this type of cause-marketing is the Food Network’s partnership with Share our Strength.

Factors that Affect Success

Typically, cause marketing efforts that succeed for all parties involved have the following parameters:

• Brand-cause fit: How well does the for-profit company’s brand align with the nonprofit’s cause? The most successful partnerships have brand-cause alignment. For example, it would make more sense for Pepperidge Farm to partner its Goldfish brand with an organization that supports children’s education than it would for the brand to partner with an organization that raises funds for research on Alzheimer’s disease.
• Perceived company intent: Why is the for-profit company entering into this particular partnership? Customers are more likely to participate in and support cause-marketing efforts if the for-profit company appears to be pure in its intentions—rather than just trying to polish its brand.
• Cause familiarity: People like what they know. Consumers are much more likely to support a familiar cause over something unfamiliar. Nonprofits that have done a good job promoting their causes and establishing their brands in the marketplace are better partners for cause-marketing efforts.
• Cause reach: In general, consumers tend to prefer causes that benefit their communities. This isn’t to say that national campaigns fail (see Yoplait’s example)—just that organizations need to factor this into their decisions to enter into partnerships. Toward this end, national companies have run cause-marketing campaigns country-wide and let individual stores or groups of stores select which local charities they benefit.

For an example of a cause-marketing campaign that FrogDog developed for a nonprofit organization supporting research for pediatric cancer, read our case study.

Need help developing a cause-marketing strategy? FrogDog has you covered!

Image courtesy of FreeDigitalPhotos.net/anankkml