Lately, consumers have been seeing red. To be more specific, Product (RED), the brainchild of singer/activist Bono and DATA co-founder Bobby Shriver. Product (RED) is an initiative to raise awareness and funds for The Global Fund to Fight AIDS, Tuberculosis and Malaria by enlisting popular brands to create unique (RED) products, such as iPod nano (RED), American Express (RED) card, or (RED) MOTORAZR cell phone, with a percentage of the sales from each (RED) product going to The Global Fund.
The (RED) campaign is a fresh example of how companies are trying to connect with their stakeholders through cause marketing and has served to build momentum and win over skeptics to the practice. Cause marketing aligns a for-profit with a non-profit to achieve reputational and financial benefits while advancing a social mission. Cause marketing is increasingly relevant in today’s business environment as consumers, stockholders and investors are calling on companies to become more transparent, authentic and relevant in their approach to corporate citizenship. Now, more than ever, corporate America is being challenged to align their corporate values and behavior with the expectations and needs of stakeholders and society.
Positive Impact on Company Reputation
APCO works with many corporate clients to develop and leverage their investments in strategic philanthropy, while we assist other clients in their exploration of a more comprehensive commitment to corporate responsibility through their business operations and goals. Cause marketing is a third approach to help positively impact a company’s social and business reputation. Cause marketing is not a replacement for good corporate citizenship and transparency, but it can be an effective way to enhance existing efforts. Using cause marketing most effectively, as a marketing strategy, can help reinforce corporate contributions programs and enhance commitment to responsible business practices. Many corporations are employing cause-related and/or social marketing tactics to extend their communication platform, and they are seeing measurable results.
In 1999, Whirlpool was struggling to grow its market share in a flat industry by improving consumer brand loyalty. Whirlpool recognized that its existing relationship with Habitat for Humanity supported the company’s brand strategy and decided to leverage the partnership to establish an emotional connection with the customer that would help it achieve its business objective. Since then, Whirlpool’s support for Habitat has grown from donation of a refrigerator and range to every Habitat home to include a national advertising campaign featuring Reba McEntire as well as national employee engagement activities. Whirlpool has shared that the Habitat relationship has significantly driven loyalty, improving the company’s Customer Loyalty Index from a baseline of 15 percent to 24 percent.
In a 2005 PRWeek survey, 87 percent of corporations polled believe cause branding partnerships build a positive corporate reputation and 80 percent of corporations believe cause branding can help enhance relationships with target demographics. Additionally, 71 percent of corporations believe that a poor corporate reputation can be improved through cause marketing programs. The field is growing, too. The IEG Sponsorship Report, which has been tracking cause marketing spending for several years, reported a 20 percent increase in spending from 2005 to 2006.
Cause-related marketing has become more sophisticated since the first widely-recognized campaign in 1983 when American Express engaged its cardholders to support the restoration of the Statue of Liberty by donating a penny every time its charge card was used. Over the last 25 years, the practice has become more nuanced, expanding to include new objectives and approaches.
Successful Campaigns Rely on Research and Analysis
Product (RED), Above the Influence and ecomagination (see sidebar) are three campaigns that are known and admired for the creative way in which they tell their stories. However, these three campaigns have succeeded in large part due to the strategic way in which they identified not only target audiences, but also social objectives and, in some cases, partnerships.
The most successful cause marketing campaigns are built upon comprehensive research and strategic analysis to identify the best potential non-profits and social issues (for corporations) or products and corporate brands (for non-profits). This research is driven by several key questions that are asked of all parties, regardless of their “profit” status: What do you want to achieve? Whom do you want to reach? How do you want to be perceived? The answers illuminate the similarities or gaps between potential partners and help hone in on organizations that best align with your brand image and target audience. Cause marketing isn’t charity; non-profits lend the credibility of their mission to the corporate partner in exchange for promotional exposure. For a campaign to be successful, it also must be believable, and this begins with a logical connection between the parties involved.
One particularly successful partnership was born when Reading Is Fundamental (RIF) embarked on developing a targeted communication campaign to encourage parents and caregivers to read with their young children for at least 15 minutes each day. RIF developed a short list of companies that targeted a similar audience and that shared a complimentary brand essence and personality. RIF found a great match in Colgate-Palmolive, a company that was looking to reinvigorate its back-to-school promotions and offered multiple channels to publicize the message, including product packaging, in-store displays and product advertising. The campaign advanced both groups’ agendas by promoting reading and tooth brushing as healthy bedtime routines and offered targeted resources such as a Web site where parents and children could track their routine in a reading and brushing log.
The recent media attention surrounding revenue figures for the Product (RED) campaign highlights another critical cause marketing partnership best practice: Both corporations and causes must invest the time before initiating a campaign to establish standards of transparency. For all parties involved, credibility can be at stake unless these standards are upheld throughout the campaign.
Organizations interested in cause marketing are encouraged to conduct thorough research at the outset to help prepare for and address these common challenges. Research can help assess public opinion, recommend issue direction, analyze and vet prospective partners, identify potential risks to the business and lay the groundwork to develop an authentic and successful cause marketing campaign.
This article was written by Tara Greco, senior associate in APCO Worldwide's corporate responsibility practice and Lucy Seche, manager in APCO Worldwide’s corporate responsibility practice. It wasa excerpted from the PR News Crisis Management Guidebook, Volume 2. To order a copy, visit the www.prnewsonline.com/store.