Marketeers today are expected to don not only faces and personalities, but also hearts. Consumers are increasingly having a love affair with socially responsible firms, and why not?
DEFINING Cause-Related Marketing, or CRM, is not easy because it often gets confused with social issues marketing, cause-related promotions, corporate social responsibility and related terms — more so in a country buzzing with philanthropic activity.
An academic definition, however, may be something like this: Cause marketing requires an agreement between a non-profit and a for-profit organization to maximize perceived benefits to each partner. The for-profit partner is looking to associate its product with a perceived social good and thus boost its appeal to a defined market segment which shares that perception; increase a broader market segment’s perceptions of the enterprise as socially-engaged or responsible; and derive bottom-line benefits from increasing market share in the targeted segment.
Cause-related marketing, thus, becomes part of a company’s core business strategy and is directly tied to a range of business functions.
In 1983, American Express pioneered the CRM movement by donating a part of their customers’ charge card receipts to the refurbishment of the Statue of Liberty. While it was a very successful programme, it lasted only a few months, offered limited opportunity to build the brand and create enduring relationships with customers, which naturally is the ultimate purpose of all CRM activities.
Despite Am-Ex’s unique success, the practice was not widely accepted at first. Cynics chastized the strategy as gimmickry. However, by 1998, cause marketing had become common practice. According to International Events Group (IEG), corporate investment in cause programmes jumped more than 400 per cent, from $125 million in 1990 to $545 million in 1998.
CRM now is not only part of the company agenda on the international scene, but is also blatantly exhibited as the flag-bearer of a company’s policy — its slogan. Ford proudly claims to ‘make the world a better place’, and Walt Disney to ‘make people happy’. British Petroleum recently announced a brand name change to ‘Beyond Petroleum’, signalling a leadership role in moving civilization out of the fossil fuel area to a greener, safer environment.
The trend predicts that in the next century, ‘what do you stand for?’ will become one of the most commonly asked questions by potential donors, employees, investors and business partners before entering into any relationship. In this decade, marketeers are expected to don not only faces and personalities, but also hearts. Consumers are increasingly having love affairs with socially responsible companies.
And why not. When cause-related marketing pays off in more than one way, business are bound to pick up the practice, no matter how much critics scoff at the commercial aspects of it. Organizations the world over realize today that it is no longer about being just loosely associated with a cause or partnering with a non-profit organization. What matters is integrating the concern and commitment for a cause into a core component of an organization’s business strategy. Comprehensive social commitments have become an integral way to conduct business and a core component of corporate reputation, brand personality and organizational identity. Why? Because, to put it blatantly, the advantages are manifold.
While on the one hand cause-related marketing presents a way to ‘out innovate’ or ‘out advertise’ competitors in a marketplace increasingly saturated with new brands, it ensures brand loyalty among today’s increasingly hard-to-please consumers owing to a company’s proven commitment to a worthy cause. Other things being equal, many consumers would rather do business with a company that stands for something beyond profits.
Cause-related marketing also delivers other tangible benefits including, increased sales, increased visibility, enhanced company image and positive media coverage. Nine in 10 employees of firms associated with charitable causes feel proud of their companies’ good works; socially responsible activities apparently have significant effects on employee turnover, loyalty, and esprit de corps. As much as 87 per cent of employees of companies with cause programmes feel a strong sense of loyalty, versus two-thirds of workers in companies without a cause association.
In some cases, companies use their cause-associated efforts to target new customers. Proponents of CRM claim that a long, advertised record of community service also offers these enterprises greater customer acceptance of price increases, favourable publicity and helps win over skeptical public officials, who often hold keys to companies’ expansion plans.
On the local front, however, things are perceived and practised with a difference. On the one hand, where social marketing has become an effective way of motivating low-income and high-risk people to adopt healthy behaviour, especially in the fields of HIV/Aids prevention and maternal and child health care services — the Greenstar Key Programme, for instance — the definition and role of social marketing in Pakistan is still blurred in the minds of most multinationals, banks, market research companies and advertising agencies. Each comes up with his or her own definition — an interesting fact that came up in the course of gathering material for this piece. Some have absolutely no idea of what the term stands for!
Altruism, corporate responsibility, philanthropy — these words are often used to describe cause-related marketing. You could donate money to individuals or families as charity or zakat, like most organizations are doing; you could support foundations, charities or non-governmental organizations in furthering a social cause (like the Citizens Foundation); or go out and locate a cause worthy to be supported (UniLever Thar water project). You could do it anonymously or go all out with a big bang using media to paint the town red (remember the Ariel project!). Embracing a cause surely makes good emotional satisfaction as well as business sense (in 2004, Key Social Marketing increased sales by 30%), and not to ignore benefits like tax exemption!
What is difficult to pin down is the number of local companies involved with CRM, owing to an absence of any facts and figures or targeted research. And indulging in the chicken-or-egg discussion is also futile; suffice it to say, that on the local scene where one finds multinationals, like Unilever, Proctor and Gamble and ICI involved with the practice, local giants like Tapal and EBM are also pursuing cause-branding in their own unique way.
With smaller local companies, acts of philanthropy are understood and included under the aegis of social marketing. However, not everybody jumps on the bandwagon, although they may be associated with a social work, as it is termed. Only a tiny percentage is ‘cause-branders’, who take a long-term, stakeholder-based approach to integrating social issues into business strategy, brand equity and organizational identity.
And why so? For one thing, companies are still familiarizing themselves with the concept. For another, cause-branding takes a substantial amount of sophistication, time, effort and money. And there are potential pitfalls for being associated with social causes. There is a risk of mishandling or being wrongly projected in a media campaign. There is also a risk of misleading consumers about their relationship with a non-profit entity, and proving your integrity in the dissipation of funds. You can also end up wasting money by hooking up with a charity that offers little synergism. Quantifying social contributions is often difficult, plus there is no guarantee that allying with a cause will actually benefit companies.
However, scoffing at those who are into cause-branding may not pay in the long run. One should not ignore the fact that businesses are ultimately profit-driven. And profits today are a result of customer trust and loyalty. So if a company is building a good image, besides delivering a good product, what’s the harm? Why should social responsibility be scoffed at and qualified by anti-company mindsets. After all, at least some good is being brought about — the improvement of society and environment. Even a mild awareness towards social responsibility goes miles in inculcating long-term responsibility in a country where there are no consumer laws and accountability.
And, finally, what’s the harm in empowering and educating low-income people to lead healthier lives? Or ‘giving back’ to society what has been taken of it?
