Cause marketing is a temptation for many companies. You tie your brand to something bigger than your firm that you hope will resonate with customers and gain some name recognition while you do some good in the world at the same time. It can certainly work, but cause-marketing initiatives can also plummet to the ground like a coyote tied to an anvil in a Warner Brothers cartoon.
The potential pros and cons are even sharper for a middle market company, where a big win can be a great boost to business rather than something that gets lost in a massive revenue pool, but a mistake can turn into an ongoing PR nightmare.
Pros
Doing something that your customers want is generally a good idea. According to the 2013 Cone Communications Social Impact Study, more than ninety percent of consumers want companies to "support social or environmental issues in some capacity," while eighty-eight percent want to hear from companies about their efforts, and ninety-one percent want products, services, and retailers to support worthy issues, which is up eight percentage points since 2010.
Because middle market companies are more dependent on close relationships with customers than larger competitors are, connecting on an issue that people have a widespread awareness of can lead to a strengthening of those relationships. Do that with a cause that forms the right fit with your company, and you could end up with a hit campaign.
An example of a successful cause-marketing campaign is when the Vitamin Shoppe, a nutritional-supplements retailer that uses the tag line "Every Body Matters," partnered with the nonprofit Vitamin Angels. The latter delivers vitamin supplements to children in undeveloped countries to reduce childhood mortality. The marriage of company and cause was brilliant: a worthy cause that perfectly mirrored the commercial interests and core reason for existence of the supporting company.
Proponents of the cause-marketing concept say that companies can get significant benefits out of the activity, including improved company loyalty, enhanced employee loyalty, and better customer attraction and retention. In theory, your message and brand can also be amplified by those involved with the cause. People who are devoted to a particular cause are often dedicated and persistent, two extremely valuable qualities to have on your side and assist in a marketing campaign.
Cons
At the same time, a company can make the wrong decision when forming a partnership based around a cause. No matter what sort of campaign a firm is implementing, businesses focus on performance and results in the end. That can leave their efforts looking unaligned with what otherwise would seem a natural cause.
Canadian clothing chain Holt Renfrew made this mistake when it partnered with Italian fashion house Missoni in 2012 to support the charity OrphanAid Africa by selling limited editions of a plush toy bear and elephant. The animals would sell for $50 each, with a portion of the sales going toward a total donation goal of $100,000. Aside from the fact that there was little transparency to show exactly how much of the proceeds were being donated, OrphanAid Africa wasn't even a registered charity in Canada. It would have made more sense to support a charity that operated directly in Canada so consumers would be more likely to feel a connection with the cause.
Similarly, a company can take a huge hit when it looks as though it's only writing a check to buy goodwill. For a large company, the issue might be lost in the shuffle or at least only noticed by a small percentage of its total customer base (a base that, especially for a big firm, would be distributed among many brands and product types). For a middle market company with a more limited range of products or services, however, there is less of a chance of the problem being overlooked.
Designer label and clothing manufacturer Joseph Abboud experienced such a problem in 2010 when it joined with retailer Nordstrom to run a campaign to benefit victims of the major earthquake in Haiti by sending money to the charity Doctors Without Borders. The companies pledged a "portion of the proceeds" generated from suit sales over a week. Not only was there no transparency concerning the amount that would actually be sent, but limiting the promotion to a week with only one of the brand's retailers — not even at Joseph Abboud's own chain of stores — underscored that this would be a limited donation at best. Instead of making a company look charitable, an action like this is more likely to paint a firm as cheap in the eyes of consumers. It causes more damage than if the initiative hadn't been taken up in the first place.
Develop a Plan to Find the Right Match
Cause marketing isn't something you should take lightly. You'll need to develop a plan to make sure that the cause your firm is taking up is a worthy one that is properly aligned with your business. Consider whether a national or local cause would be best (your association with the former might not stand out on a larger scale, while the latter could provide greater attention in areas where your customers are focused).
Also, consider whether a corporate philanthropy angle might be better. Encouraging charitable action from within your firm (promoting employee volunteering, for example) can make a big impact.
How important are business partnerships when forming a cause-based campaign? Should midsized firms seek out a partner in these cases? Let us know what you think by commenting below.
Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek, the Financial Times, Chief Executive, Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.