Principles and good practice for cause related marketing

“Cause related marketing should become a natural part of successful business practice because it is an effective way of enhancing corporate image, differentiating product and increasing both customer loyalty and sales. The challenge is for businesses, charities and causes to identify the appropriate partnerships, and then plan, implement and communicate them well. Cause related marketing is a potentially potent force that can provide benefits for all.”

Sir Dominic Cadbury, chairman of Cadbury Schweppes and founder Chairman of the Cause Related Marketing Campaign at Business in the Community.

Three years ago, we established the campaign to generate awareness and understanding of cause related marketing (CRM), promoting a greater quality and extent of programmes, encouraging business to use the marketing of their products and services to benefit charities or causes and the wider community. The campaign was founded by Sir Dominic Cadbury and Cadbury Schweppes and is sponsored by leading businesses such as BARCLAYS, BT, Cadbury, Centrica, DIAGEO, Lever Brothers, Research International (UK), The Marketing Society and is today chaired by Tim Mason of TESCO.

Having provided an original definition of CRM which many people use in the UK, we have developed this to emphasise the point that CRM can be initiated by charities, causes or businesses. It is not the domain of any one particular group. We therefore define CRM as

a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit. CRM is therefore an additional tool for addressing the social issues of the day by providing resources and funding whilst at the same time addressing business objectives. From the business perspective, this is essentially enlightened self-interest but is very much a two way street, with both company and community contributing and benefiting.

Consumer evidence

Consumers themselves welcome CRM and will alter their buying habits accordingly. Where price and quality are equal, our research(1) shows that a partnership between business and a charity or cause can strongly influence purchasers:

86% of consumers are more likely to buy a product that is associated with a cause or issue;

73% of consumers agree that they would switch brands and 61% agree that they would change retail outlets for the same reason;

86% of consumers agree that they have a more positive image of a business if they see it doing something to make the world a better place;

64% of consumers feel that CRM should be a standard part of a company’s business practice.

These figures show that a business which partners with a charity or cause has the potential to differentiate itself favourably to the consumer, can enhance its reputation and can build sales accordingly. Equally the charity or cause has the same potential opportunity, also raising funds and awareness.

Communicating the partnership is vital to reap the maximum benefit for all parties involved. Here our research(2) indicates that CRM remains an untapped opportunity: although welcoming CRM partnerships in principle, consumers are concerned to see mutual benefit. This is a delicate balancing act. Too low key an approach to communications can be interpreted as a lack of commitment to the partnership. At the same time, however, the business must not appear to exploit the cause for commercial motives. Consumers are quick to identify any imbalance between the business and the cause it supports.

Things can go wrong, therefore. A poorly executed CRM campaign can backfire and damage the reputation of the partner organisation and harm the work of the charity or cause involved. This is in no-one’s interest. That is why we have drawn the first set of Cause Related Marketing Guidelines(3). These Business in the Community Guidelines contain advice on the key principles which must underlie a campaign and set out the key elements in the process.

The principles

CRM needs to be approached with an open and honest attitude based on a moral and professional code of conduct. The key principles which should underlie a campaign are:

integrity – behaving honestly and ethically;

transparency – from initial conception to final implementation;

sincerity – with genuine belief in a mutually beneficial relationship;

mutual respect – for and by all partners involved;

partnership – a true joint venture;

mutual benefit – otherwise the relationship will not be sustainable.

The Elements

It is not possible to provide an exhaustive description of how to plan and execute a CRM partnership. But there are six key elements which must be professionally addressed in ways appropriate to the particular campaign.

1. Planning and preparation: this covers the process of finding a partner, defining the scope of the partnership and gaining commitment.

2. Negotiating the partnership: this includes aligning objectives, auditing assets (not just financial but also time, expertise and in-kind), defining the nature of the activity, placing a value on the opportunity and assessing the risks.

3. The formal agreement: this covers an understanding of legal responsibilities and liabilities, drawing up heads of agreement and clarifying tax and VAT.

4. Managing the programme: with clarity about the roles of the company, the charity and any third parties such as suppliers, agencies and consultants.

5. Communicating the programme: as emphasised above, getting the balance right is vital – apply the media test of how an investigative journalist would see it.

6. Monitoring, measuring and evaluating the programme: this is not necessarily expensive or time-consuming but is essential if success is to be judged.

Case studies

These Guidelines have been based on the actual experiences of companies, charities and causes already undertaking CRM programmes. Our recently launched first volume of case studies (4) covers several practical examples from TESCO, Cadbury, BT, Centrica, DIAGEO, Lever Brothers and London Electricity. The best known cause related marketing example is probably Tesco Computers for Schools.

Initiated in 1992 the programme encourages consumers to shop at Tesco and for every ?10 spent a voucher is provided. These vouchers are collected by schools and can be redeemed for computers and IT related equipment. From 1992 to 1997 Tesco has provided more than ?34 million worth of IT equipment, more than 29,000 computers and 147,000 peripherals, CD-ROMS and software packages.

CRM isn’t however only relevant to consumer markets. BT’s partnership with WWF illustrates how CRM can also be successful in business to business markets. Run in the last quarter of 1997, the aim was to increase sales of Call Diversion among business customers with between one and five lines and to raise ?25,000 for WWF. Promoted by direct mail to 200,000 companies, ?1 was donated to WWF (up to the ?25,000 ceiling) for every successful sign-up during the period. In the event, sales increased by 27% during the campaign and ?24,400 raised for WWF. Related benefits included very positive feed back from staff and good general media coverage.

Conclusion

CRM is undoubtedly an exciting area with great potential. Every CRM partnership is different, but well executed programmes can bring enormous rewards for all parties. By following the Business in the Community Cause Related Marketing Guidelines, companies are more likely to establish excellent and enduring partnerships which yield mutual benefits.

Note: 1: The Winning Game (published by Business in the Community November 1996, conducted by Research International (UK)/BMRB) gives the results of a large scale quantitative study.

Note 2: The Game Plan (published by Business in the Community November 1997, conducted by Research International (UK)) gives the results of a qualitative study among UK consumers, including focus groups, in-store interviewing and observation of shoppers.

Note 3: The Cause Related Guidelines: Towards Excellence (published by Business in the Community July 1998) provide detailed guidance on the principles and key elements of CRM.

Note 4: Cause Related Marketing: Case Studies Volume 1 (published by Business in the Community July 1998) details the actual experiences of seven companies CRM programmes, documenting the results.

Business in the Community also published The Corporate Survey (June 1996) with the results of a survey among 450 large UK companies on business attitudes to CRM.

All these publications are available from BITC on tel: 0171 224 1600 (or e-mail csermon@bitic.otg.uk)

Places are still available for Business in the Community’s 6th major CRM conference for marketing, community affairs and corporate fundraising professionals on 26 November 1998 in central London. This year’s conference will see the launch of new Business in the Community corporate research and bring together leading authorities on cause related marketing from around the world. Contact Michelle Hale at BITC for further details.

Corporate Citizenship Briefing, issue no: 42 – October 1998