Caring and winning – the future of successful cause-related marketing

David Grayson

 

Posted in: Consumers, Guest Writers, Speaking Out

Caring and winning – the future of successful cause-related marketing

October 01, 1999

“FREE INTERNET ACCESS FOR YOU. BIG NET GAINS FOR CHARITY” says the ad in my daily newspaper to-day: “now,” it goes on, ” you can access the internet free with outstanding service – while supporting your favourite charity. Just connect to Care4free, the unique new service provider supported by leading on-line names.”

As e-commerce booms and on-line shopping gets easier so that you can put your money where your mouse is, it is hardly surprising that cause-related marketing (CRM) should hit the Internet.

As my friend and colleague, Sue Adkins, explains in her new book 1 , CRM’s time has come. “Consumers,” she argues “are demanding greater accountability and responsibility from corporations. In an environment where price and quality are increasingly equal, where reputation and standing for something beyond the functional benefits of a product or service is all, brands are constantly competing for customer loyalty and consumer attention. CRM is one of the most exciting areas in marketing to-day which benefits both business and society.”

She has some powerful supporters. Fortune magazine has declared: “In the 21st century, branding will ultimately be the only unique differentiator between companies. Brand equity is now a key asset.”

Interbrand Newell and Sorrell concluded recently that 96% of Coca-Cola’s stock market value is intangible ($158 billion out of $164 billion). Kellogg’s is 97% and Amex’s 84%. Even IBM’s is 83%. Furthermore, the agency predicts that the proportion of the intangible valuation of companies represented by brands will rise from 5% in 1960 to 30% by 2000 and to 45% by 2010.

Veteran pollster, Bob Worcester, from MORI told the LEntA 20th anniversary conference in October that social and community activities are increasingly important for members of the public. The percentage of the public responding “very important” in answer to the question “when forming an opinion about a particular company or organisation, how important is it for you to know about their activities in society and the community?” rose from an already substantial 28% in 1998 to 36% in the latest 1999 survey. (The percentage answering “important” to the same question remained steady at 48% in 1999 versus 49% in 1998.

Bob Worcester also reported 1998 MORI results showing that 30% of the public claimed to have bought a product or service in the previous twelve months because of CRM.

A Cone Roper Teen Survey conducted in the USA this autumn shows that healthy pluralities of tomorrow’s consumers favour CRM, just like the regular annual Cone Roper surveys among adult consumers.

The CRM context

Sue Adkins’ book (and I have to declare an interest as a minor contributor) positions CRM in the context of marketing, corporate reputation, CSR, CCI, philanthropy and corporate fundraising. It pulls together a range of UK and international research studies bringing together arguments about who cares and why. It also expands on the BITC CRM Guidelines. The particular attraction for me is the wealth of practical examples – with many vignettes demonstrating different applications and nearly 20 in-depth case-studies from the UK and overseas – including some where the participants got it wrong.

Ironically, just as Sue’s book (and the latest offering from another friend – Making Money While Making a Difference: how to profit with a non-profit , by Richard Steckel – see publication reviews below) hit the bookstores, new voices are raised against CRM.

Writing in The New Statesman in October, for example, Francis Beckett slams Tesco ‘s Computers for Schools and similar programmes as boosting supermarket profits under the guise of community involvement. US journalist, Steven Manning, expressed similar concerns about the commercialisation of education in a recent article in Nation , America’s oldest weekly news magazine.

But other MORI data suggests that a healthy majority of consumers believe that it is OK for companies to get benefits for themselves as well as benefiting the community; given that the whole point of CRM is to generate net extra resources for the community over and above the budgets, this criticism rather misses the point.

On the other hand, it may be a warning of things to come if business does not clearly differentiate CRM from corporate philanthropy. It certainly reinforces the importance of adhering to the good practice guidelines which Sue and her colleagues on the BITC CRM Leadership Team have developed. (These are explained further in Sue’s book.)

Coherence and integrity

For me, one crucial issue in CRM is coherence and integrity (in the sense of consistency). Tesco’s programme, for example, has been refined over several years – and is now supplemented with substantial employee volunteering into schools and other CCI in the education field. All the time though, companies engaged in CRM need to be looking at how to achieve greater coherence. Tesco, for instance, might also recycle its own redundant computers into schools – and encourage businesses in its supply chain to do likewise.

In future, you might also imagine Tesco using its retail outlets to promote other information to parents and pupils – for example, when the revised National Curriculum is launched – especially if there are campaigns to popularise and get more national understanding and buy-in for the revised curriculum.

In short, like Sue, I expect CRM to evolve more into a wider CCI mix – whereby companies make full use of the 7Ps (premises, product, purchasing, people, power, profits as well as promotions) – what Tony Blair might call ‘joined up corporate citizenship’!

Sue also predicts less “promiscuity” with companies and NGOs forming more long-term partnerships. One partnership example she quotes in her chapter on the way forward is the Marks & Spencer -backed Children’s Promise. One of the significant points about this initiative (apart from its origins in consultation with M&S staff on what they wanted to mark the Millennium) is that it brings together a group of charities to work more substantially together in a strategic alliance. Indeed this follows M&S’s earlier efforts to bring together Crime Concern and The Groundwork Trust in a joint venture.

This role of corporate sponsors encouraging joint ventures and strategic alliances (if not full-scale voluntary sector mergers and acquisitions) is an under-developed area. Maybe in future, we will see more companies either individually or as part of a consortium saying to a group of charities in the same field: “we will work with you – including CRM – but only if you work together, because we believe that this will produce a more efficient use of scarce resources”.

This would be a powerful antidote to those who criticise CRM as encouraging companies to do their own thing and invent new organisations rather than building up and improving existing initiatives.

The wider prize will be if positive experience of CRM encourages more marketing experts to apply their expertise and skills and connections to helping NGOs to promote themselves and their causes.

(1) Cause-related marketing: Who cares wins, by Sue Adkins. Published by Butterworth Heinemann, £16.99, 308pp, ISBN 0-7506-4481-8. Available from Business in the Community (0171 224 1600) to whom a proportion of royalties are being donated.

(2) New Statesman – October 11, 1999: How to boost supermarket profits

(3) Nation – September 27, 1999: Students for Sale

Corporate Citizenship Briefing, issue no: 48 – October, 1999

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