Glossary

11.4 Cause-related marketing

8 min read•august 21, 2024

blends business goals with social responsibility, creating mutual benefits for companies and causes. It involves partnerships between businesses and nonprofits, linking purchases to donations, and integrating cause support into brand identity.

Unlike traditional marketing, cause-related marketing focuses on social value alongside economic gains. It builds through shared values, incorporates social impact metrics, and requires longer-term commitments to causes than typical promotional campaigns.

  • Cause-related marketing (CRM) integrates social responsibility into marketing strategies
  • Aligns business objectives with social causes to create mutual benefits
  • Bridges the gap between corporate interests and societal needs in marketing campaigns

Key elements of CRM

Top images from around the web for Key elements of CRM

  • Strategic Opportunity Matrix | Principles of Marketing [Deprecated] View original

    Is this image relevant?

  • Creating the Marketing Strategy | Principles of Marketing View original

    Is this image relevant?

  • Strategic Opportunity Matrix | Principles of Marketing [Deprecated] View original

    Is this image relevant?

1 of 3

Top images from around the web for Key elements of CRM

  • Strategic Opportunity Matrix | Principles of Marketing [Deprecated] View original

    Is this image relevant?

  • Creating the Marketing Strategy | Principles of Marketing View original

    Is this image relevant?

  • Strategic Opportunity Matrix | Principles of Marketing [Deprecated] View original

    Is this image relevant?

1 of 3
  • Strategic partnerships between businesses and nonprofit organizations
  • Clear association between product purchases and charitable donations
  • Transparent communication of the social impact to consumers
  • Mutually beneficial outcomes for both the company and the chosen cause
  • Integration of cause support into the overall brand identity and messaging

CRM vs traditional marketing

  • Focuses on creating social value alongside economic value, unlike traditional marketing
  • Emphasizes emotional connections with consumers through shared values and social concerns
  • Incorporates measurable social impact metrics in addition to standard marketing KPIs
  • Requires longer-term commitment to causes compared to short-term promotional campaigns
  • Involves more stakeholders, including nonprofit partners and beneficiaries of the cause
  • Enhances overall marketing effectiveness by adding a purpose-driven dimension
  • Creates opportunities for positive brand differentiation in competitive markets
  • Aligns with growing consumer demand for socially responsible business practices

Advantages for businesses

  • Improves brand image and reputation through association with meaningful causes
  • Increases customer loyalty and retention by aligning with consumer values
  • Boosts employee morale and attracts talent who value
  • Provides access to new markets and demographics interested in social causes
  • Generates positive media coverage and word-of-mouth marketing

Advantages for nonprofits

  • Increases funding and resources for their causes through corporate partnerships
  • Expands reach and awareness of their mission to a broader audience
  • Gains access to corporate expertise in marketing and business strategies
  • Enhances credibility through association with reputable brands
  • Develops long-term relationships with corporate sponsors for sustained support

Impact on consumers

  • Influences purchasing decisions by adding a feel-good factor to transactions
  • Increases brand trust and loyalty when CRM efforts align with personal values
  • Provides an easy way for consumers to support causes through everyday purchases
  • Raises awareness about social issues and encourages further engagement
  • Can lead to behavior change and increased individual social responsibility
  • Requires careful planning and alignment with overall business strategy
  • Involves cross-functional collaboration within the organization
  • Necessitates thorough research on potential causes and nonprofit partners

Selecting appropriate causes

  • Choose causes that align with the company's core values and brand identity
  • Consider the relevance of the cause to the target audience and product offerings
  • Assess the potential impact and measurability of support for the chosen cause
  • Evaluate the credibility and track record of potential nonprofit partners
  • Ensure the selected cause has long-term viability and room for growth

Partnership strategies

  • Develop clear agreements outlining roles, responsibilities, and expectations
  • Establish open communication channels between corporate and nonprofit teams
  • Create joint marketing plans that leverage each partner's strengths
  • Implement regular review processes to assess partnership effectiveness
  • Consider multi-year commitments to build trust and demonstrate dedication

Campaign development process

  • Conduct market research to identify consumer interests and cause preferences
  • Set specific, measurable goals for both business and social impact outcomes
  • Design creative campaign elements that effectively communicate the CRM message
  • Develop a comprehensive media strategy across various channels
  • Create internal training programs to ensure employee understanding and support
  • Vary in structure, duration, and level of integration with business operations
  • Can be tailored to fit different business models and cause partnerships
  • Range from short-term promotions to long-term strategic initiatives

Transaction-based programs

  • Donate a specific amount or percentage of sales to a cause with each purchase
  • Often use "buy one, give one" models (TOMS Shoes)
  • Can include roundup programs at point of sale for customer donations
  • May feature limited-edition products with proceeds benefiting a cause
  • Require clear communication of donation amounts and beneficiary information

Message promotion campaigns

  • Focus on raising awareness for a cause through marketing channels
  • Utilize advertising space, social media, and packaging to spread cause messages
  • Often involve co-branded content creation with nonprofit partners
  • Can include advocacy for policy changes related to the cause
  • May not involve direct financial transactions but leverage brand reach

Licensing agreements

  • Nonprofit organizations allow use of their name or logo on products for a fee
  • Companies gain credibility and appeal through association with respected causes
  • Often involve strict guidelines for brand usage and quality control
  • Can include co-developed products that align with the cause's mission
  • Require careful management to maintain authenticity and avoid overcommercialization
  • Demonstrate the potential for significant impact when executed effectively
  • Serve as case studies for best practices in CRM implementation
  • Inspire innovation and creativity in cause-related marketing strategies

Notable corporate campaigns

  • raised $1.7 million
  • Patagonia's "1% for the Planet" commits 1% of sales to environmental causes
  • Dove's "Real Beauty" campaign promotes body positivity and self-esteem
  • () partnership with multiple brands to support HIV/AIDS programs
  • Warby Parker's "Buy a Pair, Give a Pair" program for vision care

Small business CRM initiatives

  • Local restaurants partnering with food banks to address community hunger
  • Independent bookstores supporting literacy programs through book drives
  • Craft breweries collaborating with environmental groups on water conservation
  • Boutique clothing stores hosting charity fashion shows for women's shelters
  • Family-owned hardware stores sponsoring community build projects
  • Requires careful navigation to maintain credibility and effectiveness
  • Presents potential risks to brand reputation if not executed authentically
  • Demands ongoing adaptation to changing social expectations and causes

Authenticity concerns

  • Risk of perceived "cause-washing" if commitment appears superficial
  • Challenges in aligning cause support with overall business practices
  • Potential backlash if the company's actions contradict the supported cause
  • Difficulty in communicating genuine intentions in a skeptical market
  • Importance of long-term commitment vs short-term promotional tactics

Balancing profit vs social impact

  • Tension between maximizing donations and maintaining business profitability
  • Challenges in allocating resources between cause support and other business needs
  • Potential conflicts between shareholder expectations and social responsibility goals
  • Navigating the appropriate level of cause integration into core business model
  • Addressing concerns about exploiting social issues for commercial gain

Measuring campaign effectiveness

  • Complexity in attributing business outcomes directly to CRM efforts
  • Challenges in quantifying social impact beyond financial contributions
  • Need for developing appropriate metrics that capture both commercial and social value
  • Difficulty in assessing long-term effects on and loyalty
  • Importance of transparent reporting to maintain stakeholder trust

Consumer perceptions of CRM

  • Vary widely based on individual values, experiences, and cultural contexts
  • Influence the success and effectiveness of cause-related marketing campaigns
  • Evolve over time with changing social norms and expectations

Factors influencing consumer response

  • Perceived fit between the brand and the supported cause
  • Transparency in communicating donation amounts and impact
  • Consumer's personal connection or prior experience with the cause
  • Overall reputation and track record of the company in social responsibility
  • Perceived authenticity and long-term commitment to the cause

Demographics and CRM reception

  • Millennials and Gen Z show higher engagement with cause-related marketing
  • Women tend to be more responsive to CRM initiatives than men
  • Higher education levels often correlate with increased support for CRM
  • Urban consumers generally show more awareness and interest in CRM campaigns
  • Cultural differences impact cause preferences and CRM effectiveness globally
  • Crucial for maintaining trust and avoiding regulatory issues
  • Require careful attention throughout the CRM planning and execution process
  • Involve multiple stakeholders, including legal teams, nonprofit partners, and regulators

Transparency requirements

  • Clear disclosure of donation amounts or percentages in marketing materials
  • Accurate reporting of funds raised and distributed to causes
  • Compliance with country-specific regulations on charitable promotions
  • Proper documentation of partnerships and financial transactions
  • Clear communication of any limitations or conditions on donations

Avoiding greenwashing accusations

  • Ensure environmental claims are substantiated and verifiable
  • Avoid vague or misleading statements about sustainability efforts
  • Provide specific, measurable information about environmental impact
  • Align overall business practices with promoted environmental values
  • Engage in ongoing environmental initiatives beyond marketing campaigns
  • Reflect evolving consumer expectations and technological advancements
  • Shape the future landscape of corporate social responsibility
  • Present new opportunities and challenges for marketers and nonprofits

Technology integration in CRM

  • Use of blockchain for transparent tracking of donations and impact
  • Augmented reality experiences to visualize cause impact in real-time
  • AI-powered personalization of cause recommendations for consumers
  • Social media integration for viral cause campaigns and peer-to-peer fundraising
  • Mobile apps facilitating micro-donations tied to daily activities

Evolving consumer expectations

  • Demand for more direct involvement in choosing causes and allocating funds
  • Preference for ongoing, integrated CSR over one-off CRM campaigns
  • Increased scrutiny of corporate practices beyond marketing messages
  • Expectation of measurable, long-term impact from cause partnerships
  • Desire for personalized cause engagement aligned with individual values

Evaluating CRM campaign success

  • Essential for justifying continued investment in cause-related marketing
  • Provides insights for improving future campaigns and partnerships
  • Demonstrates accountability to stakeholders and supports transparency

Key performance indicators

  • Sales lift attributed to CRM campaign
  • Social media engagement and sentiment analysis
  • Brand perception shifts pre- and post-campaign
  • Employee satisfaction and retention rates
  • Funds raised or resources allocated to the cause

Long-term impact assessment

  • Tracking changes in consumer loyalty and lifetime value
  • Measuring sustained awareness and support for the cause
  • Evaluating improvements in and reputation over time
  • Assessing the development of the partnership with the nonprofit
  • Analyzing the broader societal impact of the combined efforts

Key Terms to Review (28)

American Express Statue of Liberty Restoration Project: The American Express Statue of Liberty Restoration Project was an initiative that began in the 1980s to restore and preserve the Statue of Liberty, a symbol of freedom and democracy in the United States. This project exemplifies the concept of cause-related marketing, as American Express linked its brand to a major cultural landmark, helping to raise funds and public awareness for the restoration efforts while enhancing its own corporate image.
Brand equity: Brand equity refers to the value that a brand adds to a product or service based on consumer perceptions, experiences, and associations. This value influences consumer behavior, affects their decision-making process, and plays a crucial role in how brands position themselves in the market and communicate their value propositions.
Brand loyalty: Brand loyalty refers to the tendency of consumers to consistently prefer one brand over others, leading to repeat purchases and a strong emotional connection with that brand. This behavior often stems from positive experiences, perceived value, and trust in the brand, creating a lasting commitment that influences consumer behavior and market dynamics.
Brand perception: Brand perception refers to how consumers view and interpret a brand based on their experiences, emotions, and the information available to them. This perception can be influenced by various factors including marketing strategies, advertising, public relations, and even social media presence. Ultimately, brand perception shapes consumer attitudes and behaviors toward a brand, impacting loyalty and purchase decisions.
Cause fatigue: Cause fatigue refers to the diminishing effectiveness and engagement consumers experience when they are constantly exposed to marketing campaigns that promote social causes. This phenomenon occurs when consumers become desensitized or overwhelmed by the sheer volume of cause-related marketing efforts, leading to a decline in their willingness to support or engage with such initiatives.
Cause-related marketing: Cause-related marketing is a strategy where a company partners with a nonprofit organization to promote a social or charitable cause while simultaneously enhancing the company's sales and brand image. This approach benefits both parties: the nonprofit gains financial support and visibility, while the company strengthens its public relations and builds consumer loyalty through ethical alignment.
Co-branding: Co-branding is a marketing strategy that involves two or more brands collaborating to create a product or service that features both brand identities. This partnership can enhance brand equity, leverage each brand's strengths, and appeal to a broader audience by combining their target markets. Co-branding can take many forms, such as ingredient branding, joint promotions, or co-created products, ultimately aiming to create a unique value proposition for consumers.
Coca-Cola Foundation: The Coca-Cola Foundation is the philanthropic arm of The Coca-Cola Company, focusing on community support and sustainable development initiatives worldwide. It aims to enhance the well-being of communities through various programs, aligning its efforts with the company's broader commitment to social responsibility and cause-related marketing. This foundation emphasizes partnerships with local organizations to address issues such as water stewardship, women's empowerment, and community well-being.
Consumer activism: Consumer activism is the practice of consumers organizing to influence companies and government policies on issues like product safety, ethical sourcing, and environmental sustainability. This form of activism empowers consumers to demand accountability and transparency from businesses, often leading to changes in corporate practices and policies that align with social and ethical values.
Corporate Social Responsibility: Corporate Social Responsibility (CSR) is a business model where companies integrate social and environmental concerns into their operations and interactions with stakeholders. It emphasizes the importance of businesses taking responsibility for their impact on society and the environment, going beyond profit-making to create positive change and contribute to societal goals.
Dove's Real Beauty Campaign: Dove's Real Beauty Campaign is a groundbreaking marketing initiative launched by Dove in 2004 aimed at redefining beauty standards and promoting body positivity. The campaign challenges traditional beauty ideals by featuring real women of diverse shapes, sizes, and ethnicities in its advertisements, fostering a more inclusive representation of beauty. This approach not only enhances brand loyalty but also aligns with consumer values around authenticity and self-acceptance.
Emotional Connections: Emotional connections refer to the bonds formed between individuals or brands based on feelings, experiences, and shared values. In marketing, establishing emotional connections is essential for fostering brand loyalty, as it helps consumers feel a sense of belonging and attachment to a brand's message or cause. By leveraging these emotional ties, companies can effectively engage customers and differentiate themselves in a crowded marketplace.
Greenwashing: Greenwashing refers to the deceptive practice of marketing products, services, or companies as environmentally friendly when they are not, often to attract environmentally conscious consumers. This strategy can undermine genuine sustainability efforts and mislead consumers who are trying to make responsible purchasing decisions. Companies may use greenwashing as a way to enhance their brand image without making meaningful changes to their operations.
Licensing Agreements: Licensing agreements are legal contracts that allow one party to use the intellectual property of another party under specified conditions. These agreements often outline terms for the use of trademarks, patents, or copyrights, facilitating partnerships and brand collaborations. They are crucial in various marketing strategies, especially in cause-related marketing and navigating the regulatory environment, as they ensure that all parties involved adhere to legal standards while promoting shared values or initiatives.
Message promotion campaigns: Message promotion campaigns are marketing efforts specifically designed to communicate a brand's message while also aligning with social causes to create a positive impact. These campaigns aim to resonate with consumers on an emotional level, fostering brand loyalty by showing a company's commitment to social responsibility. Often, these campaigns leverage partnerships with non-profits or community initiatives to enhance credibility and engage consumers in meaningful ways.
Patagonia's 1% for the Planet: Patagonia's 1% for the Planet is a commitment by the outdoor apparel company Patagonia to donate 1% of its sales annually to environmental causes. This initiative emphasizes corporate social responsibility and aligns with the brand's values of sustainability and environmental stewardship, showcasing how businesses can actively contribute to environmental conservation while fostering customer loyalty.
Purpose-driven branding: Purpose-driven branding is a marketing approach that focuses on aligning a brand's mission and values with social or environmental causes, emphasizing the positive impact a company can have on society. This type of branding goes beyond just selling products or services; it seeks to create a deeper connection with consumers by showcasing commitment to meaningful causes, which can enhance customer loyalty and brand perception.
Red: In the context of cause-related marketing, 'red' refers to a branding initiative that highlights the fight against AIDS and supports related charitable causes. It connects consumers to a greater purpose by encouraging them to purchase products from participating brands, with a portion of profits directed toward AIDS awareness and prevention programs. This initiative emphasizes social responsibility and the impact that consumer choices can have on global health issues.
Red Nose Day: Red Nose Day is a fundraising campaign created by Comic Relief that aims to raise money for various charitable causes, particularly focusing on children living in poverty. By encouraging people to wear red noses and participate in comedic activities, the event not only generates funds but also raises awareness about social issues. This combination of humor and philanthropy plays a vital role in engaging the public and creating a sense of community around charitable giving.
Return on Investment (ROI): Return on Investment (ROI) is a financial metric used to evaluate the profitability of an investment relative to its cost. It helps businesses assess the effectiveness of their strategies, campaigns, or projects by measuring the return generated for every dollar invested, making it crucial for decision-making in various marketing efforts.
Social Impact Theory: Social Impact Theory suggests that the influence of individuals on each other is a function of the number of people present, their strength (importance), and their immediacy (proximity) to those being influenced. This theory is crucial in understanding how people can be motivated to engage in cause-related marketing initiatives as it highlights the importance of social dynamics in shaping behavior and attitudes towards social issues.
Social Marketing: Social marketing is a strategy used to influence behaviors that benefit individuals and communities for the greater social good. This approach focuses on applying marketing principles and techniques to promote social change and address public issues, such as health, environment, and community welfare. By utilizing research, audience segmentation, and targeted messaging, social marketing aims to motivate people to adopt positive behaviors or attitudes that can lead to improved societal outcomes.
Stakeholder theory: Stakeholder theory is a concept in business ethics and organizational management that emphasizes the importance of considering all parties affected by a company's actions, rather than focusing solely on shareholders. This approach advocates for balancing the interests of various stakeholders, including employees, customers, suppliers, communities, and the environment, fostering sustainable business practices and ethical decision-making.
Sustainable Marketing: Sustainable marketing is the process of promoting products and services in a way that considers environmental, social, and economic impacts to create long-term value for both consumers and society. This approach integrates sustainability into the core marketing strategy, ensuring that the needs of present consumers are met without compromising the ability of future generations to meet their own needs. By emphasizing ethical practices and responsibility, sustainable marketing aligns with the broader goals of corporate social responsibility and addresses the evolving expectations of consumers.
The Case Foundation: The Case Foundation is a private philanthropic organization dedicated to supporting various social causes and initiatives that drive social change. It emphasizes the importance of cause-related marketing by aligning business goals with charitable activities, fostering a greater connection between consumers and brands through meaningful partnerships that contribute to societal improvement.
TOMS Shoes One for One: TOMS Shoes One for One is a business model introduced by TOMS, where for every pair of shoes purchased, the company donates a pair to a child in need. This initiative combines consumerism with philanthropy, effectively leveraging sales to address social issues like poverty and lack of footwear among underprivileged populations. The model has inspired many other businesses to adopt similar cause-related marketing strategies, emphasizing social responsibility as a core aspect of their brand identity.
Transaction-based programs: Transaction-based programs are marketing initiatives designed to encourage consumer purchasing behavior by linking a specific transaction to a cause or charitable contribution. These programs often incentivize customers by donating a portion of sales to a chosen cause when a product is purchased, effectively combining consumer spending with social responsibility. This approach not only drives sales but also enhances brand loyalty and customer engagement through a sense of shared purpose.
Warby Parker's Buy a Pair, Give a Pair: Warby Parker's Buy a Pair, Give a Pair is a social initiative where the eyewear company commits to donating a pair of glasses to someone in need for every pair sold. This approach not only meets a business goal of selling eyewear but also addresses the issue of vision impairment worldwide, highlighting the importance of corporate social responsibility in marketing.
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
Back
Practice QuizGlossary
Practice QuizGlossary
Next guide