Cause-Related Marketing is one of the best things you can do for your brand right now when the going’s tough. Let’s break it down.

What is Cause-Related Marketing (CRM)?

From Wikipedia:

Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a “for profit” business and a non-profit organization for mutual benefit.

One stone, two birds - for profit businesses can deliver value to BOTH a non-profit and their customers with ONE charitable act.  Many businesses already are involved in a cause, but have not yet tied it into their marketing strategy.  Is this you?

Cone Blog recently published a nice roundup on some of 2008’s notable cause marketing campaigns.  They include the high-profile Starbuck’s Product (RED) promotion to help the Global Fund in their fight against AIDS as well as Sears’ “Heroes at Home Wish Registry” with Ty Pennington.

Another high-profile example is Subaru’s “Share the Love” campaign which runs through Jan. 2nd 2009.  They will donate $250 to one charity that new customers can select from a pool of five.

The charities are: Boys & Girls Clubs of America, Habitat for Humanity International, Meals On Wheels Association of America, the National Wildlife Federation, and the American Society for the Prevention of Cruelty to Animals (ASPCA).  Were I a car buyer and considering otherwise equivalent cars, I would likely purchase a Subaru and pick Habitat for Humanity International.

So what? What are the business implications?

The 2008 Cone/Duke University Cause Consumer Behavior Study found that almost 80% of consumers are likely to switch from one brand to another (all else being equal) if the other brand is associated with a good cause, an increase of about 14 percent (from 66%) since 1993.

In improving your value proposition, are you taking into account the “social good” factor?  It has emerged as an integral part of your customer’s brand perception and utility functions.

Not only is this a branding play, but it also has been proven to significantly affect purchasing decisions in certain categories - Cone/Duke University study,

74% increase in actual purchase for a shampoo brand when associated with a cause (47% of participants who saw the cause-related message chose the brand while only 27% of those who saw the generic corporate advertisement chose the brand)

They key is finding a cause that is relevant to you AND your market.  If you’re not already in a two-way dialogue with your market, you should be.  Here I will defer to several social media masters: Jim Connelly, Chris Brogan, Chris Heuer.  A quick and dirty method is to play Subaru’s game and allow your customers to choose.

These stats are all well and good, but say nothing about the bottom line.  This is a starting point, and I will attempt to tackle CRM ROI over the holidays over a glass of Cabernet Sauvignon from nowhere else but Napa Valley :).

Be the brand who cares

This brings us back to my main point - This recession is the perfect time to strut your cause loud and clear because, especially during tough times, consumers expect brands to pick up the slack and help others when they themselves cannot.

Eric Mower and Associates polled 520 adult consumers and found that “62% said they expect to give less or not at all to charities in the future, yet 85% of respondents said they expect brands to maintain or increase their charitable giving during times of economic tumult.”

The Cone/Duke study corroborates this finding, “More than half (52 percent) of Americans feel companies should maintain their level of financial support of causes and nonprofit organizations [during a poor economic climate]. Another quarter (26 percent) expects companies to give even more.”

What does this mean? If you become the brand who cares during tough times, your customers and market will never forget it.

Happy Holidays all and get ready for an exciting 2009!

Related:

1. “Do Values Matter?” Lewis Green asks, “Are business values important to most Americans?”
2. Advertising Age’s article on recession-proofing your business and includes CRM on their list
3. “10 Reasons to Start/Keep doing Cause Marketing” From Joe Water’s CRM Blog
4. “Retailers Urged to Keep up Charity Moves” Americans in a way blame companies for the current economic situation: “There’s an expectation that companies better pay up”

photo credit Clagnut