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Proving that Cause Marketing is a Win-Win
A compilation of statistics on the impact cause marketing campaigns have had on fundraising and sales for nonprofits and businesses from the editors of OnPhilanthropy.com
Jessica Stannard-Friel, associate director in the philanthropy division of Changing Our World, Inc., published this extremely valuable compilation of statistics on the impact cause marketing campaigns have had for nonprofits and businesses.
It's a great resource for anyone seeking to make a case for cause marketing within their organization.
In 2004, American companies are expected to spend nearly $1 billion on cause related marketing campaigns, according to the IEG Sponsorship Report. A growing philanthropic strategy, cause related marketing helped American Express raise $1.7 million in 1983 for the Statue of Liberty restoration; it was behind $9 million McDonald’s gathered for the Ronald McDonald house in 1994; and it’s also the engine through which Avon has generated over $300 million to date to fight breast cancer worldwide.
These numbers demonstrate that cause related marketing is a very successful source of funding for nonprofits. However, philanthropy professionals often find themselves pressured to create programs that not only profoundly impact their communities but also have a measurable impact on their companies’ bottom lines.
Does cause related marketing really impact the corporate partners’ profits? Is it, in fact, a proven win-win tactic? CW investigates the facts and figures behind this quickly-growing trend.
Do cause-related marketing campaigns impact a company’s profits?
Coca-Cola:
In 1997, Coca-Cola donated 15 cents to Mothers Against Drunk Driving for every case of Coca-Cola bought during a 6-week promotion in more than 400 Wal-Mart stores. Coke sales in these stores increased 490% during the promotion.
TUMS:
In 2003, through its “TUMS Helps Put Out More Fires Than You Think” campaign, TUMS pledged to donate 10 cents to the First Responder Institute for every bottle of TUMS sold. In addition to donating $238,000 to the Institute, which in turn funded 60 fire departments throughout the United States, TUMS saw a 30% increase in the number of displays shipped to stores and a 16% increase in sales volume.
American Express:
In 1983, after American Express pledged to donate a penny to the restoration of the Statue of Liberty for every transaction made by its cardholders, use of American Express cards increased by 28% and new users increased by 17%.
After partnering with the hunger-fighting organization Share Our Strength in the Charge Against Hunger campaign, according to a 1996 Harvard Business Review article, "American Express found that as a result of the program, transactions with the card have increased and more merchants now accept the card. Furthermore, cardholders have expressed strong support for the Charge Against Hunger and greater satisfaction with American Express, and thousands of the company's employees have volunteered their time to fight hunger."
McDonald’s:
In 1994, McDonald’s sold a CD featuring Garth Brooks, Elton John, and Tina Turner to raise funds for the Ronald McDonald House Charities. In addition to raising $9 million for the cause, the promotion increased restaurant sales by 5%.
Persil:
Beginning in 2001, Persil, Great Britain’s leading laundry detergent, paired with Comic Relief, a
nonprofit organization founded by comedians to use humor to fight poverty and injustice. During the period in which Persil created an on-pack promotion, Persil sales increased 13% over the previous 12 weeks and 19% over the same period the previous year. Its market share also increased 3% during the promotion, compared to the 12 weeks preceding the campaign.
Briggs & Stratton:
In 2002, Briggs & Stratton worked with the National Wildlife Federation to educate the public on the importance of lawn mower maintenance in cutting pollution emissions. After sponsoring a website, www.tuneupmonth.com, that included information on lawn mower tune-ups, tips for reducing pollution and energy inefficiency, and educational information, the company saw a tripling of tune-up kit sales.
Calphalon Corporation:
The Calphalon Corporation co-branded several of its poorly-selling pans with the Share Our Strength name and logo and donated $5 to the nonprofit for every such pan sold. Sales of these pans increased 250%.
Bayer Aspirin:
Bayer Aspirin partnered with the American Stroke Association (ASA) to create the American Stroke Challenge, an effort to raise money for the ASA and educate the public about strokes. During the May 2000 Challenge, Bayer sales increased 9% over the same month the previous year.
Dollar-Rent-A-Car:
In 1993, Dollar-Rent-A-Car joined forces with the Special Olympics, donating $1 to the nonprofit for every car booked during the 6-week campaign. Bookings by travel agents increased 25% during the promotion.
Visa:
In 1997, Visa ran a campaign with the childhood literacy organization Reading Is Fundamental, basing the size of the contribution to the nonprofit on the number of Visa transactions during November and December. Compared to the same period in 1996, Visa sales increased 17% during the promotion.
Ansett Australia:
In 1998, airline Ansett Australia partnered with the World Wide Fund For Nature (formerly the World Wildlife Fund) to promote awareness of both organizations. From the program’s launch in March until the end of April, consumer awareness of Ansett Australia’s international destinations increased from 20% to 25% and international ticket sales increased 50% over the same period the previous year, when similarly discounted fares were offered.
Evian Natural Spring Water:
Evian supported Share Our Strength through the “Quench Hunger” program, donating proceeds from sales of cases of 1-liter glass bottles to the nonprofit. Case sales of this product increased 20% during the promotion.
BT Group:
BT Group, a major British telecommunications services company, offered a donation to ChildLine, a 24-hour helpline in the UK for children in danger, for every customer who signed up for its voicemail service. Sign-ups increased 25% during the promotion, and BT saw a direct mail response rate three times the normal rate.
How do cause-related marketing campaigns impact consumer perceptions and behaviors?
92% of consumers consider it important for corporations to contribute to nonprofits.
Almost 90% of teenagers said they would switch to a brand affiliated with a good cause, if price and quality were equal.
76% of American consumers surveyed have taken part in at least one cause-related marketing campaign.
60% of consumers surveyed planned to buy a product during the 2004 holiday season through which a portion of the purchase price would be donated to a cause.
77% of women and 64% of men expected to consider a company’s reputation for supporting causes when purchasing gifts during the 2003 holiday season.
48% of American and British consumers surveyed reported that, in the past, they had been motivated by a cause-related marketing campaign to change brands, use a product more, try new products, or get information about new products.
In a survey of 12,000 European consumers, 20% said they would pay more for a product if it were affiliated with a good cause.
When surveyed consumers were aware of a given company’s cause-related marketing efforts, they consistently rated the company more highly in the categories of trust, endorsement, bonding, and innovation.
Corporate citizenship practices are more important to consumer impressions than brand reputation or financial factors, according to an international survey of 25,000 people on consumer perceptions regarding corporate citizenship.
Does cause-related marketing have an impact on corporate employees?
A 2003 study of MBA graduates from 11 top American and European business schools, conducted by professors at Stanford University and UC Santa Barbara, found that more than 97% of respondents were willing to give up a certain degree of financial compensation to work for a company reputed to be socially responsible and ethical. They would sacrifice an average of 14% of their expected income.
Assuming equal location, pay, benefits, and responsibilities, 72% of Americans say they would choose to work for a firm that supports charitable causes over one that does not.
In a 2000 survey, 85% of American business executives said that one of the most important effects of cause-related marketing is to increase employee loyalty. A survey the previous year reported strong loyalty toward their employers from 87% of employees at companies with cause-related marketing programs , compared to two-thirds of employees at firms without such programs.
SOURCES:
“Sponsorship Spending to Increase 8.7 Percent In 2004.” IEG Sponsorship Report. IEG, Inc. December 22, 2003.
Irwin, Ron. “Can branding save the world?” Brand Channel. http://www.brandchannel.com/features_effect.asp?pf_id=87. November 2, 2004.
ASM Communications, Inc. “Cause and Effects Marketing.” PSA Research Center. http://www.psaresearch.com/. October 15, 2004.
Source: Brandweek Magazine. April 22, 1996.
Avon Foundation Overview. http://www.avoncompany.com/women/avonfoundation/overview.html. October 15, 2004.
“Becoming a MADD Corporate Sponsor.” Mothers Against Drunk Driving. http://www.madd.org/aboutus/0,1056,5704,00.html. October 15, 2004.
“2004 Cause Marketing Forum Halo Award Winners.” Cause Marketing Forum. http://www.causemarketingforum.com/page.asp?ID=279. October 15, 2004.; “TUMS joins the First Responder Institute in helping out America’s Firefighters.” GlaxoSmithKline. http://www.tums.com/firefighter.asp. October 15, 2004.
Irwin, Ron. “Can branding save the world?” Brand Channel. http://www.brandchannel.com/features_effect.asp?pf_id=87. October 15, 2004.
“Partnership Profiles.” Share Our Strength. http://www.strength.org/meet/partnerships/charge//benefiting.htm. October 15, 2004.
ASM Communications, Inc. “Cause and Effects Marketing.” PSA Research Center. http://www.psaresearch.com/. October 15, 2004. Source: Brandweek Magazine. April 22, 1996.
“Brand Benefits 2003.” Business in the Community, 2003.
“2003 Cause Marketing Forum Halo Award Winners.” Cause Marketing Forum. http://www.causemarketingforum.com/page.asp?ID=77. October 15, 2004.
“Corporate Partnerships and Cause Related Marketing.” Share Our Strength. http://www.strength.org/meet/CEMbrochure.pdf. October 15, 2004.
“The American Stroke Challenge.” The Holmes Report, May 7, 2001. http://www.holmesreport.com/holmestemp/story.cfm?edit_id=442&typeid=4. October 15, 2004.
MacCracken, Peter. “Community Investment.” The San Diego Daily Transcript. February 15, 2001.
“Ansett and the World Wide Fund For Nature.” Cavill and Co. http://www.cavill.com.au/CRM/CRMinAction/Ansett-WWF.html. October 15, 2004.
“Corporate Partnerships and Cause Related Marketing.” Share Our Strength. http://www.strength.org/meet/CEMbrochure.pdf. October 15, 2004.
“Cause Related Marketing impact = celebration.” Business in the Community. July 2004.
“Deloitte Survey Reveals that 72 Percent of Americans Want to Work for Companies that Support Charitable Causes.” Deloitte & Touche USA LLP. October 6, 2004.
“Issue Brief: Cause Related Marketing.” (Citing 2000 Cone/Roper Teen Study.) Business for Social Responsibility. http://www.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=215. Oct. 18, 2003.
“Brand Benefits 2003.” Business in the Community, 2003.
“’Tis the Season for Cause-Related Shopping.” Cone, Inc. (Reporting on 2003 Cone Holiday Trend Tracker. Reported November 17, 2003.) http://www.coneinc.com/Pages/pr_22.html. October 18, 2004.
“Brand Benefits 2003.” Business in the Community, 2003.
“Issue Brief: Cause Related Marketing.” (Citing 2000 CSR Europe Study.) Business for Social Responsibility. http://www.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=215. Oct. 18, 2003.
“Brand Benefits 2003.” Business in the Community, 2003.
Roberts, Sarah, Justin Keeble, and David Brown. “The Business Case for Corporate Citizenship.” Arthur D. Little, Limited. Circa 2002.
“MBA Graduates Want to Work for Caring and Ethical Employers.” Stanford Graduate School of Business, January 2004. http://www.gsb.stanford.edu/news/research/hr_mbajobchoice.shtml. October 18, 2004.
“Deloitte Survey Reveals that 72 Percent of Americans Want to Work for Companies that Support Charitable Causes.” Deloitte & Touche USA LLP. October 6, 2004.
“Issue Brief: Cause Related Marketing.” (Citing 2000 CSR Europe Study.) Business for Social Responsibility. http://www.bsr.org/CSRResources/IssueBriefDetail.cfm?DocumentID=215. Oct. 18, 2003.
Mayer, Harvey. “When the Cause Is Just.” PSA Research Center. http://www.psaresearch.com/bib4313.html. October 18, 2004. Source: Journal of Business Strategy. November/December 1999, pp. 27-31.
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