BBB Logo

Better Business Bureau ®
Start With Trust®
In Greater Kansas City
Cause-Related Marketing & Responsibility
December 03, 2012

By Aaron Reese

3/31/10

Kansas City, MO – “Cause-related marketing” is a buzz-phrase that has gained prevalence in the last decade. It refers to advertising that links a company or brand to a social cause such as breast cancer awareness or driving safety. New research is constantly reaffirming the power that cause-related marketing has on a company’s image. In the most thorough statement on the subject, a research paper from theMIT Sloan Management Review says this:

The case histories suggest that these companies have been able to use societal [cause-related] marketing to help differentiate their brands from competitors in consumers' minds, in turn leading to a range of desirable effects, including greater efficiency for other marketing efforts, an ability to charge higher prices, increased market efforts, an ability to charge higher prices, increased market share, greater brand loyalty and more favorable treatment from stakeholders such as regulators and investors. [1]

It's no wonder businesses are rushing to associate their brands with causes [2]. This year, Pepsi broke its 30 year streak of running Super Bowl ads and instead used the $2.5 million dollars that the big game ad would have cost and pledged to donate it to charities and offer grants [3]. No matter how noble a cause is, if a business wants to stay in business, it will not spend money on something that doesn't promise a return on investment. Pepsi is not only doing it for a good cause, they are trying to make money, to improve their image and set themselves to a higher standard than their competitors—a standard that consumers will appreciate.

Due to the nature of cause-related marketing, it can backfire. All advertising is for the purpose of raising money and cause-related advertising is no different. When good causes are involved, people may believe the ad exploits the cause for the explicit purpose of making money. The same MIT Sloan paper that showed the powerful results cause-related marketing could produce also warns:

When a brand promotes a high-fit social cause, it may be more likely to be viewed by some consumers as opportunistic and seeking commercial gain. It is possible that consumers' skepticism about such an effort could lead to their reacting negatively to the high-fit societal marketing initiative. [1]

After the crippling earthquake in Haiti, many businesses have donated considerable funds for relief efforts, but are heeding the above warning and advertising very little about it. In an interview on the Walt Bodine show, David Renz, Director of Midwest Center for Nonprofit Leadership at UMKC, brought up a similar point when asked about cause-related marketing: "It's a growing trend and we see large organizations doing it a lot…there is a danger, but it seems to be less so in today's world, that some of the people who see you connecting your marketing will be offended by that…because it looks like the organization is trying to profit by tagging its sales to the cause." [4] Businesses are then faced with the dilemma that they cannot broadcast positive messages to their customers without fear that their intentions will be misunderstood.

Businesses should not fear to advertise a cause they believe in. If a company donates five percent of its profits to a charity, consumers should hear about the noble effort so they have the opportunity to switch brands to a business associated with a cause. There are ways to get cause-related messages to consumers without exploiting a cause or even appearing to.

The first and obvious step to conveying honorable intentions comes from a business choosing a cause it actually believes in. A business doesn't need to pick a cause directly related to its industry. For example, a computer company does not have to find a charity associated with computer crime awareness or computer security. If the board or president of the computer company believes in helping children to learn, that's where he or they should invest their efforts. According to the case studies mentioned in the MIT Sloan paper, companies associated with causes unrelated to their industry were better trusted. If a company truly believes in what it is doing, its passion will more likely come through in the marketing.

Businesses shouldn't be pushy. This isn't a product being sold; it's something extra to help those in need. If people want to help out, they will, they don't need to be pressured or guilted into buying products. If the quality and price of the product is about the same as a competitor's, consumers are more likely to switch to a product associated with a social cause. [5] There's no need to push.

If a business is helping with a particularly tragic event, such as the current efforts in Haiti, it is probably better not to use traditional advertising. Since the tragic Haitian Earthquake, American businesses have shown enormous generosity and have humbly downplayed their role. Thus far, private American organizations have donated more than $1 billion, much of it from businesses. [6] Businesses have been doing a good job getting their message out through news media interviews, explaining what they are doing to help and how their customers can lend a hand without blatantly polishing their images. No matter how much a business wants to spread its message about a good cause in every way possible, it is better to stand on the side of caution when large-scale tragedies are involved.

Cause-related marketing is a balancing act. Businesses must not be shy if they want to share their message, but they also must not be overbearing or risk losing customers. If businesses are genuine and believe in what they're doing, consumers are more likely to jump on board.

[1] http://elab.vanderbilt.edu/research/papers/How%20Social-Cause%20Marketing%20Affects%20Consumer%20Perceptions%20[Bloom,%20Hoeffler,%20Keller,%20Meza].pdf

[2] http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6863

[3] http://www.time.com/time/business/article/0,8599,1958400,00.html

[4] http://kcbbb.blogspot.com/2010/01/bbb-charity-director-on-walt-bodine.html

[5] http://www.marketingcharts.com/topics/behavioral-marketing/cause-related-ads-get-more-attention-may-increase-sales-up-to-74-6278/

[6] http://www.philanthropy.iupui.edu/research/disaster.aspx