Brand building through the power of cause marketing partnership
Carley Fitzpatrick, Manager, Sponsorship Strategy & Client Service
Super Bowl LI proved to be an historic moment, not only on the field, but within every commercial break. While Tom Brady was leading his team to record setting feats – brands were using their primetime moment to communicate both subtle and overt messages to address some very timely cause-related themes (a few notables include Airbnb “We Accept”, Coca-Cola’s re-use of 2014’s “America the Beautiful” with “It’s Beautiful”, and Budweiser’s “Born the Hard Way”).
Aligning with causes or social movements to authenticate a brand story isn’t a new tactic, and as consumer data shows, it is one that brands can simply no longer ignore.
Let’s start with some good old fashioned stats. Almost all Canadians (95%) agree that it is a good idea for companies to support causes and 84% of Canadians would switch brands to one affiliated with a good cause if price and quality were similar (Ipsos, 2015). Furthermore, 88% feel a responsibility to purchase products they think are socially and environmentally responsible, 67% say they have actually done so in the last 12 months and 72% would recommend a brand that supports a good cause over one that doesn’t (Cone CSR, 2013). According to those figures, we can assume that consumer expectations are changing, and as a whole, we are increasingly holding brands to higher standards. We not only expect great quality at fair prices but we also expect brands to improve our overall quality of life.
Yay to purchasing power! All good stuff right?
Right. But it may come as a surprise that despite our national sentiment, only 20% of brands worldwide are perceived as making a significant, positive impact on people’s wellbeing (Havas Media, 2013). To compound this issue, fewer and fewer of us feel a sense of trust, respect or loyalty for brands with 45% of Canadians saying they are less loyal to brands than they were in the past and three quarters believe greed or money is the main driver of industry. The ever-elusive millennial set is feeling these feels the most, scoring lower than any other generation in terms of believing that people and brands can be trusted – yet they also have the highest expectations from companies in terms of supporting good causes (Harvard Business Review, 2014). This leaves a huge opportunity for companies to step up to the plate to demonstrate a purpose beyond profit and the incentives are reciprocally huge. According to a 2013 Havas Media Report, purposeful brands outperform the market by 120%! Not to mention the additional benefits companies receive such as increased employee engagement and reduced turnover, product differentiation, increasing brand loyalty and trust, attracting new consumers, and so much more.
So why the gap? Well, here are a few potential reasons:
Lack of clearly defined purpose
Many organizations want to support good causes but have not clearly defined which causes are important to them, authentic to their business and brand, and why or what their purpose is beyond making a profit. This is often seen when companies support a wide array of causes with little or no strategy behind their choices, often driven by a wish to appeal to the greater masses by not singling out one cause over another. This can leave consumers confused, disengaged and unable to relate to the organization. When companies or brands clearly define their purpose, their strategies are unified by guiding principles for investments that are authentic – resonating with their own brand values, and the values of their consumers. Inauthentic, poorly aligned cause partnerships further compound the issue of mistrust and cynicism among consumers often leading to irreparable brand damage (think the KFC and breast cancer fiasco). Defining a purpose is key to resonating with consumers who expect more, builds trust and loyalty, and differentiates you from the crowd.
Not understanding your consumer
Having a well-defined purpose is one piece of the puzzle, but if you are unable to resonate with your consumer group, it may still all be for naught. In fact, 89% of Canadians find companies’ CSR strategy irrelevant to them ( ) which indicates that organizations are still not doing a very good job of connecting their cause initiatives with what is important to their consumers. We can’t ignore that the majority of companies build their cause strategies around what is important to their employees, which is an effective employee engagement strategy, but it should still make sense in relation to what the company is trying to achieve and should in some way loop back to authentically support causes that are important to their consumers as well. For example, a cookie company asks its employees what causes are important to them. They choose a bunch of random causes and the company donates $X amount of revenue to those various causes. Great for employee retention and engagement, but in no way takes into consideration the consumers who bring them said revenue and donation dollars. Suppose the company decided to rally around something that made sense for the brand such as helping to combat hunger in their city. They make this an important part of their corporate culture, get their staff to rally behind the cause, and tell their good story to customers by saying $1 from every cookie goes to XYZ hunger related cause. People love a good story and can get behind a clear objective and purpose driving sales and adding more funds to actually give toward the cause. It’s clear, authentic, part of the corporate culture, and makes sense to consumers. Win-win-win-win.
Lacking strategy around CSR initiatives
When marketing and CSR initiatives are not aligned, or when either party is not even aware of what the other department is doing, brand purpose becomes blurred, resulting in confused and disengaged consumers. Many times, companies choose to keep these initiatives separate because of internal financial tax implications, not to intentionally mislead consumers.
Let’s start with the basics, by looking at the tax implications of donations vs. sponsorships. Essentially, when a company donates money or gifts to a particular charity or cause in Canada, the CRA restricts the marketing or advertising value in return, in order to collect a charitable donation receipt. If an organization does receive marketing value by paying to associate with a charity, this is considered sponsorship and therefore they are not entitled to a charitable tax receipt. However, a company can still claim the contribution as a business expense, so in reality, the tax implications are not that different between the two options. There is however a third option for companies and brands to consider when looking at how they manage their CSR activities; and that is a blended approach. From a strategic perspective, it makes sense for brands to split their contribution – spending some on the charitable donation aspect and some to tell that good story through a marketing investment. In short: a “Cause Marketing” partnership. Without the right to tell your story, how will your consumers ever learn about the good you are doing for your community? To realize true brand building benefit (and then translate that to “brand love”) – cause marketing relationships have huge potential when executed well.
There are a few reasons why this is a smart move for brands. Firstly, blended contributions can provide brands with more control over how their contribution is directed within the cause. This provides the opportunity for more authentic storytelling and potentially access to more relevant and different assets than a typical sponsor may receive. Secondly, this opens up the possibility of accessing different budgets to supplement marketing rights fees and philanthropy. For example, company X has a large philanthropic budget of $80K but only a small marketing budget of $20K. The philanthropy team wants to support a particular cause and the marketing team wants to help authenticate their support by sponsoring all of the races this charity is involved in across the country. The rights fee to come on board as a title sponsor of these races is $50K. The company can strategically choose to contribute $20K from their marketing budget and $30K from their philanthropy budget in order to reach the rights fee threshold. This often leads to more dollars for the charity as a whole and allows the brand to talk about their support of the cause. Through holistic investments, brands have more opportunity to bring their partnership to life and tell their good story.
At the end of the day, consumers want brands to support good causes, be purpose driven, and make our lives better – for ourselves individually and our communities. Too many brands are still lacking in this department leaving a significant opportunity for them to take a look inward, clearly define their purpose, align with their consumers, and tell their good story to attract and retain customer loyalty.
At TTG, we remind ourselves every day that we are consumers – and connecting our work as marketers to reflect consumer demand is imperative to our success. So putting the shoe on the other foot, let’s also remember that as consumers, we have the power to make positive change in the world with every purchase we make – and these choices can and will influence brand behavior. So, let’s continue to reward companies that are doing good, by putting our money where our hearts are using our purchasing power for what is right.