The Pros and Cons of Cause Marketing
Cause marketing, or cause-related marketing, is a relationship between a business and a nonprofit organization designed to raise money for a specific cause. When cause marketing is part of a business’s corporate social responsibility (CSR) strategy, the business’s employees and their bottom line all benefit. Plus, the business is doing good by giving back to a worthy cause, so what’s not to like?
Cause marketing is great for both company and nonprofit, but it’s not without its drawbacks. In some cases, cause marketing has unintended effects on the local community. Or, if the company doesn’t research the nonprofit or cause thoroughly, a partnership can backfire, drawing scrutiny and criticism from the public.
While there are a bunch of benefits to taking on cause marketing, but it has to be done well. Read on to learn about the pros and cons of cause marketing (and if it’s right for your brand).
Your company gives back to a cause
The first benefit to cause marketing? Your company is giving back to a particular cause — presumably without expecting anything in return. You’re making a positive impact on the community by investing in something good, whether that’s committing to going green, ending hunger, advocating for health, supporting developing countries, or championing human rights.
Warby Parker’s “Buy a Pair, Give a Pair” program is an excellent example of cause marketing that makes sense for the eyewear company. Over 2.5 billion people around the world don’t have access to the glasses they need. Warby Parker distributes one pair to someone in need for every pair of Warby Parker’s purchased.
It’s good for the bottom line
Of course, there are business-wise benefits to cause marketing, too. Cause marketing can boost your brand reputation and visibility, creating positive word of mouth for your company as well as the partnered nonprofit. It can lead to increased sales for you and increased funding for the nonprofit. It’s a win-win.
Cause marketing can also benefit your company’s costs. It sounds counterintuitive, but giving away time and resources towards a cause actually benefits your bottom line. When your brand reputation is stellar and sales are up, you might see an increase in revenue and market value.
Take Starbucks, for example. The Starbucks FoodShare program launched in 2016 in partnership with nonprofit Feeding America. The program’s goal is to “rescue 100% of the unsold food available from its more than 8,000 U.S. company-owned stores by the end of 2020.” In September 2019, more than 20 million meals were donated through FoodShare.
Not only does FoodShare raise awareness of food waste and hunger in the United States, but it also acknowledges an area where Starbucks can do better: food production and disposal. FoodShare works to cut down on Starbucks’ wasted food through a thoughtful program with a partnered nonprofit. That cuts down on their bottom line two-fold.
It attracts customers and jobseekers
Employees and consumers, especially millennials, expect companies to be socially conscious. People believe that companies should work towards social change through their business values and practices. When you have a thoughtful cause marketing strategy in place, you can attract both consumers and potential employees who are looking for a business that aligns with their own values.
In fact, research has shown that 56% of U.S. consumers stop buying from companies they believe are unethical. Even if there’s no substitute for that brand, about 35% of consumers will stop buying from it anyway.
Not all cause marketing has the intended effect
Cause marketing has many advantages, but it may also have unintended consequences in the very community you’re trying to help. Shoe company TOMS, for example, is known for its “One for One” business model. For each pair of TOMS shoes sold, it donates one pair of shoes to children around the world. It’s similar to Warby Parker’s “Buy a Pair, Give a Pair” program. The intentions are good and the business model fulfills a need. But there are disadvantages.
The TOMS business model may help needy kids, but it also has a somewhat negative impact on local markets. Local makers and shoe merchants are selling fewer shoes because of donated pairs of TOMS saturating the market. Plus, it’s possible that the business model is making communities more reliant on aid from others, rather than supporting their economic development.
One way to eliminate these unintended consequences? Support local causes where you can have a more direct impact and visibility.
Be prepared for criticism and scrutiny
When your company champions a cause, especially a big one, it puts you in the public eye. This can be a good thing; look at sites like GoFundMe or Kickstarter. People are seeking out ways to help others on their own. But it can backfire if you’re not transparent about your strategy, or if your operations don’t seem genuine or are in poor taste.
Remember the Pepsi marketing fiasco a few years ago? Following the Black Lives Matter movement, Pepsi released an ad in which famous Kardashian supermodel Kendell Jenner handed out cans of Pepsi to police officers, thereby avoiding police brutality. It was seen as tone-deaf and inauthentic. Plus, it was just plain cringe-worthy.
That’s why it’s important for companies to do their research and stand behind the causes they choose to back in an authentic, well-advised way. You’ll better understand your long-term impact and how the public might view your efforts when you do your homework first.
Choose a cause that makes sense for your company
When you take the time to choose a cause that makes sense for your company, you’ll reap the benefits. Do your research and consider each nonprofit carefully: How are their donations used? What portion actually serves the community they’re targeting? How have their campaigns performed in the past? Picking a cause and nonprofit partner that you genuinely support can boost your brand visibility, revenue, employee performance, and more.
And if you’re already developing a partnership with a nonprofit or cause, it’s important to market your collaboration in tasteful and impactful ways. V9 can help you create social media, content, and/or ad strategies to boost visibility for your brand and the cause its supporting.