The 4 Secrets to Successful Cause Marketing
As a young entrepreneur in 1987, I spent my time building my business and volunteering at a community school, which like most non-profit organizations, was always needing to raise money. I was asked by the board to help raise money, as they thought this was a fitting job for me with my background in business.
However, raising money to solve cash flow issues is not a passion I have. So I proposed something else. I was excited by a new concept at the time — cause marketing — where school supporters generated contributions by buying from companies who agreed to give back a portion of the purchase to the school.
After a few years of trial and error trying to use cause marketing to help raise funds for schools, I reached out to AT&T to see if they would be interested in my proposition. They liked the idea but they asked for two things: Was I willing to launch the program for ethnic communities across the United States and would I agree to a performance-based commission? This meant no sales, no commission, no contributions. By then, I was a true believer that communities can use the purchasing power of their members to make a difference. So I started a business dedicated to cause marketing not knowing if we would survive and help causes on performance pay.
To my surprise, in our first year we had more than 1,000 employees and USD300 million in annual sales! Our motto was “contribute without donating” and we asked people to use their purchasing power to make a difference in their community by buying and staying loyal to AT&T in the face of fierce competition.
It worked! We were a purpose-driven organization where employee performance was based on social impact resulting from sales. Where every customer was enabled to be an activist for their own community supported by our company and employees. It was a win-for-all formula that gave causes needed money on a regular basis. This magical win-for-all formula also gave customers the power to make a difference with their own purchases, gave our employees a passion to make a difference and feel good every working day, gave our company a chance to make money and make a difference, and gave AT&T their most loyal customers, acquired and maintained at 20 percent less cost than their other channels. We were all GIVERS! The customers, the employees, our company and the clients!
Since then, numerous research has been done on the power of givers. Adam Grant’s book “Give and Take” and his TED talk summarize what I experienced in my business. Givers empower organizations to excel and takers destroy organizations. Michael Norton’s book “Happy Money” and his TED talk show research demonstrating 5x ROI (yes, 500 percent) on social good incentives versus selfish incentives.
Often after my “Give to Grow” presentation, sharing my story and the latest research on the transformational power of purpose, giving and happiness on an organization, my YPO friends ask if there’s a secret sauce to cause marketing.
Yes, there is. I call it PACT!
In our first months of operations we struggled to get traction. Then we discovered the secret sauce and everything changed. Our struggle became keeping up with growth! It works like a combination lock or a car with four wheels. You just won’t get far without all four even if you get three right! The four combinations to growth with cause marketing are:
Purpose, Activation, Communication and Transparency
- Cause marketing is not a tool; it’s a core strategy. It shouldn’t be used as a temporary promotion but as an everyday business. Making a difference should be part of your PURPOSE not a ploy to attract customers.
- Most companies give to causes selected by their CSR departments, board or executives. Customers and employees might appreciate this but it won’t drive a lasting change in their behavior. They need to be part of the giving especially when it’s resulting from their hard work and purchases. ACTIVATION is about giving your employees and customers the power, individually, to decide where the company contributions go.
- 91 percent of customers want to hear about your purpose and giving before, during and after the purchase. They want to hear it from other customers, employees and causes not just your PR department. The right COMMUNICATION is a key driver to long term impact on customer loyalty.
- TRANSPARENCY is the key to convincing the 94 percent of customers who say that they don’t trust companies social engagement motives and reported giving. Customers need to know how much, when and where the contribution generated from their purchase is given.
With PACT, I believe, every business is capable of doubling their ROI with purposeful giving.
I’ve experienced it myself and so can you.