Climate change, environmental pollution, attitudes towards animals, deepening poverty through unconscious consumer choices, irresponsible behavior, and access to drinking water.
These are just a few of the issues that are increasingly engaging and polarizing society – both in Poland and globally. Should companies pay attention to these issues and communicate their views on them?
Can cause-related marketing be credible and, above all, can it be a win-win? Based on my interests and education, I decided to take a closer look, and you'll find my conclusions in this article.
What is cause-related marketing?
Cause-related marketing is a situation where a given business mechanism satisfies both the economic goals of the enterprise and responds to certain social problems, trying to communicate and solve them.
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This is the simplest manifestation of a broader phenomenon called "corporate social responsibility." Cause-related marketing is usually closely linked to the sales process, or, as the name suggests, marketing.
Corporate social responsibility, however, can be present in every aspect of a company's activities and does not need to be communicated broadly. The difference is best illustrated with examples.
Cause-related marketing:
- For every 20 złoty spent in our store, we donate 1 złoty to the X Foundation.
Corporate social responsibility:
- Our company employs 400 drivers. We ensure they undergo annual health checks and organize regular training sessions to improve their driving skills.
- Our company creates preserves. We source our fruit and vegetables exclusively from local suppliers, supporting the local economy.
- We are a clothing distributor. We source our products only from ethical businesses that respect workers' and human rights.
The difference, then, lies in the direct connection to the sales process. However, both approaches—when undertaken responsibly and sensibly by a company—simply pay off. In marketing, it's quite simple—it's a pleasure to buy something and help at the same time.
In the second case, for example, thanks to driver training, the company can "save" on traffic accidents, as well as prevent potential image crises related to such accidents or operational liquidity.
The time horizon of the projects also differs. Cause-related marketing can usually be launched overnight and shut down just as quickly.
Corporate social responsibility is a long-term process that requires capital and human investment, as well as careful planning. That's why many companies opt for cause-related marketing – it's simpler and more effective, as its impact on sales is immediately visible.
Benefits of cause-related marketing
The benefits of cause-related marketing can be divided into three parts: the company benefits, but so do the recipients of the product or service, as well as the entity we help – one could say that all parties in this arrangement benefit.
Benefits for the company:
- a favorable image thanks to the association with an organization from the third sector,
- stimulating engagement among the company's community and employees,
- increased consumer loyalty,
- lower level of complaints and returns,
- sales increase.
Benefits for the consumer:
- the help provided by the purchase somewhat “absolves” consumerism itself,
- greater satisfaction with purchases made,
- relatively higher satisfaction with the products and services provided.
Benefits for the aid beneficiary:
- brand association expands the communication of a given social issue,
- a stable source of financing, which enables the implementation of long-term projects and the development of the NGO itself.
An example of a campaign combining business goals with a social mission
Toms – is an American footwear brand that, already at the business design stage, assumed that every pair of shoes purchased by a customer would result in the donation of a second pair to countries and communities where it was particularly needed (regions of Africa and Asia, but also South America).
A cool idea that also shows how something seemingly obvious to us is still a scarce commodity in other parts of the world.
These shoes aren't usually cheap, but that hasn't prevented the brand from achieving success in the highly competitive American market, which was simply ripe for the footwear industry. People love TOMS and are much more likely to attribute positive qualities to them, such as comfort and durability.
Motivations and benefits of CSR activities depending on the size of the company
It's worth noting that cause-related marketing is primarily used by large brands or startups. As you might imagine, the motivations for making this decision vary depending on the size of the business.
Large companies and brands are thus strengthening their branding and customer loyalty. Furthermore, consumer expectations regarding the positive impact large companies have on local communities and the environment in general are growing. We increasingly expect companies to compensate for their environmental impact and even provide us with information on this matter.
This is a very positive trend, as it turns out that in the long run, it pays off both for those around us and for the company that undertook this effort. Unfortunately, it's difficult to speak of a mass reorientation of thinking. Large corporations are powerful and unmanageable vessels. They inspire admiration, but it takes a long time for them to change course.
The situation is different when a startup decides to immediately embed social issues into its customer acquisition process. This usually stems from personal motives and motivation to somehow distinguish its activities from those of powerful corporations that feed on consumerism like leeches. A startup is increasingly not just a product or service, but also a rebellion against the status quo. And that's great.
What's troubling, however, is the relatively weak representation of cause-related marketing in small and medium-sized enterprises. I haven't found any research or meaningful publications that explain this phenomenon. I also don't know if this is a characteristic of the Polish economic landscape or a broader, objective gap.
Nevertheless, if a company from the SME sector implements CSR or even cause-related marketing in its processes, there is no reason why it should be less effective than in the case of micro and large enterprises.
The credibility of cause-related marketing
On the internet, of course, whenever someone is in favor, there will also be someone opposed. Even cause-related marketing has its enthusiasts and opponents.
The latter group most often accuses people of lacking "pure intentions" to help or cynically exploiting someone's misfortune to drive sales. Of course, this can be approached this way. However, it's worth noting the obvious fact that in such a world, everyone would lose.
If it weren't for the company and the specific form of assistance, we as consumers would never have heard about the issue, and the cause wouldn't have received additional funding. So, if you're looking to make a purchase anyway, why not do it from someone who sells and also helps?
Summary
The above article covers the following topics:
- This article examines the credibility and effectiveness of cause-related marketing in the face of growing global problems.
- Cause-related marketing is a strategy that connects a company's sales goals with solving social problems, usually by directly linking the purchase of a product to support for a specific charitable initiative.
- Cause-related marketing generates mutual benefits by increasing sales and company image, increasing consumer satisfaction with purchases, and providing social organizations with stable funding and publicity.
- The Toms shoe brand has found success in a competitive market thanks to a business model where every pair of shoes sold means another pair is donated to communities in need.
- While large corporations implement cause-related marketing mainly to strengthen their image, and startups implement it out of ideological rebellion, the small and medium-sized enterprise sector rarely uses this model, despite its potential effectiveness.
- Although cause-related marketing is sometimes criticized for its lack of selflessness, it is a valuable source of funding and publicity for social issues, offering consumers the opportunity to help with their everyday purchases.
