What is Cause Marketing and as a Small Business, How Can We Utilize It?

When the economy began to shift a few years ago, many consumers started to feel differently about how they spend their money. Whether by simply cutting back on their spending or by taking advantage of coupons and promotions, consumers have become much more conservative in how they are choosing to spend money… period. It is becoming more and more important to people that they maximize their budget and are gaining full benefits for themselves and their families.

Because of this, a concept that has been around for a very long time has really begun to take shape over the last few years among large and even small businesses. It’s called “Cause Marketing.” While many businesses have always been big on giving philanthropic donations and helping out non-profit organizations for the greater good, there is a form of marketing that some of these businesses are starting to use that not only benefits a non-profit organization, but it also provides a profit for their company as well.

If you are unfamiliar with the term “Cause Marketing” or “Cause Sponsorship Marketing,” it is a partnership between a non-profit organization and for-profit company for a MUTUAL profit that benefits both… all the while meeting the needs and demands of consumers to bring satisfaction in a stressful economy.

Example One: Target REDcard

target card

 Target’s REDcard program is a debit or credit card that provides Target shoppers with additional discounts and savings that they cannot receive when using other forms of payment. With things like 5% rewards, free shipping, and even pharmacy discounts… the REDcard program is an incentive for consumers to save even more when shopping at Target.

In addition, users of Target’s REDcard have the opportunity to choose any K-12 school, in which Target will then donate 1% of all that user’s purchases on their REDcard to the school of their choice.

Targets Redcard donation

So what’s the catch? There is none. Target has found a unique way of providing its customers with additional discounts and savings while also giving a charitable donation to K-12 schools across the U.S. This is not just a Win-Win for consumers and for children’s education; it’s a Win-Win-Win for Target as well while they continue to profit from purchases made by customers using their REDcard.

Example Two: TOMS Shoes

Toms Advertisement

TOMS is a company that has gained huge success in its promise that for every pair of shoes purchased, a pair of shoes would be given to a child in need. “One for One.” After the first year the owner of the company, Blake Mycoskie, along with a group of family, friends, and staff… traveled to Argentina with 10,000 pairs of shoes for children in need. None of this would have been possible if it weren’t for TOMS customers and their purchases from the prior year.

In America, shoes are a commodity and without even thinking, we put them on and wear them every day. In other, less fortunate countries this is not the case. Many children grow up barefoot without any shoes at all.

Generally speaking when people are presented with the option of purchasing a product that benefits some kind of organization, their answer is usually, “Ok.” However, because of the change in economy and how consumers are spending their money, they are starting to look at some of these forms of Cause Marketing in a skeptical way. People want to know that their money will be providing tangible goods for the greater cause.

Now when consumers are ready to purchase new shoes, or often times are presented with a choice between brands, many are turning to TOMS because they know that there is a great cause behind their purchase and the children are getting a tangible item. TOMS has now provided a quality product to consumers, a quality product to the children in need (“One for One”), and by doing so is now branding the company in a way that is producing more business overall. A total WIN-WIN-WIN.

In a recent article, we found that over the last few years Cause Marketing continues to prove its success. Sponsorship spending on cause marketing is expected to increase by 4.8 percent from 2012 to 2013 totaling $1.78 billion. Retail, financial services, and pharmaceutical are the most active industries while Coca-Cola, Bank of America, and Wells Fargo are the most active businesses utilizing Cause Marketing.

Below are two charts by IEG that show the most active companies in sponsorship spending as well as most active industries.

Bank charts by IEG
Bank charts by IEG

 To read the full article click here.

For a long time Adopt A Highway Maintenance Corporation has considered our business to be a Cause Marketing company in all aspects. We provide businesses, or sponsors, the opportunity to brand their company name and logo, while a portion of their proceeds pay to pick up trash along the highways where they advertise. This… ultimately benefits the environment and the community, but also provides companies with the opportunity to advertise at the same time.

While searching for new and effective ways to market our business, the question has now been raised:

 “How can we creatively provide more incentives for businesses and consumers through this concept of Cause Marketing that ends in an all-around WIN-WIN-WIN?”