Transcript Source: www.joinred.com

SPONSORSHIPS,
PARTNERSHIPS, AND CAUSE
MARKETING
CSR Performance 2008
San Diego
October 1, 2008
Brad Allenby
Founding Director, Center for Earth Systems Engineering
and Management
Lincoln Professor of Ethics and Engineering
Professor of Civil and Environmental Engineering
Arizona State University
ONCE UPON A TIME
• Perceived as good idea to combine
information and communication
technology with environmental values
• Partner with environmental Net portal
• “Wise Use” organization with political clout
claimed company was “supporting
terrorists” because of multi-link trail to
environmental monkeywrench manual
Once Upon a Time
• End result: educated wise use NGO on
Net, but protection of company interests
required termination of arrangement
– Corporation as battleground for opposing
philosophies?
• Skepticism in company towards cause
marketing
Once Upon A Time: Lessons
• Need to have a keen grasp of firm’s strategy and
priorities
• Need to have a keen grasp of firm’s
vulnerabilities, and which stakeholders might try
to leverage them
• Need to be prepared to re-evaluate (have an exit
strategy)
• Need to know how initiatives fit within overall
portfolio of firm’s strategies, existing positioning,
and marketing thrusts
So What Is Cause Marketing?
• Marketing that involves collaboration
between industry and non-governmental
organization for mutual benefit.
• Differs from philanthropy because
donation not usually involved; rather, it is a
mutually conducted marketing operation.
Cause Marketing: History
• Early examples include Famous Amos cookies, where
Wally Amos became the national spokesperson for
Literacy Volunteers of America.
• The term itself, denoting formal recognition of a different
type of marketing campaign, generally attributed to
Amex, leading the 1983 campaign for restoration of the
Statue of Liberty. Apparently successful: Amex
estimated 17% in new users, 28% increase in card
usage as result.
• Estimates of current value of cause marketing at well
over a billion dollars a year (pre Panic of 2008).
Forms of Cause Marketing
• Product, service, or location specific
• Promotion of common message (e.g., literacy,
research on particular disease)
• Product license, endorsement, or certification
• Employee programs
• Online increasingly popular (e.g., online charity
auctions)
• Let your imagination go: as governance
becomes more complex, so there are more
opportunities for collaboration
Examples
• Boston Beer with Accion USA to create Samuel
Adams Brewing The American Dream,
microfinance program supporting entrepreneurs
in food and drink sector.
• Dell and Goodwill on computer recycling
• Saturn with Habitat for Humanity (600 dealers
involved )
• American Express and Share Our Strength
“Charge Against Hunger” – 4 year collaboration
that’s already raised $21M.
Examples
• British Telecom and Childline, 24-hour
hotline for children in distress
• American Restaurant Association and
American Red Cross “Dine for America” –
raised $12M post-Katrina
• Toys “R” Us and Toys for Tots
• Campbell Soup and the NFL – “Tackling
Hunger” program distributes millions of
cans of soup to hungry
Potential Benefits
• NGO:
– Can benefit from penumbra of firm’s brand
– Revenue enhancement
– Can help solidify NGO brand image for potential
members
– If synergy with firm’s customers, can be easy way to
identify possible supporters
– Leverages firm’s marketing scope and sophistication,
thereby extending NGO reach significantly
• But does anyone market better than Greenpeace?
Potential Benefits
• The firm:
– Positive public relations (shows willingness to work
with, and support, community/cause groups beyond
just donations)
– Positive customer relations, as NGO brand and cause
align with firm’s customer interests, thereby
generating emotional attachment to firm
– Process of identifying partners and creating joint
marketing initiatives can help firm identify
opportunities that might otherwise not be apparent,
refine strategy, and refine message
– Enhance revenue and market share
Potential Downsides
• NGO
– Must be very careful with partners, since NGO credibility often
involves being non-commercial and not benefiting from
commercial activities
– Must not dilute NGO culture (NGOs known for combative
positions must be very careful in collaborating, because their
current membership reflects their public position)
– Without adequate planning, can be very resource intensive for
NGOs with limited means
– If special expertise is involved (e.g., particular types of
technology, or specialized market/cost information), must be
careful not to be whipsawed by greater information resources of
firm
– Intense need for prioritization, given increasing demand for NGO
partners by business
– Need to avoid capture by firm
Potential Downsides
• The firm
– NGOs can be market- and technophobic; at the least, they will
seldom appreciate the commercial, political, economic, and
regulatory constraints faced by firms
– Few NGO causes are “all good,” which means that selecting any
NGO needs to be weighed against the customers or
communities that will be put off by cause
• Corollary: those few NGOs that are widely perceived as neutral to
good will be very popular among cause marketers (e.g., breast
cancer as cause, or American Cancer Society)
– Aligning NGO and firm interests adequately to support a close
collaboration can be difficult, especially if firms lack experience
in cause marketing
– Note that both explicit and implicit strategies and agendas must be
considered
American Cancer Society Cause
Marketing Guidelines
• Product match: “only with products that meet
strict guidelines and scientific standards for
reducing the risk of cancer.”
• Brand effect – positive impact on ACS brand
• Risk to ACS “assessed on a case-by-case basis”
including company ownership, holdings, public
“baggage”
• Customer value: “relationships must generate
additional value for the customer: education,
goodwill, financial.” (italics added.)
• Reach – ultimately nationwide
www.independentsector.org/mission_market/ACS_guidelines.htm
American Cancer Society Cause
Marketing Guidelines
• Revenue – need “fair revenue” for use of ACS
trademarks
• Best of Breed – “Corporate partners must be
industry/category leaders”
• Maintenance and internal infrastructure – must be
proportional to returns received; lower maintenance/high
yield opportunities to be favored.
• Measurements of mutual success – appropriate metrics
developed for each relationship, e.g., lives saved, brand
value to ACS, ability to meet corporate partner objectives
• ACS local organization involvement – case-by-case
negotiation among ACS, local affiliates, and partners
www.independentsector.org/mission_market/ACS_guidelines.htm
Modern Cause Marketing:
The (RED) Case Study
• What is (RED) / (PRODUCT) RED?
(RED) is a business model created to raise
awareness and money for the Global Fund by
teaming up with the world's most iconic brands
to produce (PRODUCT) RED branded products.
A portion of profits from each (PRODUCT) RED
product sold goes directly to the Global Fund to
invest in African AIDS programs, with a focus on
women and children.
Source: www.joinred.com
(RED) Case Study Continued
• Is (RED) a new charity?
(RED) is not a charity. It's a business model
designed to create awareness and a
sustainable flow of money from the private
sector into the Global Fund, to help
eliminate AIDS in Africa. Consumers buy
(PRODUCT) RED, and at no cost to them,
money is sent directly to the Global Fund.
Source: www.joinred.com
(RED) Case Study Continued
• How does (RED) work?
• Established brands partner with us and license the (PRODUCT)
RED mark to create (PRODUCT) RED products and services.
(PRODUCT) RED partners send a portion of the profits made on
(PRODUCT) RED products directly to the Global Fund, to fight AIDS
in Africa. The consumer does not pay extra for this. (RED) never
handles this money – it is sent directly to the Global Fund.
• A licensing fee for use of the (PRODUCT) RED mark is charged to
manage and market the (RED) brand. This fee is paid by
(PRODUCT) RED partners, and does not infringe on the amount of
money they send to the Global Fund via sales of (PRODUCT) RED
items.
Source: www.joinred.com
(RED) Case Study:
Multifirm Cause Marketing
•
Which brands are involved so far?
American Express
Apple
Converse
Dell
Emporio Armani
Gap
Hallmark
Microsoft
Source: www.joinred.com
Concluding Thoughts
• What is your strategy?
–
–
–
–
Corporate
Marketing
Stakeholder management
Issue management
• What are your vulnerabilities?
– Prior to cause marketing initiative
– Associated with cause marketing initiative
• Who are your customers? A firm that deals with other
firms will probably not have the same incentives for
cause marketing as a customer facing firm (e.g., a
mining company versus a running shoe company)
Concluding Thoughts
• Understand your respective institutional frameworks.
The firm must try to understand NGOs, and NGOs must
try to understand firms
• Have an entrance strategy, and two exit strategies: one
for when things go right, and another for when they don’t
• How flexible can your partner be? Know their agenda,
know their membership characteristics, and know
enough not to ask or expect them to act outside their
culture or knowledge base
– A ecosystem oriented NGO is not a good partner for a high
technology solution to paper demand management