Capitalism’s Moral Compass: The Argument for Cause-Based Marketing

When I hear the word ‘altruism,’ I think of an Ayn Rand quote from The Fountainhead – “Altruism is the doctrine which demands that man live for others and place others above self.”  However, it seems that in the corporate world we have found a way to put both “others” and “self” on an equal playing field via cause-based marketing.  This has resulted in an interesting melding of altruism and capitalism, allowing for companies to both do good, and do well.  Some might say that capitalizing on charitable good-doing to boost sales may detract from the spirit of the action – but if both parties benefit, is there a problem?

Doing Good

Take TOMS Shoes, for example. TOMS is a for-profit company that also has a non-profit subsidiary, Friends of Toms.  Toms is a fairly young company, founded in 2006, and has marketed itself with cause-based marketing – using its consumer reach to help benefit impoverished children, while also generating profit.  It is this type of marketing, the marketing aimed to benefit a cause or charity, which has been dubbed “caring capitalism” or “profits with principles.”

TOMS is not alone; cause-based marketing is a growing phenomenon.  According to the Cause Marketing Forum, “cause sponsorship is predicted to reach $1.84 billion in 2014, a projected increase of 3.4% over 2013.”  With this substantial an amount of money being invested, it is no wonder that marketers are often asked to quantify the added-value of these executions.  In our project work at Analytic Partners, we have also seen this investment take the shape of purchase-based donations, cause awareness generation (e.g. Breast Cancer awareness), donation based support, or marketing support linked to the cause.

Doing Well

In doing good, how does a company do well?  Some have argued that the actual desire to do good is what drives doing well – it is the authenticity and motivation behind the activity that is important.  This idea certainly has merit. If we look again to the TOMS example, we find an interesting case study when comparing to the Skechers brand, BOBS.  Skechers launched the BOBS brand, using a similar concept (donating shoes for every pair sold) and look and feel as TOMS Shoes to parlay into sales for the company.  However, by copying the concept so exactly instead of taking their own approach to the cause, consumers have questioned the motivation behind the product and the charitable act, thus generating negative PR for the product and its associated marketing efforts.

This idea can be linked to our findings at Analytic Partners.  In our studies, we have found that the key to driving sales via cause-based marketing is the creation of a connection to the brand.  It is this brand connection that lends to the authenticity and credibility of the company’s claim and action – connecting consumers with both the brand and the cause.

Some other key tenets Analytic Partners has found in “doing well” with cause-based marketing are as follows:

• Use a holistic marketing campaign to help build positive PR - tie in the cause across TV, digital, promotions, etc. to hit multiple consumer segments and deliver a unified message
• The campaign should include a specific call to action (e.g. required purchase to result in donation)
• Create products or packaging that ties back to the cause - this serves as a reminder to the consumer as to why they should purchase the product
• Create marketing that spans across multiple brands or a larger segment of the business to drive scale

So, can we put a dollar value on charitable action? The answer is yes – and it can pay out (2-4x that of average marketing ROI). Just don’t do it for purely self-serving reasons.

For more information on how Analytic Partners can help your company benefit from tactics such as cause-based marketing, please visit our Services page.