Cause Marketing is defined as a type of Corporate Social Responsibility (CSR) in which a company’s promotional campaign has the dual purpose of increasing profitability while bettering society.
Or, more colloquially: cause marketing occurs when a company does well by doing good.
These definitions reflect CauseMarketing.com’s focus, which views cause marketing from the perspective of marketing executives and directors of corporate social responsibility at for-profit companies.
Other Definitions of Cause Marketing
“You buy. We’ll give.”
In 1988, a seminal article in the American Marketing Association’s Journal of Marketing described Cause-Related Marketing as: “The process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives.” In other words: “You buy. We’ll give.”
While an important academic contribution at the time, that characterization of cause marketing is too narrow. While “You buy. We’ll give” offers remain popular even today, there are now many other forms of cause marketing which are not triggered by a purchase, such as when TOMS gave a pair of shoes to a child in need for every post to Instagram of a barefoot photo accompanied by the hashtag #WithoutShoes.
Cooperative Effort for Mutual Benefit?
A slightly broader, but still inadequate, definition of cause marketing refers to: “a type of marketing involving the cooperative efforts of a for-profit business and a non-profit organization for mutual benefit.”
The fundamental problem with that characterization of cause marketing is the helpful but unnecessary dependence on a non-profit partner. Businesses sometimes, but not always, implement cause marketing by coordinating with a non-profit organization.
- Case in point: Without a non-profit partner, American Express founded Small Business Saturday, which encourages consumers to shop local and support the ‘mom and pop stores’ in their neighborhood (presumably while using an American Express card for the purchases).
Corporate Social Initiatives
In 2004, Philip Kotler and Nancy Lee authored an excellent book on Corporate Social Responsibility, which segmented most CSR activities into six types of corporate social initiatives:
- Corporate Philanthropy
- Community Volunteering
- Socially-Responsible Business Practices
- Cause Promotions
- Cause-Related Marketing
- Corporate Social Marketing
All six of those corporate initiatives involve doing good. But only a subset of those CSR activities satisfy a defining criteria of cause marketing: doing well by doing good.
The first two types of CSR are generally not considered cause marketing:
- Corporate Philanthropy: Sadly, most companies do not get the credit they deserve for their philanthropy. In an original study conducted by CauseMarketing.com, consumers estimated that Walmart donates $36 million per year to charity. The actual figure is $301 million. Wal-Mart Inc. can take solace that its extensive reputation advertising at least gets Walmart mentioned among America’s most generous companies.
- Community Volunteering: Coordinated, company-wide volunteering may be good for team-building and employee retention. But even when employees volunteer while wearing company-branded shirts, the activities are usually not visible enough to impact consumer preference at scale.
The third type of CSR, Socially-Responsible Business Practices, is generally not implemented as cause marketing. But there are exceptions:
- Example 1: When a company places a paper recycling bin near a photo copier, society is better off. But the company recycles scrap paper with no expectation of saving money or increasing revenue. Recycling is socially-responsible and does good, but is not cause marketing.
- Example 2: For the sixth consecutive year, Corporate Responsibility magazine recognized the makers of Campbell’s Soup among the Top 20 Best Corporate Citizens, earning that status for sustainability efforts such as reducing agricultural water use by 18% and reducing fertilizer-related emissions by 12%. These accomplishments are showcased in Campbell’s CSR Annual Report, as well as on Campbell’s CSR website — which relatively few consumers will ever see. So, while Campbell’s sustainability efforts do a lot of good, they are not cause marketing.
- Example 3: Starbucks promotes ethically-sourced coffee. Whole Foods promotes sustainable seafood. Clorox promotes Green Works (a non-toxic cleaner). These socially-responsible products are all promoted with the hope of increasing marketshare by attracting consumers whose purchase decisions are influenced by environmental concerns. So, that is cause marketing.
The remaining types of corporate social initiatives are unequivocally forms of cause marketing:
- Cause Promotions are company-funded advocacy campaigns, in which the for-profit business has a motivated self-interest. Sometimes that self-interest is direct and obvious, like when The Body Shop (a retailer of “cruelty-free” cosmetics) promoted a ban to stop testing cosmetics on animals. Other times, the cause promotions simply establish affinity with a target market, like Pantene’s Strong is Beautiful campaign.
- Cause-Related Marketing occurs when a company offers to make a donation to a charity based on product sales. Also known as “You buy. We’ll give.”
- Corporate Social Marketing is a behavior-change campaign intended to improve public health, safety, or the environment. While protecting the public, the self-interest of many Corporate Social Marketing campaigns is to reduce product misuse that could lead to regulation and loss of revenue. Behavior-change cause marketing by beer companies urge their customers to “drink responsibly.” Behavior-change cause marketing by mobile phone companies urge their customers to not text while driving.