The Genesis of Cause-Related Marketing
American Express Makes History
CRM (Cause-Related Marketing) burst onto the national scene in 1983 when American Express joined the project to restore the Statue of Liberty and Ellis Island. AmEx spent $6 million in a highly visible advertising campaign, making sure everyone knew what they were doing. Specifically, American Express promised that during a three-month period, they would make the following donations to the Statue of Liberty/Ellis Island Restoration Fund:
- a percentage of each purchase made with an American Express card
- a percentage of each AmEx “travel package” over $500
- a percentage of sales of American Express Traveler’s Cheques
- a percentage of each new card application
The results of the campaign made marketing history. AmEx card use rose 28 percent, new card applications rose 17 percent, and the campaign raised $1.7 million for the Statue of Liberty and Ellis Island.
American Express even gained a benefit they didn’t pay for: the campaign was so successful that most people thought they were an official sponsor of the restoration, although the company had never actually paid to be one.
Event Sponsorship
Tanqueray Gin Launches the AIDS Rides
Perhaps more than any other form of strategic alliance, event sponsorship holds something for everyone. Take the case of the Tanqueray Gin AIDS Rides. The first (bicycle) ride, from San Francisco to Los Angeles in May 1994, changed forever the face of fundraising events for AIDS charities. The seven-day event raised approximately $1.6 million and spawned a series of rides across the country. By the end of 1997, there had been a dozen rides and total proceeds topped $40 million. In 1998 rides were scheduled for San Francisco to Los Angeles, Boston to New York, Minneapolis/St. Paul to Chicago, and in Washington, D.C., and Texas. Many people would be surprised to know that the first ride was designed not as “a charitable activity, but as a successful brand publicity event” by Tanqueray’s brand development team.
Sponsorships are particularly well suited to a variety of corporate goals. Marketing goals can be met by designing an event to appeal to a target market. Retailers can be brought in to stimulate sales and traffic at the retail level. Merchandising opportunities can be built in to sell event-related products, which provide lasting in-home reminders.
Community affairs goals can be met by designing an event that responds to needs in the community and includes the community in its implementation. Employee relations needs can be met by building in employee participation. Events can build pride and provide perks for employees. Philanthropic goals can be met by picking an event that falls within your corporate giving policy. Public relations goals can be met by designing an event that is unusual and therefore of interest to the media.
A Team Approach to Volunteering
Target Stores and the Good Neighbor Program
Target Stores has a strong commitment to making its communities healthy places in which to live and raise a family. One of the ways Target Stores expresses that commitment is by actively encouraging employee volunteers. The Good Neighbor Program, administered from the company’s corporate headquarters in Minneapolis as part of its corporate giving program, has an annual budget of $250,000, which is spent to support employee volunteer efforts in each of the company’s locations. In 1996, employees and their families contributed over 168,000 hours of community service.
The Good Neighbor Program emphasizes the use of teams of Target employees to solve community problems. Local employees choose the cause. Projects range from the March of Dimes Walk America pledge drive, to “Paint-a-thons” in which teams paint the houses of the elderly, to “Adopt-a-School” programs in which teams of workers tutor children, organize carnivals, chaperon field trips, and build playground equipment. Joint efforts include Meals-on-Wheels, Special Olympics, Big Brothers/Big Sisters, and Boy Scouts/Girl Scouts. Employees do their volunteering on their own time. Headquarters urges each Target locations to do at least one volunteer project a year. Virtually every location participates. Some do the bare minimum, most do more. Some do as many as fifty projects.
Why does Target require teamwork rather than individual volunteering? In mercenary terms, Target wants the maximum return for their investment. The company believes that by working together, employees build a spirit of teamwork that carries over into the workplace. The company also believes that by sending teams of Target workers out into the community, it builds the company’s presence there. Teams of Target workers, all wearing Target t-shirts, make a strong statement that Target Stores cares about its neighbors.
Vendor Relationships: Finding New Products
Merck and the Costa Rican Rainforest
New product development is the lifeblood of any company that aspires to be more than a one hit wonder, but it can be one of the most costly aspects of doing business. Partnership with a nonprofit can open the doors to new product lines at a far lower cost than R&D or even the acquisition of an undervalued competitor... Merck is hoping its strategic partnership in the Costa Rican rainforest will sprout new products
and huge profits.
Merck is one of the world’s largest pharmaceutical companies, with a strong sense of self-interest in developing new drugs from previously unknown sources. One of these sources is Costa Rica’s National Institute of Biodiversity (INBio). In a partnership with Merck, INBio collects a wide ranges of plants and insects that may have the potential of becoming new medicines. They supply Merck with the specimens, and if any product is developed from those samples, then Merck donates to the National Parks System and INBio. In addition, Merck provides direct support for conservation of the rainforests and its scientific team provides training for local scientists.
In-Kind Donations: Waste Products
New Covent Garden Soup Company, Starbuck’s, Hewlett-Packard, ZooPoo
Some nonprofits virtually owe their existence to corporate waste. This is especially true for food banks, which receive a portion of their foodstuffs from individuals, but get the lion’s share from food processors and retailers. Most of the food donated is mislabeled or otherwise improperly packaged. It may be unfit for commercial sale, but it feeds programs for hungry and homeless people nationwide. New Covent Garden Soup Company began its relationship with Crisis (the national charity for single homeless people in the U.K.) because they were looking for someone to take their surplus inventory off their hands. Starbuck’s Coffee, with headquarters in Seattle, prides itself on selling only the freshest beans. It gives its older beans to local food banks, which are happy to serve the classy brew to their clients.
In Englewood, Colorado, a Hewlett-Packard sales office was able to find a way to use the Styrofoam peanuts that come with their products. They donate them to the Boy Scouts, who sell them to Mail Boxes Etc. and other companies. The profit goes for scholarships to send needy boys to the Scouts’ summer camp.
Last but not least is what we think is the ultimate donation of waste products. Twenty years ago the Bronx Frontier, a nonprofit community-based organization, started an earned income venture that turned poop into profit. They made a deal with the Bronx Zoo to remove and package animal manure and sell it as fertilizercalled ZooDooin the Bloomingdale’s Christmas Catalog. The fertile idea was a hit, selling 30,000 bags that year. The idea is going strong today, catching on with zoos around the world. In Perth, Australia, they call it ZooPoo.
Excerpted from Making Money While Making A Difference by Richard Steckel et al; High Tide Press, 1999.
