Cause And Effect
This story appears in the November 2000 issue of Startups. Subscribe »
Now, I fully concede that I am a marketing geek. I love how I make my living, so much so that I can single-handedly induce narcolepsy when I get going about the latest, greatest campaign I've seen or participated in. And my top "pet" marketing discipline is cause-related marketing, or CRM.
CRM is the mutually beneficial convergence of a business's ideals and objectives with a charity: The charity receives money, promotion and/or in-kind donations from a business, and the business associates itself with a cause that resonates with its customers, builds brand awareness and contributes in a socially responsible way. American Express started the CRM movement in 1984 when it donated a portion of customer purchases to restore the Statue of Liberty. The campaign earned $1.7 million in just a few months, and a new facet of marketing was born. More recently, Maxwell House worked with Habitat for Humanity in the "Build a Home America" program. Maxwell House made cash contributions and provided volunteer labor to build 100 homes nationwide in 100 weeks.
If you have any doubt about the power of CRM, consider the following compelling statistics from a 1999 Cone/Roper report: 61 percent of consumers agree that CRM should be a standard business practice, and 65 percent say they'd be likely to switch brands or retailers to one associated with a good cause, when price and quality are equal. "[CRM experts say] cause-related marketing was once considered a 'nice-to-do,' but it's now a 'have-to-do,' " says Diana Kimbrell, owner of Kimbrell & Co., a Sausalito, California, CRM firm. "There's so much competition between products and services out there, socially conscious consumers are going to choose the companies that best represent their own social feelings. Companies have gotten wise to this and realized the best way to build brand loyalty is through an emotional connection-and that can be done by aligning with a cause."
Donna Latson Gittens, president and CEO of causemedia inc. in Watertown, Massachusetts, can attest. "Companies have discovered that CRM is a critical marketing ingredient that adds to their long-term reputations," says Gittens, whose firm specializes in a process called "causeMatch," which identifies and establishes socially and financially rewarding partnerships between companies and charitable organizations. "Forward-thinking CEOs are concerned and committed to involving their employees and other stakeholders in their communities where they do business."
For instance, Gail Klein Bentley, 30, founder of Working Weekly, a media and technology firm in Charlottesville, Virginia, has adopted day care as her company's cause, supporting it in three ways: by running a national grassroots campaign to call for legislation that makes on-site corporate day care more realistic; by encouraging companies to adopt local sliding-scale day-care facilities and provide funds for scholarships, supplies and facilities improvements; and by supporting a local sliding-scale center and offering on-site options for their own employees.
Bentley is so committed to her cause, Working Weekly will spend one-third of its marketing budget on CRM for 2001. "If we can market our brand and help make a difference, so much the better," she says. "Our goal is not just to make profits, but to change the world. What better way to do that than by supporting causes of interest to us and our market?"
Kimberly McCall is the president of McCallMedia & Marketing Inc., a marketing, public relations and business communications agency in Freeport, Maine. Contact her at (207)865-0055 or visit www.MarketingAngel.com.
Lead By Example
Seth Goldman first got the idea to work with the Crow tribe of Montana when he received peppermint tea samples from I'tchik Herb, a woman-owned company on the Crow reservation. Goldman, president and "TeaEO" of all-natural tea manufacturer Honest Tea Inc. in Bethesda, Maryland, wanted to work with I'tchik, but I'tchik was hesitant to enter a relationship with a company that was interested only in commercializing Native American culture.
Goldman, 35, set about the long process of finding a way to bring the tea to market that would make I'tchik and the Crow Nation full partners. With the approval of Crow Tribal elders, Honest Tea started a CRM program that includes buying peppermint from I'tchik and getting the Crow Nation's input on marketing. (The label is a photo of a Crow chief from the 1880s.) Honest Tea pays I'tchik a 75 percent royalty for First Nation tea sales, and a 25 percent royalty goes to the Pretty Shield Foundation, a nonprofit in Montana that helps Native American homeless and foster children. Honest Tea has bought $35,000 in peppermint so far and has sent back $1,500 in sales royalties to Pretty Shield and $3,500 to I'tchik.
Why does Goldman work to incorporate CRM into his company? "Given our name, our brand image and our core market of natural foods, our customers expect us to do more than just sell tea," explains Goldman, whose 1999 sales reached $1.1 million. "Bringing First Nation to market has truly been a labor of love for us. There were times when it looked like it wasn't going to happen. But it finally has, and we are delighted with the results."
Contact Sources
Honest Tea Inc., (800) 865-4736, www.honesttea.com.
Kimbrell & Co., 200 Gate Five Rd., #204, Sausalito, CA 94965, (415) 331-1334.
