One Place Entrepreneurs Should Be Allocating Their Marketing Budget But Aren't For a number of reasons, founders and executives should be putting more of their marketing dollars in this underserved area.
By Punit Dhillon Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
There's been a considerable shift in the business landscape over the last few years: More companies are starting to place a priority on making a social impact alongside profit – so much so that solely pursuing a bottom line just doesn't cut it anymore.
For instance, a lot of companies are implementing the idea of a "triple bottom line," a measure that places people, planet and profit on equal footing. TOMS, Warby Parker and Patagonia are just a few that have made this shift. Taking it a step further, B Corp. certification actually makes it legally binding for companies to answer to the needs of society and the environment. Etsy, Ben & Jerry's and Agora Partnerships have jumped on board.
While charitable donations are a good start, the more progressive organizations are realizing that social good involves an even more proactive approach to making a difference -- one that actually weaves social impact into its business model.
Related: The Triple Bottom Line Goal of Sustainable Businesses
While on paper it seems like a great idea, it can be tough to implement. The challenges of launching social impact initiatives within an existing business model include resources, logistics and planning. But what a lot of companies may not realize is that they already have a reserve to tap into: The marketing budget. This bucket of money doesn't need to be used for just online ads, social-media strategies or YouTube videos. Marketing dollars can also be used for social-impact initiatives while also increasing the awareness of the company. It is a win-win. And a lot of the work is already complete.
The funding is there and a creative team is already in place. All that's left is for you, as the leader of your company, is to decide if, and how, you want to execute your strategy.
Here are a few reasons why you should consider reallocating your marketing budget toward a social impact initiative:
Low cost, high return. Traditional marketing campaigns and ad spends can be costly and require a constant generation of new ideas to achieve your marketing goals. Also philanthropic donations don't generate the same attention anymore and creating these campaigns that can successfully compete with the noise of other outstanding ones is a growing challenge.
Reallocating your budget toward a social impact initiative will offer a potentially higher rate of return in terms of brand awareness and public relations but at a lower cost. Take a cue from progressive companies like Warby Parker and TOMS, who are redefining what community engagement looks like by integrating social good directly into their business models.
Related: Impact Investing for the Rest of Us
This approach means that every customer that interacts with the brand contributes to the cause and is left with not just the feeling of doing something good, but also making a positive impact in someone else's life. Chances are, they'll want to talk about it. We all know the power of word of mouth. Ultimately, all the money traditionally spent on advertising is diverted to the cause, which for the most part will market itself.
Improve corporate culture and employee retention. A social impact initiative doesn't just affect your community. It can also have a profound effect on your corporate culture and employee retention by offering an opportunity for your employees to stand behind a cause they're passionate about. Inspiration and connecting with the team is one of the most underused drivers of effective marketing – and one of the most powerful.
This is especially important for organizations with a high percentage of millennial employees. Indeed, 84 percent of millennials prioritize making a difference in the world over professional recognition and 92 percent believe business success should be measured by more than just profit.
Companies need to be able to accommodate the demands of Gen Y who are looking for opportunities that are about more than professional development. They want to make a genuine difference in the world. A company that also places importance on social good will help to attract talented candidates with goals that align with its own. Organizations that demonstrate that they care about not just profit, but also people and the planet are more likely to succeed in attracting and keeping talented and committed employees.
Related: Wannabe Social Entrepreneur? How to Navigate the Growing World of Impact Accelerators
Improves relational intelligence. Breaking down barriers and revamping the decision-making process to include different functions is integral to non-traditional marketing. Many consumer-facing organizations lack relational intelligence. They find it difficult to understand the many different kinds of relationships customers have with brands, as well as how to reinforce or change those connections. A social impact initiative can challenge your team to think "outside the box" to better connect with customers and establish a more meaningful relationship with them that helps advance your organization's strategic goals.
It's scalable. Your social-impact initiative can become scalable if you're doing it for the right reasons and with a clear direction. Regardless of how you do it and who you're impacting, the scalability of your initiative hinges on this. It's an opportunity to enhance the value of your organization's products or services to your customer base by offering a social good experience. So long as you have a clear purpose, you can scale up by creating different avenues that further the cause. If all goes well, your customers' experience will have deepened and the social cause may gain traction and become a movement on its own. From there, who knows where your social impact may lead you.
Related: 'Impact Entrepreneurship' Places Importance on Social Consciousness
