Edelman’s ‘good-purpose’ study in 2010 found that 64% of global consumers believe it is no longer enough for corporations to give money; they must integrate good causes into their everyday business. With a growing consumer conscience of social and environmental issues coupled with consumers’ desire to see companies do more to address these issues, CRM has gained momentum by profitably combining social and commercial marketing goals and proving to be win-win situation for all involved.
Business in the Community in the UK defines cause-related marketing or cause marketing as: “A commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit.” Cause marketing has grown steadily in the new millennium reaching $1.6 billion in 2010. When implemented appropriately, CRM has the potential to attract new customers, reach niche segments, increase sales of products and services, create a positive brand image, and raise large funds for a social cause (Kotler and Lee 2005).
Aligning Strategy with CSR
RM campaigns are often linked to a company’s CSR strategy and have proven to be an effective marketing tool to promote CSR. Both CSR and CRM provide companies with reputational gains but should not be used interchangeably. Rather, CRM is most functional when used as an instrumental role within a company’s CSR strategy. Differences between the two include cause specific (narrow) vs. cause unspecific (broad); being carried out by a certain department (marketing and communications) vs. integrated into all departments; and outward (attracting consumers) vs. inward and outward (employee satisfaction included) communication. It is therefore important that CRM strategy is aligned with a company’s CSR strategy in order to achieve its goals.
International and regional companies experimenting in the field, such as Body Shop’s Ruby Campaign, MAC Cosmetic’s Viva Glam, IKEA’s Sunnan Lamp, Magrudy’s Bookshop and MSF, Persil and Tamanna, BBAC and Kunhadi and many more, have shown that CRM strategies can deliver results for all parties involved.
For the third consecutive year, Persil and Tamanna have been collaborating on an exemplary CRM campaign, while BBAC has just recently re-launched its CRM campaign with Kunhadi. Responsible Business spoke with them about what makes a CRM campaign successful.
Tamanna was founded in December 2005 to make the wishes of children with critical illnesses between the ages of 3 and 18 come true. It has realized 890 wishes to date. “It is a positive NGO, it turns tears into laughter, and the effect of realizing a wish is very amazing,” says Diala El Fil, president of Tamanna. This also came to the attention of Henkel’s Marketing Manager, Philip Kaady, in 2008 when Tamanna and Persil embarked on a long-lasting partnership in the form of a CRM campaign. Without raising the price of its detergent, Persil has been donating 1,000 LBP for each bought item to Tamanna for three years to realize more children’s wishes. Now in their fourth year of collaboration, cause-related marketing is seemingly working out for both of them. “It is a win-win situation for both of us. They are using the name Tamanna to sell their products and are paying us about $200,000 per year to realize the wishes of the children, which means we are not busy trying to collect money but can focus more on realizing the wishes,” says Kaady.
Another form of cause-related marketing are affinity credit cards offered by banks. American Express coined the term CRM during their 1983 initiative to raise funds for the restoration of the Statue of Liberty, donating money to the cause each time a customer used their charge card. Since then, this form of collaboration has been become very popular among banks throughout the world. BLOM bank’s MasterCard Giving card, for example enables clients to contribute to the Lebanese Mine Action Center which is actively clearing Lebanon of landmines and cluster munitions.
BBAC and Kunhadi have recently relaunched the Kunhadi Card. From the initial purchase of the card a significant amount is donated to Kunhadi, and with every transaction from the card the organization receives a further 1%. Kunhadi has a supporter base of 4,000 people, and friends and family have already switched to the card.
Motivation of Firms
CRM can be a long term business decision. By strategically aligning the company with a social cause, a company can build stronger and more enduring relationships with the community. “Through CRM, we are able to help non-profit organizations raise funds to invest in their projects by encouraging our clients to support charities while at the same time raising our brand profile and image,” says Tarek Bilal, marketing manager at BBAC. Overall BBAC has seen an increase in the demand for the causes and in the sales of the related products, which has also been due to a recent increase in marketing efforts both internally and to the public. Although direct linkage between the sales volume of the sponsor and donations have motivated companies to engage in such campaigns, it is not always easy to measure the effect it has on the bottom line.
“It is very difficult to quantify exactly from the position of the brand in terms of how much demand is coming from CSR, from innovation, from advertisements on TV, from celebrities, but it definitely helps the equity of the brand and helps build and strengthen the image of the product,” said Kaady. Research conducted by Persil when it first launched the Tamanna campaign found that its consumers sincerely appreciated its efforts and were proud of supporting the cause. It even found that consumers of competing brands appreciated it and would at least try it once in support of the cause.
The benefits of these types of collaborations are plenty. Bilal summarizes the benefits for BBAC as “positive effect on the bank’s image, adding value to the corporate shareholders, positive public relations, improved customer relations on the long term, new marketing and communication opportunities, and increasing sales and profits.” CRM is an effective way of enabling a firm to live up to their corporate values and communicate these to key stakeholders. “We believe in practicing good corporate citizenship and we also believe in CRM as a long term business decision through which we can build stronger and enduring relationships with the community by strategically aligning the bank with a social cause,” Tarek Bilal stresses BBAC’s motivation to collaborate in CRM projects.
Motivation of NPOs
CRM can provide non-profit organizations (NPOs) with higher levels of confidence and trust. Valuable to any business relationship, it can be particularly helpful in countries such as Lebanon where trust in NPOs is low. “When working with the private sector, especially with a reputable bank for example, people gain greater trust in the NGO, which consequently inspires other companies to collaborate with you as well because they see that you are in a long-term collaboration with a trustable company,” said Mirna Mikdashi, the public reltaions and fund raising responsible at Kunhadi in recollection of the organization’s successful past and current collaborations. Tarek Bilal notes further that with these collaborations come a growing pool of supporters as well, “CRM is giving an opportunity for non-profit organizations to promote their cause through the bank’s financial resources and the opportunity to reach possible supporters through the bank’s customer base.” Tamanna experienced similar effects. “Persil introduced Tamanna to all of Lebanon. Thanks to this partnership, Tamanna has had big presence in the media and this has built our reputation; people know us and they trust us,” says El Fil, referring to the additional motivation that stems from the awareness outreach that collaborating with the private sector can induce. Having a trustworthy reputation and a history of successful collaborations to show for can be of great benefit when approaching corporations, but new organizations should not shy away from doing the same.
BBAC and Kunhadi first collaborated in 2007, “in belief of the cause that it supports and at the same time the bank wanted to encourage the newly established association back then and push it forward towards fulfilling its mission. In subsequent years, Kunhadi proved itself as a worthy association and has also played an active role in spreading awareness on road safety through its diversified partnerships, sponsorships and nationwide network,” says Bilalabout why BBAC chose to work with Kunhadi and continues to do so.
Success Factors of CRM
It is widely acknowledged that a successful campaign can have significant benefits for both parties. Bilal views the successfulness of a CRM campaign to be measured along three main factors, “the level of awareness raised for the cause and in return funds flow, the increase in the sales of the relevant product or service, and brand awareness.” Measuring the bottom-line success, especially with regards to the many non-quantifiable benefits CRM has, such as brand awareness, is not always easy but in light of changing consumer attitudes and social conscience, CRM seems to be meeting everyone’s needs. According to Blumberg and Conrad (2006) success factors for CRM are relevance, commitment, integrity and credibility.
For a CRM campaign to be successful it is important to identify a non-profit organization that makes sense and can interchangeably align itself with the company’s mission. “There must be a strong bond between the brand, what it represents, its image and mission along with the association,” says Philip Kaady. Alignment can occur on numerous grounds; for example, alignment of the company culture and mission with the cause, alignment of a stated philanthropic preference with the cause type, or alignment of company product with Non-Profit Organizations (NPO) needs. Alignment can also take place if it caters to a similar geographic reach (local, regional, international) or if it addresses an existing relationship such as a board member association, that can be built upon. For BBAC “the selection of non-profit organizations is based on the causes they support and on how much their causes are aligned with our core values and CSR strategy, as well as related to the Bank’s targeted segment,” says Bilalon balancing company core values and cause.
Most importantly, partnerships should be made between NPOs and corporations with similar values. Kaady remarks that companies face a real challenge in finding the correct association, one that fits the brand image and strategy. The Persil consumers in Lebanon are mainly mothers and housewives. “By associating with Tamanna, Persil not only supports housewives and mothers with the laundry inside the house but also with the real life challenges they face with their children,” he noted.
In addition to relevance, commitment by the company to the cause has been mentioned throughout CRM literature as a means to more successful CRM relationships. May Abdouny, communication officer at Kunhadi, stresses on the idea of mutuality when she says, “It is important that the company you are collaborating with is also interested in the message you are giving out and not only the exposure it is getting. NPOs must make sure the company is giving its best to promote the idea in its own environment as well.”
With the re-launch of the BBAC Kunhadi card, the new stronger design reflected BBAC’s clear bid to step-up its CRM operations. Bilal stresses BBAC’s sincere commitment to the Kunhadi card, “Recently we increased the scope of effectiveness of these collaborations through increasing our marketing efforts, and creating awareness about the causes within the organization and externally to the general public through different channels (digital, outdoor, press, PR, etc.), which is leading to an increase in the sales of related products in addition to more involvement and care from our customers and employees in the causes we are supporting.”
“The primary aim of our CRM collaborations is to give back to the community through supporting the non-profit organization in their projects which is creating awareness for their causes and saving lives, at the same time roviding a permanent source of funding for the non-profit organizations to support them in their project and assure their continuity,” he adds.
NPOs must also show sincere commitment for its cause in order for the collaboration to work out. “It’s all about dedication really,” adds Abdouny. “When sponsors see that you are really dedicated to the cause you are doing, they will approach you eventually and when you work together, they will be just as dedicated as you are. If you are dedicated, people will see that. If you are serious about wanting to change your country, you will.”
CRM includes both short- and long-term forms of collaboration, however, the goal should ultimately benefit a long-term goal. Even though adhoc sponsorship is not the most sustainable form of collaboration, El Fil says NPOs need both to survive and event sponsors can show commitment as well. BankMed has also been sponsoring Tamanna events and collaborating on fundraising schemes for 5 years consecutively.
Integrity & Credibility
A consistency of actions, values and methods is key in a successful partnership. At the highest instance transparency and accountability of the campaign and process confirm this consistency. “People want to see where their money is going,” El Fil emphasizes, adding that “the association must be very organized and transparent. The company will feel it.” One of the aspects that caught Henkel’s attention was that Tamanna was audited by PricewaterhouseCoopers and is extremely transparent in everything they did. Every month Tamanna sends a financial report of their activities to Henkel along with the name of the child, his or her wish, and a breakdown of the exact costs. Administrative costs are also kept at a minimum as Tamanna has 2 full-time staff and 18 contracted workers and its mission is clear. “Our logo, our slogan- turning tears into laughter, our website, everything is clear and straight to the point. Sometimes you log onto organizations’ websites and you don’t really know what they do,” Diala said.
When developing effective campaigns, firms and partnering causes must consider the factors that can entice consumers to participate. One of these factors is the credibility of the support and fair partnership. This is why Persil changed its tactic early on in its campaign to mark exactly how much of the product price would go to Tamanna. “The more specific you are, the more direct and straight forward you are in the cause you choose to support, the better people will understand your mission and the more you will achieve your objectives,” Philipp Kaady says. Persil is also very persistent about reporting back to consumers on how many children they have helped and how much money was donated in order to maintain the trust and credibility.
Reporting back is one of the most important aspects of a campaign according to Philip Kaady. “The issue is not about advertising and saying we did this and that, it’s a responsibility. If you are socially responsible you need really to live up to it. You need to be very credible and transparent and you need to come up to consumers and the community and tell them and update them year after year about the development of the project, what is happening and why they are buying the product,” he says.
Abdouny agrees and highlights transparency as an integral part of Kunhadi’s success and good reputation, “We can’t just say that we made crossings in Hamra safe, we have to be very specific, to show them our ongoing developments and achievements.
Risks and Limitations
This win-win situation leaves little room for risks and limitations but they cannot be left on the sidelines. Although CRM often brings new cause supporters on board, it is sometimes found to be limited to customers with high cause affinity and in rare cases can have a negative effect on customers with low cause affinity or those who oppose the cause. This is why companies will more often than not decide to collaborate with organizations whose cause is appealing to a large audience and promotes a positive message since CRM is a marketing strategy afterall. This tactic is criticized by the NPO community as corporations will make selections based on perceived attractiveness to customers rather than the needs of the charity and organizations whose causes are “less marketable” or are not high-profile causes, or are chronic problems. If a partnership is disproportional, where the company uses the NPO to improve image for its promotions but gives little in return, this could turn into a risk for both parties, devaluing company reputation when it is made public. “Before any collaboration, you should know the worth of what you are giving them and what they are giving you so that the trade will be a fair one,” says Abdouny emphasizing that in order for a CRM campaign to be successful it must ensure that all parties benefit.
The effectiveness of CRM is clear. It is up to committed and creative businesses and organizations to take this marketing tool to the next level and come up with new inventive strategies that duly align the company’s mission and cause while benefiting society.
Source: Responsible Business Magazine