Do Well While Doing Good
In business, there is something called CRM, or customer relationship management. Generally, it is easier to retain current customers, than seek out new ones; this is why it is smart for companies to put together a strategy to keep their customers happy to retain their business.
With the advent of social media, there is a new form of CRM – Social CRM. Social CRM is a database strategy that engages and retains current customers within a social context. Brands have fully jumped on board with social media, and with that they are finding new ways to engage their customers. No longer is Facebook simply used to push out marketing mumbo-jumbo, it is a place for customers to express their opinions and engage with the brand. Many times, this engagement is produced through contests or sweepstakes online. Through entering, or “opting-in” to a contest, the entrant gives the company permission to contact them in the future. A large database is build with the information you provided the company, creating a strong customer demographic database.
While I could go on about the exciting new world of Social CRM, I am equally (if not more) excited about the idea of another kind of CRM – Cause Related Marketing.
What is Cause Related Marketing?
Cause Related Marketing (CRM) is a relatively new concept. It is the intersection of brand marketing for self-serving reasons, and marketing a cause for the greater-good.
Specifically, CRM is an agreement between a business entity and a nonprofit to raise money for a particular cause. The business entity expects to profit by this arrangement by selling more products and by enjoying the “halo” affect of being associated with a respected nonprofit or cause.
Grant Space explains “according to cause-marketing consultant Jocelyn Daw, cause-related marketing is a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to:
- create shareholder and social value
- connect with a range of constituents (be they consumers, employees, or suppliers)
- communicate the shared values of both organizations”
CRM is distinct from corporate philanthropy because the corporate dollars involved in CRM are not outright gifts to a nonprofit organization, so they are not treated as tax-deductible charitable contributions.
The “reknown” American Express CRM campaign in the 80’s was one of the first of its kind, and has paved the way for other organizations such as Coca Cola, Starbucks, Johnson and Johnson, and many more.
How the American Express Campaign Worked
It all began in the early 1980s when American Express joined with the nonprofit group that was raising funds to restore the Statue of Liberty.
American Express gave a portion of every purchase of their credit card to Statue of Liberty restoration fund, and an additional amount for every new application that resulted in a new credit card customer. The company complimented this with the launch of a $4 million advertising campaign.
The Restoration Fund raised over $1.7 million and American Express card use rose 27%. New card applications increased 45% over the previous year; accomplished with a three-month campaign.
Everyone involved was a winner…the nonprofit cause received needed funds, American Express increased sales of its product and achieved a reputation for social responsibility. American Express went so far as to trademark the term “cause related marketing.”
Everyone involved was a winner. The Statue of Liberty was restored, and American Express received valuable press and increased sales.
The Win-Win Marketing Campaign
The main goal of cause related marketing is to do well while doing good.
People and businesses should not be ashamed to partner with initiatives that benefit the business as well as the not-for-profit initiative. Too many times, people believe that it is more valiant to give something, with no interest in a return for themselves – but this is not the only way to help the world outside your front door.
Side note: Many CRM campaigns since American Express’ pioneering exploits, have used social media as a platform for their CRM efforts. So maybe social CRM, and cause related marketing (CRM) are more closely related than we first thought?
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 Canada License.