Why Shopping and Giving to Charity are the Perfect Match
Why Cause Marketing is on the Rise
Posted February 18, 2020 | Reviewed by Davia Sills
We may be coming upon the era of the enlightened consumer.
Time’s 2019 Person of the Year recently spoke to an attentive audience at the United Nations: “The world is waking up, and change is coming whether you like it or not.” While she was speaking about global warming, to some extent, her words also apply to other causes that people care about.
Whether it is needy children, endangered animals, or civil rights, people want to make an impact on causes they care about, not only at the voting booth but also with their spending. Indeed, when it comes to the things we buy, many of us are looking for options that offer both the value of getting something for ourselves and the warm feelings of making the world a better place. Globally, there has been a trend of consumers caring about the impact their purchase decisions have on the causes they care about.
Perhaps as a result of this, a growing number of businesses are embracing the triple bottom line, which includes the planet, people, and profits. Indeed, in August of 2019, the Business Roundtable, a group of 180 chief executive officers from major U.S. corporations, agreed that shareholder value is no longer the primary objective of corporations (New York Times 2019). They announced that their new understanding of the “purpose of a corporation” will include: the importance of investing in employees, delivering value to customers, and supporting outside communities.
While some were surprised, many of us who have been studying consumer behavior were not. Around the world, consumers are getting “woke,” and so are brands.
In a world where Greta Thunberg was named Time Person of the Year for 2019, there is no question that the world is shifting towards an awareness that pure selfish greed is dangerous and that some of that greed needs to be replaced with social responsibility and a desire to contribute to the world. Research has shown that while money and nice things can make us happy for a short time, beyond our basic needs, it is actually a sense of contribution and connection that brings the most long-lasting happiness.
As Greta Thunberg put it when addressing the UN in 2019, “The world is waking up, and change is coming whether you like it or not.” She also said, “We are all watching you.” While she was talking to politicians at the time, she has said the same thing to business audiences.
Meanwhile, around the world, people are demanding that the companies they do business with contribute more to the world than just providing goods and/or services. While customers are searching for more than just stuff, employees are searching for more than just a paycheck. Linking donations to charity to product purchases is one of the ways companies can inspire both their customers and their staff.
This linking of sales to donations is called cause-marketing, and such campaigns not only raise money for causes, but they also make consumers feel the warm glow of giving along with the happiness of getting something for themselves. From the marketer’s perspective, such campaigns can both increase sales in the short run and encourage stronger brand loyalty in the long run by creating a deeper level of consumer engagement. Customers are more likely to return to brands that make them feel the warm glow of giving every time they make a purchase.
People tend to seek out other people with similar values. Similarly, when consumers find brands that both offer products they like and support the causes they care about, a bond is created. Furthermore, a company’s employees can feel good knowing they work for a company that is supporting worthy causes.
Many companies, large and small, have embraced cause-marketing. However, my research has demonstrated that not all cause-marketing campaigns will be equally successful. One factor that might affect a company’s success is the nature of the product being linked to the charity.
More specifically, my research suggests that donations to charity work significantly better with pleasure-oriented products (like chocolates or luxury vacations) that are perceived as frivolous and/or fun than with task-oriented products (like toilet paper or dishwashing detergent) that are perceived as practical necessities (Strahilevitz 1999, Strahilevitz and Myers 1998). This may be because combining hedonic pleasure with helping a worthy cause can reduce the guilt sometimes associated with spoiling ourselves. My research also shows that brands that consumers don’t know much about may have the most to gain from getting involved with cause-marketing campaigns (Strahilevitz 2003).
Another factor that might affect how successful a campaign is may be whether consumers get a choice in what charity will be contributed to. Giant retailer Amazon lets customers choose from a wide list of charities with their Amazon Smile program. Meanwhile, smaller companies are thinking of creative ways to give, as well.
For example, a decadent dessert maker called Jars by Dani has partnered with a charitable giving start-up called Givz to allow the dessert maker’s customers an opportunity to allocate money among a shortlist of company-proposed charities or any charity of the customer's choice, every time they place an order. In today’s diverse world where not everyone supports the same causes, this type of flexibility may be increasingly advantageous for brands.
What if you are a therapist or a life coach? Cause-marketing can work for services like this as well. Offering to make a donation to charity every time a client pays their bill on time can be a great way to differentiate yourself from other therapists. It can also allow your clients to feel like they are helping both themselves and a worthy cause every time they pay their bill.
Research suggests this could be a win-win-win. Good for business, good for clients, and good for charity.
To learn more about companies involved in Cause Marketing go to: engageforgood.com/
Strahilevitz, Michal (2003), “The Effects of Prior Impressions of a Firm’s Ethics on the Success of a Cause-Related Marketing Campaign: Do the Good Look Better While the Bad Look Worse?” The Journal of Nonprofit & Public Sector Marketing, Volume 11, Number 1, Pages: 77-92.
Strahilevitz, Michal (1999) “The Effects of Product Type and Donation Magnitude on Willingness to Pay More for a Charity-Linked Brand,” Journal of Consumer Psychology, Volume 8, Issue 3, (March), Pages: 215-241.
Strahilevitz, Michal and John Meyers (1998), “Using Donations to Charity as Purchase Incentives: How Well They Work May Depend on What You Are Trying to Sell,” Journal of Consumer Research, Volume 24, issue 4, (March), Pages: 434-446.
“Shareholder Value is No Longer Everything Top CEOs Say,” by David Gelles and David Yaffe-Bellany, New York Times, August 19, 2019