Cause Marketing – Drive more sales by supporting your customers causes and become a pillar in your community.

by / / Strategy, Technology

The 5 Best Practices and the 10 Benefits They’ll Bring to Your Business

Any company would be crazy not to utilize “Cause Marketing” to their advantage as well as to the advantage of their community. Done properly, cause marketing can be the most profitable aspect of a customer loyalty program, as it satisfies consumers in more than one way—something other strategies fail to do. Loyalty programs that do not include these elements may be missing out on some of the many benefits that well-designed loyalty programs can bring to both merchants and their customers.

bigstock-Speech-bubble-dialog-illustrat-100897808

The great majority of customers will gladly churn for a cause. Research shows that 80 to 90% of consumers will spend more, put up with inferior products, as well as change their consumption habits if they feel that their purchase can help make a difference to a cause they care about or to their community. While this is helpful to any brand or business that implements a cause marketing initiative, it can be especially helpful to smaller businesses that are struggling to keep up with larger chains.

Currently, it’s no secret that small businesses and local organizations are getting the short end of the stick and we’ve already seen some grassroots movements, which indicate recognition on the part of larger corporations that helping out the little guys will only help them in the long run. One example is the American Express Small Business Saturday, the day after Black Friday. Just as smaller businesses are looking to attract customers, customers are seeking ways to have their shopping rewarded; they’re comforted by the idea that their purchases will help to make a difference in their community.

 Many people confuse Cause Marketing with fundraising. Although both strategies are important for community programs and small businesses, Cause Marketing differs from fundraising one hugely important way: the psychological effect on the consumer. Fundraising requires handing over a check or cash with no specific link to how the money will be used, or why it benefits the person donating (besides the gratification of helping out). Tying consumer transactions directly to donations creates a win/win solution that supports businesses, satisfies customers, and elevates the community at once.

The following is an outline of the 5 best Cause Marketing practices. These methods allow marketers to fulfill the needs of everyone involved; customers who want to do good for their community, businesses that want profits, and community organizations that need financial support.

 

The 5 Best Practices of Cause Marketing

  1. Tie the Donation to the Transaction: IMMEDIATE Cash Back Rewards (NOT Points!)

Points systems are widely used and customers know from experience that points can be difficult to redeem and confusing to calculate. Donating 100 points to a consumer’s favourite non-profit will not have the same meaning as a dollar amount. It doesn’t satisfy the customer’s desire to help in the same way that a concrete amount of cash does.

Here’s an example:

When Johnny comes into your business and spends $10 a designated percentage of his money (you set the reward & donation rate) is donated to the non-profit of Johnny’s choice AND Johnny earns a 5% cash back reward that he can use immediately or on his next visit. The emotional experience of doing good as well as being rewarded has the greatest impact when they occur at the same time.

An important aspect of this method of Cause Marketing is that the rewards occur with every transaction. When these benefits happen simultaneously customers feel valued and personally rewarded by the difference their purchase will make in their community. Simply stated, they feel better about spending their money.

Another key ingredient is for donations and/or rewards to be automated and happen in real time—no coupons mailed weeks later. Simplicity and convenience are of utmost importance to consumers who will notice and appreciate if their rewards can be redeemed next week, rather than next year. With this model, each purchase has benefits for them (cash back rewards) as well as satisfies their heartfelt need to use their consumer power for the wellbeing of their community.

Tying the donation directly to transactions ensures that the customer wins, the business owner wins, and the community wins—creating a greater success ratio and ROI for your business.

 

  1. Unlimited Tracking and Reporting for Groups and Subgroups

Smaller groups that may not be an official ‘non-profit’ but are part of a licensed 501c-3 need a way to raise money for themselves NOT the non-profit entity as a whole. Groups of all sizes need ways to raise money and even the smallest group deserves to be able to do so with complete accounting and the ability to report to their leadership. There are many groups for whom this would be appealing: little league teams, clubs, youth groups, who would love to raise money for their specific group and be rewarded according to their visits.

Cause Marketing reporting needs to be separated and available to both parties, so that donations can be easily tracked and computed. Solutions should have some sort of “Fundraising Dashboard” which, for example, has every member of the ‘collingwood youth group’ listed by account number, membership number, or some other sort of identification. This way, business owners can run reports on the ‘collingwood youth group’ and monitor not only the entire group but also keep track of individuals in terms of their spending and buying habits.

Merchants should be sure to have an easy way to set up groups online, so that they can register groups and designate the desired percentage or donation within minutes. This way, merchants can provide smaller entities with fundraising solutions for their small group and their group alone.

This type of tracking can also be utilized for contests between schools, athletic teams, and other sorts of clubs, who can compete for a reward. Merchants can offer prizes or double fundraising benefits to the team or group who deserves it most (i.e. who visits most frequently). This fair solution further increases ROI for the business owner, while allowing customers of all ages to reward themselves by working towards their own initiatives.

 

  1. Allow for Different Percentages at Different Times

There are three main points to be discussed here.

  1. Business owners should be able to give different percentages or amounts to different groups. For example, if there are 10 non-profits that benefit from a merchant’s loyalty program and each has different rates (Let’s say School A gets a 5% donation and Church A gets 15%) the percentages should be automatically recognized when the transaction is processed. This way, there is no need for employees to remember anything or for other groups to know who’s getting what rate.
  2. No matter what their default percentage, groups should have a way to increase their own designated percentage based on participation (visits or purchases). The business owner should have the option to change or create incentives to help organizations.

For example, a non-profit earning 5% on every transaction might see that amount doubled or tripled if they visit during slower times or purchase select products or services. This way, merchants can inspire non-profits to be much more involved and promote their business when sales, visits, and spending are needed the most

3. This method helps to open up additional marketing strategies and eliminates the need for discounting due to increased value. Rather than having to lower prices to drive visits during slow periods or on select products, the merchant can increase donations and/or rewards to protect their price point. Customers will feel good knowing that they’re helping their community or a cause close to their heart.

 

4. Integration of email, text, and communication tools

We discussed reporting and tracking briefly in the section above, but included in the loyalty suite should be an integrated email or texting solution designed to communicate with specific groups based on their participation, spending, behavior, age, birthday, or other criteria. This program allows a business owner to send a custom message to groups (Collingwood youth group, for example) offering special offers and donations that no other group will get. This way, a merchant can separate by group or by individual to see who is participating and who is not. The ability to tailor offers and donations to specific groups or members with only a few clicks of a mouse can be a great tool to trigger more engagement.

bigstock--132916166

The benefits of integration with a single sign-on program are; increased participation, spending, and frequency of visits. After all, non-profits consist of individuals within a group that are united by a shared cause or concern. Like any other customer, non-profits need reminders, incentives, and special offers to keep them interested and satisfied. Loyalty is created by allowing individuals to recognize the value in spending their money at one business rather than another.

Another important element of this communication strategy is an automated thank you email or message, reminding customers of what they spent, what rewards or donation they’ve generated, and their updated balance as a result of their purchase. Not only is this friendly customer service, it also eliminates the need for receipts, speeds the transaction, and allow for word of mouth—customers can simply forward the email or post the benefits to their favourite social media site.

These thank you messages should not be part of any email or text campaign; they should be created on behalf of the business owner for the reasons above.

 

  1. Real time transparency and accountability

This is a big one. Unfortunately, customers today are very wary about spending. They are fed up with corruption, Wall Street, CEOs, banks, politicians, and the list goes on. They believe the system is rigged against them and are fearful of trusting people with their money. And who could blame them?

It is our job to help both the customer and the non-profits feel assured that they have an accurate account of donations, to the penny. Thus, a third party verification system is necessary so that donation amounts are not only accountable but also transparent.

The way to do this is simple: implement a program that supplies every non-profit administrator with a private username and password that allows them to see customer transactions (only their members’) in real time. This record should include the amount of the transaction as well as the donation amount right on the screen of their iPad, iPhone, or computer. This allows administrators to view a real time update of donation totals as well.

Transparency and accountability appeal to programs like schools, churches, and other non-profits in ways that other methods can’t. Strategies like cereal box tops, paper flyers, plain trust donations, and bottle caps do not provide the same kind of peace of mind, the certainty that consumers know where their donation is going, that seeing a precise number on their screen can. We owe this to our customers, and plenty of research shows that transparency and accountability go a long way in restoring consumer confidence.

 

Summary of Top 10 Cause Marketing Benefits

Below are the top ten benefits of a properly designed Cause Marketing solution. Related to them are the following three emotions that connect to the consumer psychology created by this win/win strategy:

  1. Support, Value, Recognition and Reward of the Consumer
  2. Support, Value, Recognition of the Consumer’s Heartfelt Need
  3. Green Benefits

By tapping into these emotions with each transaction, business owners can make customers feel special and rewarded, and the increase in ROI can be upwards of 900%.

When this type of loyalty suite is structured properly, these are some of the benefits that business owners can expect:

  1. New Customer Acquisition

Business owners can acquire new customers without any cost to themselves until after a full price purchase is completed.

  1. Complete Paperless Database

A database of customers is created through these methods, allowing merchants to communicate with customers for years (at no cost) after their first visit. Because the database is tied directly to transactions, communication will be relevant, based on specific needs and individual concerns.

  1. No More Discounting

Cause Marketing protects profit margins and customers feel better about paying full price.

  1. Less Defection/More Loyalty

Almost 90% of customers would spend more money and make more of an effort to patronize businesses that support causes they believe in as opposed to those that do not.

  1. Better Customer Service

When customers feel that they are being served well, they bring value to businesses. Thank you notes are designed to cement consumers’ emotions of goodwill, community support and drive future visits. The equity of the business also grows, as a working database tied to transactions is valued in the neighborhood of $100 to $200 per name.

  1. Convenience & Accountability

Complete transparency with real time access to donations without paper, coupons, or flyers means that each administrator can assure donation percentages are accurate to the penny and that every visit is accounted for.

  1. Saving Money

This sort of loyalty program eliminates the free handing out of money and the pressure to write checks to every non-profit with their hand out. Many business owners are frustrated by numerous requests for money without any commitment by the recipient to patronize their business. Cause Marketing puts an end to this dilemma and creates an incentive to visit for ongoing support.

  1. Cross Promotion

Cause Marketing enables business synergy, in which non-competing businesses can work together and drive customers back and forth. This allows business owners to get paid in advance by sponsors or surrounding business owners, while attracting new visits to their location.

  1. Value with Each Purchase

By combining support and customer appreciation (through cash back rewards and donations), two of the most important emotions related to retail are satisfied simultaneously. This makes customers associate the place of business with a good feeling.

  1. Goodwill

While lowering costs, increasing profits, raising ticket averages, eliminating discounting, and raising frequency of visits, business owners can also feel that they’re doing good for their community. Cause Marketing is one of the few, if not the only, solutions that guarantee success—as there is no expense to the merchant until a full price purchase has been made.

 

If you are thinking about including a cause marketing strategy in your business or would like to have your business reviewed to see if and how this would best be executed please feel free to drop me an email or give me a call. My email is chaun@loyalpatron.com and you can reach me on my direct toll free number at 1-888-724-8319 or locately at 519-860-9201.

 

  • Pin It

Leave a Reply

Your email address will not be published. Required fields are marked *

TOP
Bitnami