Retailers Join Nonprofits in Cause-Related Marketing

Retailers are increasing their involvement with nonprofits in cause-related marketing ventures, but only some are finding direct mail the best way to promote the efforts, a recent study says.

Seventy-four percent of retailers surveyed said they had increased their participation in cause-related marketing, according to a study commissioned by the marketing firm Cone Inc. and released last month.

Twenty-eight percent of those polled found that direct mail was an effective way of communicating the cause-related marketing message, while 36 percent found the Internet effective, the study found.

In cause-related marketing, “a company partners with one or more nonprofits dealing with a social issue to impact that issue and also the company bottom line — increase sales, enhance employee loyalty and enhance the company's reputation,” said Ann Chan, an account executive in Cone's cause-branding outreach division. An example is a discount card bought from a charity that gives shoppers a price break at a participating store.

The study, which was conducted from October 1999 to March 2000, asked 211 marketing, foundation and corporate giving directors in retailing, manufacturing and financial services to specify their business objectives. The top three goals were enhancing corporate or brand image, listed by 59 percent; gaining community support, 58 percent; and enhancing employee loyalty, 49 percent.

Only 18 percent of manufacturers said direct mail was an effective means of communicating their message, while 39 percent of financial services executives said it was. However, there seemed to be more general agreement on the effectiveness of the Internet. Forty-seven percent of manufacturers said it was an effective way to communicate their message, as did 39 percent of financial services executives.

“Overall, retail and financial services are more successful at meeting business objectives with direct mail marketing,” Chan said.

With the economy slowing down, cause-related marketing may be a way for retailers to increase sales and for fundraisers to increase donations, Chan said.

“The No. 1 benefit of cause-related marketing for both charities and retailers is increasing public awareness. For people who know the charity and its work, they'll be introduced to the retailer through the association. If they already have trust in the charity, that trust will extend to the retailer. Cause-related marketing may introduce consumers to a charity they didn't know about before. And they may continue the relationship with the nonprofit even after the campaign ends.”

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