Cause marketing, or cause-related marketing, is a cooperative relationship between a for-profit business and a nonprofit organization that’s intended to benefit both. Simply put, a company promotes its support of a nonprofit’s cause, thereby generating a positive image for itself while helping the charity raise money and awareness.
Businesses employ cause marketing in order to increase sales and differentiate their products from competitor brands. By leveraging the goodwill associated with a nonprofit’s mission, companies hope to attract and maintain customers. The approach works: As long as price and quality are comparable, 91 percent of consumers say they’re likely to switch to brands that support good causes.
Nonprofit organizations usually benefit by raising funds for their causes. Companies can donate in various formats, from portion-of-purchase promotions (i.e., $1 donated from the purchase price of each product sold) to point-of-sale opportunities for consumers to donate directly (such as change collection canisters placed near cash registers).
But sometimes, cause marketing does not involve donations at all. Instead, businesses simply advocate on behalf of social or environmental issues. By linking their marketing with those issues, companies can win over like-minded consumers. Nonprofits still benefit from the increased public awareness companies create for their missions.
Whether yours is a for-profit or not-for-profit organization, an effective cause marketing campaign can improve your revenues and reputation.