Cause-Related Marketing: Mutual attractions - Tie-ins between companies and charities can be very beneficial to both - if the fit and the mechanics are right. David Murphy reports

In the caring, sharing 90s cause-related marketing, where a brand

and most typically a charity form an alliance, has been forcing its way

into marketers’ consciences and budget plans.

This type of alliance is mutually beneficial, but in the early days it

was typically the charities that had to do all the hunting for brand

partners.

However, this is changing, according to specialists working in the

field, with the brand owners just as keen to find partners.

Companies’ motives are far from altruistic, if the findings of research

carried out last year among 1053 consumers by Research International are

to be believed. The ’Winning Game’ research was commissioned by Business

In The Community, the charity charged with supporting the economic and

social integration of communities by raising the quality and extent of

business involvement.

Business In The Community has 400 member companies, 75 of which are in

the FTSE 100 index. In 1995, it established an initiative, led by Sir

Dominic Cadbury, to promote cause-related marketing and act as a

facilitator in encouraging partnerships.

According to its research, 61% of consumers would switch from one retail

outlet to another if it was associated with a ’cause’, while 86% have a

more positive image of a company if they see that it is doing something

to make the world a better place, regardless of the cause or issue

concerned.

Small wonder, then, that marketing directors are making a beeline for

the charities section of the Yellow Pages.

But for a brand or a charity, simply forming an alliance is no guarantee

of success. So, how does a brand or a charity looking for a partner make

the right choice?

According to Bob Hand, managing director of Affinity Solutions, an

agency which specialises in establishing ’mutually beneficial marketing

partnerships’, there are some clear guidelines to follow.

’If you look at most successful third-party relationships,’ says Hand,

’it’s where there’s a natural link between the two organisations. This

is why you see supermarkets, which target families with young children,

linking up with children’s charities and running projects like Tesco’s

Computers For Schools campaign.’

Hand believes that where problems arise, it is usually because charities

and brands come together without either side giving the matter a great

deal of thought.

’If an airline banned smoking on all its flights and supported a cancer

charity,’ he says, ’that would be good cause-related marketing, but I

think there are lots of examples of charities going around and saying

’let’s just grab any commercial organisation that moves’.

’And from the brand side, you often hear people saying, ’We need a

charity’, when what they ought to have is a charity which suits their

company. I think a lot of people say that they must have a charity to

make the organisation look good, without really understanding the

issues.’

Marrying kinds

One company attempting to solve cause-related marketing’s Blind Date

dilemma and help create alliances between charities and brands is

database organisation NDL. It offers a profile matching service marrying

brands to partners.

NDL’s business development manager, Matthew Kelleher, says the service

can operate by looking for a profile match between a charity’s donor

database and specified brands, or between the donor database and

industry sectors suggested by NDL, (eg PEP providers), where the charity

doesn’t have specific brands in mind.

Kelleher admits the service is in its infancy, but believes it has the

potential to develop. ’It all depends how much people want to know which

third-party company is best for them to work with, or how much they are

prepared to go out on a limb. It all comes down to targeting,’ he

says.

Some companies find their partners themselves. Cadbury invited five

charities to pitch for the right to be associated with the company. Save

The Children convinced Cadbury that it had the best credentials to

develop an active partnership. One of the results was Cadbury’s

’Strollathon’ ten-mile sponsored walk, which raises pounds 400,000

annually.

But finding a partner is only half the battle. Once a relationship has

been established, it has to be managed. Affinity Solutions’ Bob Hand

believes there are key questions to be considered at the outset.

’You have to decide whether you’re going to run things with existing

staff or recruit dedicated personnel with specialist knowledge,’ says

Hand. ’You also need to agree on the contractual terms. If customers are

recruited, who owns them? What happens if and when the agreement is

terminated?

Are you looking for money upfront, or regular, long-term income? How

much do you embrace their brand?’

In Hand’s experience, time spent evaluating these issues before entering

into an agreement can prevent problems further down the line.

One of the biggest growth areas within cause-related marketing is

affinity cards. The first one supporting a charity was launched in

October 1987 by the Bank of Scotland with the National Society for

Prevention of Cruelty to Children (NSPCC).

Unmined potential

According to research conducted by Abram Hawkes in January, there are

now around 750 UK organisations with an established affinity or

co-branded credit cards. Despite this, there is still a huge untapped

potential market out there.

Research by Datamonitor shows UK spending accounted for by co-branded

and affinity credit cards in 1995 was pounds 1.96bn, just 4.5% of total

UK credit card spending.

Who gets what out of an affinity card can vary. According to the Abram

Hawkes research, the partner organisation typically receives a one-off

payment for each card taken up by its members. This can vary between 65p

per card to as much as pounds 30 per card, depending on which

organisation markets the card.

Thereafter, the partner organisation will typically receive between 0.2%

to 0.25% of the amount spent on the card. The average amount earned by

the partner organisations was around pounds 73,000, though several

organisations had earned less than pounds 1000 ,and others more than

pounds 500,000.

David Williams-Jones, divisional general manager of Transnational, which

acts as a ’marriage broker’ between issuing banks and benefiting

charities, believes the appeal of affinity cards lies not just in their

ability to generate funds, but in the certainty that the funds will be

forthcoming.

’For a group such as Action Aid, which to date has raised around pounds

400,000 through its affinity card, it’s not only the fact that it gets a

payment every year, it’s the fact that it has a pretty good idea what

that payment will be at the beginning of the year. Having money is one

thing, but to know they are going to have it and plan how it’s going to

be spent before they get it is equally important,’ says

Williams-Jones.

He believes the affinity card has a long way to go in the UK, pointing

to the fact that while one in 20 UK credit cards are affinity or

co-branded cards, the ratio in the US is one in five. As more brands,

and charities, recognise the benefits of affinity cards and other

cause-related marketing activities, it may not be too long before the

balance is redressed.

On November 17, Business In The Community is holding a one-day

conference on cause-related marketing, supported by Cadbury, BT, Lever

Brothers, Guinness, Tesco and others. Details from Sue Adkins on

0171-224 1600

TRUMP CARD

The Royal Society for the Prevention of Cruelty to Animals (RSPCA) has

300 uniformed inspectors operating in England and Wales and runs a

number of animal hospitals, clinics and homes.

Keeping the Society afloat is an expensive exercise. It costs pounds

11,000 to buy a new inspector’s van and a further pounds 1000 to kit it

out with the necessary equipment. It costs pounds 10,100 to train each

inspector.

To help meet its funding needs, the Society launched an affinity card in

conjunction with the Bank of Scotland in August 1993. To date, the

Society has received pounds 771,696 in royalty payments. The figure is

expected to top pounds 1m in 1998. There are currently 80,000 RSPCA

affinity cardholders.

The card is marketed by Transnational, which has used innovative methods

of recruitment such as direct response TV advertising campaigns,

alongside more traditional activities such as warm mailings to existing

RSPCA donors and face-to-face selling at exhibitions and agricultural

shows.

Alyson Pearce, corporate relations manager for the RSPCA, says the

Society is delighted by the success of the card. ’If you continually ask

for money, donor fatigue can set in,’ she says.

AN ETHICAL PACKAGE

Not every cause-related marketing campaign has a financial imperative.

In the case of frozen food retailer, Iceland, an alliance with the

Missing Person’s Helpline is all about tracing missing people.

The charity made an initial approach to Iceland earlier this year to see

if there was any way the retailer could help give the charity

much-needed publicity.

The result was a campaign, launched in April, which features a

photograph and brief personal details of a missing person on four-litre

cartons of Iceland own-brand milk. The person featured changes every

three weeks. The additional costs generated by the regular packaging

changes are met by Iceland and its suppliers.

Barbara Crampton, public relations manager at Iceland, explains the

logic behind the campaign. ’For the Missing Person’s Helpline, we

offered nationwide distribution, with 770 stores in every part of the

UK. That was vital when you consider that the people in question could

be a long way from home. From our point of view, it’s an ideal

opportunity to show Iceland caring for the local communities.’ The

four-litre milk cartons were chosen for several reasons. First, they are

the right size to accommodate the amount of information needed.

Second, they are one of Iceland’s biggest-selling lines, with around

75,000 units sold each day. Third, they are of a size which is unlikely

to be handled by small children who might be disturbed by the

’advertisement’.

The campaign recently enjoyed its first taste of success when a 15-year

old girl from Torquay, Kirsty McFadden, was found in Bristol as a result

of her photograph being recognised from the carton. Kirsty was reunited

with her family exactly one year after she went missing.

This article was first published on Marketing