ANALYSIS: CORPORATE REPUTATION; Building an image of community concern

Cause related marketing has developed as consumers are buying with a

conscience and prefer companies that show their support for charity or

community projects

Thirteen years ago American Express was asked to be a corporate sponsor

for the restoration of the Statue of Liberty.

The company declined the offer, instead deciding to donate one dollar to

the nation’s icon every time the card was used. Card usage shot up 17

per cent and the term ‘cause related marketing’ was born.

Today a sizeable 64 per cent of US citizens are likely to switch brands

to one linked with a cause when price and quality are equal, according

to a survey by the consultancies Cone/Roper.

One in five bought a product purely on its association with a good cause

and 84 per cent said it gave them a more positive image of the company.

Yet despite talk in the UK of corporate responsibility and openness

marketing directors devoted on average just one per cent of their budget

to CRM last year. Three quarters of PLCs have no company policy at all

relating to CRM.

A new survey on CRM by the charity Business in the Community - which

encourages corporate community involvement - indicates this may change.

According to this survey of 66 marketing directors, 70 per cent believe

CRM, otherwise known as strategic philanthropy or socially responsible

marketing, will increase in importance over the next two to three years.

One company which is already convinced of the value of CRM is Tesco.

Five years ago it launched a voucher promotion to help schools obtain

free computer equipment was initially greeted with internal scepticism

says Tesco’s national marketing controller Jenny Gilmore.

Far from trying to deceive marketing-literate consumers that its scheme

was a one-way philanthropic gesture Tesco has been open about its desire

to increase sales and loyalty and it has paid off. Between 1992 and 1995

Tesco supplied pounds 22.4 million worth of equipment and takes 12,000

orders from schools each year.

In turn, sales visibly increase when Tesco runs the promotion and

Gilmore says the initiative has achieved a huge amount of national and

most importantly, local PR, which she says illustrates ‘the real

evidence of the scheme’. The initiative has also spawned similar

programmes from Sainsbury’s and Asda, keen to grab some corporate

brownie points.

Another example is Cadbury’s Strollerthon. The sponsored walk for

charity, designed to enhance Cadbury’s image as a ‘fun, contemporary and

caring’ company, has raised over pounds 400,000 for Save The Children.

Dominic Cadbury, chairman of the Business in the Community CRM steering

committee, says: ‘TV advertising costs are escalating. It’s becoming

more difficult to justify individual TV brand advertising.

‘CRM is one way of getting to large audiences in a manner which

consumers see as benefiting the community. There is clear evidence that

customers do care and this is likely to grow,’ he adds.

CRM, says Cadbury, can also be a ‘positive motivator’ to employees ‘who

want to think the company stands for a bit more than how many Schweppes

tonics we can sell.’

But are UK consumers really bothered? Business in the Community admits

research into the influence of CRM on consumers is ‘patchy’ but is

launching a survey of 1,000 people which will be released in November.

However, a report compiled by the charity NCH: Action for Children

earlier this year, on the buying habits of families, showed consumers,

especially children, are acutely aware of a company’s philanthropic

tendencies.

Sixty per cent of parents and 67 per cent of children are more likely to

buy a product if it is associated with a charity.

The survey also found that a surprising 78 per cent of shareholders

would prefer to buy shares in a company which has links with causes -

both findings help to explain the success of The Body Shop.

For the charity CRM means swapping the collection tin for a hard

commercial proposition, although as Jacquie Verbeek of the WWF points

out, this is something that charities have been doing for years.

‘CRM is just the ‘in’ jargon for licensing in the charity sector,’ says

Verbeek.

WWF alone has sixteen ‘contracted clients’ which range from taking a

share of the price of a children’s meal at Harvester restaurants to

producing wildlife videos with the Readers Digest Association.

But CRM partnerships have to be well executed warns Business in the

Community CRM manager Sue Adkins, who was recruited to promote the

concept of CRM.

‘It’s not a ‘figleaf’ for companies to hide behind,’ says Adkins. ‘It’s

a long-term commitment not an in and out tactical move.’

And if the programme is not sincere customers will see through it, doing

their reputation more harm than good. Countrywide chairman Peter Hehir,

a member of the committee, agrees.

‘Putting a gloss on things is highly dangerous. Companies can’t afford

to behave badly as they will be found out,’ he says.

‘The potential for CRM to grow is enormous. It could become a major part

of the marketing budget,’ adds Hehir, who describes the average pounds

250,000 required to run a campaign as ‘petty cash’ to marketing

directors.

With CRM now making up ten per cent of US sponsorship spends, causes

appear to be the next marketing trend which is good news for PR

practitioners who are often the executors of CRM campaigns.

Let’s hope, however, an influx of caring messages does not lead to

another entry in the marketing dictionary: the ‘cause-weary consumer’.