Cause Marketing White Paper

  Cause Marketing White Paper

Increase Sales By Adding Passion To Your Presentation

In 1983, American Express coined the phrase Cause Marketing when it helped raise funds for a San Francisco non-profit organization. The program exceeded expectations in both card usage and money raised when more people applied for and used their cards in an attempt to raise money for an organization, they were passionate about.

“If you can tie your product or service to a cause that people are passionate about, you will be able to change their buying habits and have customers beating a path to your door.”

Since then a number of companies in many industries have successfully incorporated Cause Marketing to build their business. You can hear it all the time on radio and television. “We’ll donate to a certain charity for everyone who buys from us!” Sounds good! Buying there can support a charity. But there is a flaw in the status quo.

You may have promoted that a percent of your sales will be given to a non-profit that you care about. But what is important to you, may not be important to your customer. In other words Cause Marketing only works when the charity is popular with the buyer.

Here is why that is important. You may care about helping a local non profit, while your customer wants to help their local school. YOUR passion is of little interested to them. It’s  like the proverbial, ‘Selling ice to Eskimos,” meaning it’s hard to sell something to

someone who doesn’t need it, or doesn’t want it. In the same light, your cause may mean nothing to a customer; They are not motivated by YOUR cause. But if shopping at your store will help THEIR cause, they will be willing to change their buying habits.

The Real Cost of Advertising.

Have you ever run an ad for your company and thought, “If I just make back the cost of this ad, I’ll be happy!” I have heard many small business owners say that. In my first years of business, I’ve even said it.

But Really? Is that your bar for success?

Just think about that.

You had to pay money out of your own pocket and what you hope for is ending up paying all of what you are going to earn from the ad, for the ad. Your cost of advertising is actually 100% of your gross. You would have better odds going to Vegas with your ad budget. In reality, ad budgets run, depending on the industry, 10 to 20% of gross revenue.

There are two inherent risks with advertising:

1. Having to pay up front. It’s difficult for small companies to find the cash to pay for advertising and the accompanying uncertainty of how well it will work. I’m often approached by ad companies that insist their medium, Newspaper, TV, magazine or Radio, is the magic bullet to grow my business. They implore me to make an ad buy and I can just watch the money come in like a spectator watching the Super Bowl. They make it sound like a guarantee, until I ask them to guarantee it! The back peddling that ensues is aggressive enough to qualify for an Olympic sport. But of course there is no guarantees in business. There can’t be. Advertising revenue is the media’s product and few industries will  place their product inventory on consignment. Do you? But the point is that with most advertising, I won’t know if I’ve made a proper advertising investment until after I risk my capital.
2. Not knowing what the actual percent of your revenue it will cost. Will your add end up costing 5%, 20%, 50%, or even 100% of the revenue it brings in? What if it’s 200%. That happens when you spend, say, $500 for an ad and it only generates $250 in revenue. Forget about your additional costs of fulfillment or operation. That comes out of your own pocket! In an ideal world, we would know what response to an ad would be before we took the risk. If it’s 15% then if I want to gross $10.000, I just need to make a check out for $1,500. An even better scenario would be not having to pay the $1,500 until my ad buy works!

This White Paper is about embracing the benefits of Cause Marketing while eliminating the major risks in any business.

Anatomy Of A Good Cause Marketing Program

I just want to review what a good Cause Marketing Program should look like.

1. There is no cost to open an account.
2. There is no monthly or subscription fee.
3. You are allowed to sell either products or gift cards. This is especially important for restaurants with long menus or stores with changing inventories.
4. You should have a choice of how much you give. Some products and services have less overhead and greater margins that might allow some donations to be larger than other.
5. Your customer is allowed to select the recipient of the donation. That way, the charity is important to them.
6. You can work the program even if there is no one else in your town currently working with ShopClickGive.com
7. Customers should have the opportunity to add to the amount of the donation during checkout.
8. You don’t have to be approved for a new credit line.
9. You don’t have to switch credit card processing companies.
10. Your company, regardless of size, can participate
11. You get paid before you have to deliver any product or service.
12. Payments are made at least bi-weekly.