As a Procter & Gamble brand alumnus and 25-year marketer, I’ve seen a lot of brands – Crest, Vicks, HBC, Lotto 6/49 among them – trying to use causes and good works to build brand equity. That is fine but what they should be doing with corporate social responsibility (CSR) is driving sales at the same time. Been thinking about this for awhile and the same old approach of auctions, runs, dinners and a portion of proceeds to charity is broken.
Here’s four reasons why:
- Efficiency – The high cost of admin of traditional charity programs. Much of the proceeds of these events is absorbed by the expense of holding them including the resources to run them. It is not uncommon for this ratio to be 50 per cent or more.
- Lack of reach – Reliance on in-person donors or existing networks. These programs tend to reach the same customers and audience while doing little to acquire new customers. The dinner/auction goes out to the same old group with little growth year over year.
- Inability to measure beyond funds raised for brand cause. Ok, so you raised $500,000 for local charity. Awesome. But what did it do for your brand? You feel good but where does it hit your bottom line. Maybe you get a lift during the campaign but what’s the long tail?
- An upside down funnel – Charitable funds flow from existing sales cannibalizing profits. So brand “X” promises a portion to charity when you buy their product. That promise may attract a few new customers but mostly the achievement is validation to current customers and margin is sacrificed.
So what’s the solution?
A virtuous circle for good
What if we turn that funnel rightside up? So instead of charitable works being a percentage of existing sales, an acquisition offer was offered as a reward to existing donors to your charity or cause?
Have you heard of the concept of a virtuous circle? Dictionary.com defines it as a “Self-propagating advantageous situation in which a successful solution leads to another success which generates still more desired results or successes in a chain.” The circle grows as each campaign unfolds. More dollars for charity and more customers acquired for the brand. More customers further fuels the ability to do more CSR. Truly a virtuous circle for good.
My next post will cover more on how to tap the circle while measurably increasing reach and efficiency. Thanks for reading and please post a comment with your thoughts.