Cause Branding and Its Impact on Corporate Reputation By Barkley Evergreen & Partners EXECUTIVE SUMMARY Cause branding

is a relatively new concept in the marketing environment. While cause continues to gain a foothold in annual marketing plans, it also endures some questioning during the journey from the marketing department to the C-suite. The intent of this White Paper is to provide a brief history of the development of cause branding, define it as a viable marketing strategy in the changing media and cultural environment, and evaluate the role and benefits of cause branding in brand building. For a brand to find success and growth in todays marketplace, it must become a relevant part of a customers life. Brands can do this by proactively responding to trends, understanding customer concerns, and joining with customers and employees to meet real societal needscause branding. INTRODUCTIONCAUSE WHAT? Companies need new marketing strategies to connect with customers like never before. Cause branding is a strategy to unite a brands core value(s) with a consumer passion and the right cause partner to raise awareness and funds to positively impact a societal need. It is a proven strategy to differentiate a brand and build relationships with core customers and target consumer segments. In the marketing communications industry, cause programs as a specialty practice continue to gain traction. The international holding companies that operate the largest advertising agencies and public relations firms are beginning to develop practices within their ranks or are buying boutique firms. Agencies, nonprofit organizations, and trade publications conduct annual surveys to gauge its impact. A professional association, the Cause Marketing Forum (www.causemarketingforum.com), has emerged to recognize brands like Target, VH1, Lee Jeans, and Whirlpool, and nonprofits such as Habitat for Humanity, the Susan G. Komen Breast Cancer Foundation, American Heart Association, and National Wildlife Federation for outstanding cause programs annually. Yet, there is still ambiguity and misconception about the role and objective of cause branding with many marketing professionals and C-suite executives in the corporate world. What is it, this cause branding? Is it a strategy or a tactic? What then is cause marketing? Do cause programs belong in the marketing budget or with corporate communications? How is it different from Corporate Social Responsibility (CSR)? Cause Branding vs. Cause Marketing vs. Corporate Social Responsibility It is generally accepted that cause marketing was added to the marketing lexicon in the early 1980s after American Express initiated a consumer-targeted program to donate a penny per transaction to the Statue of Liberty restoration project.1 This project linked a brand with a cause, enabling consumers to financially support the cause by doing business with the brand. This one-time effortcause marketingshowed that a brand (American Express) could positively impact its perception with consumers by committing to a cause (Statue of Liberty restoration). From that initial foray into the consumer marketplace, cause programs have continued to evolve. For brands in many retail and packaged goods categories cause programs have proven to be a viable marketing strategy. A few examples of successful cause branding partnerships between consumer brands and non profits include: PNC Grow Up Great

PNC Financial Services and Sesame Street Workshop, National Head Start Association and Family Communications (www.pncgrowupgreat.com)

Lee National Denim Day

Lee Jeans and the Susan G. Komen Breast Cancer Foundation (www.denimday.com)

Fasten Your Seat Belts Go Far!

Volkswagen of America and Scholastic (www.teacher.scholastic.com/lessonplans/persuasivewriting)

The proven success of these programs in establishing relationships with consumers has spurred industry heavyweights and international conglomerates into the cause arena, with the best case being GEs Ecoimagination2 as the companys fundamental marketing platform. In the cause arena there is ubiquitous use of the terms cause marketing and cause branding. Barkley Evergreen & Partners believes these are two distinct marketing initiatives.

Cause Marketing is characterized by one-time support of causes with a traffic-driving or public relations objective. In the big picture it is a step beyond the traditional check-writing associated with corporate philanthropy. In the simplest form its Toys for Tots collection bins, food drives, and infant car seat checks at retail locations. The intent is to positively influence a consumer by aligning with a cause and enabling a consumer to support the cause through a short-term marketing promotion. Cause Branding goes deeper. It is continuous, 365-day-a-year association with a cause via internal and external programs. In the purest form a brand brings its core values to life by supporting a cause or nonprofit partner that embodies those same values. It is a true branding endeavor to align a cause and a brands support of that cause in the consumers mind. It is linkage: Ben & Jerrys and the environment; the National Football League and United Way; Lee Jeans and breast cancer. In some minds the line between cause branding and Corporate Social Responsibility (CSR) may blur. Cause branding is not CSR. While cause branding might be the public face of a comprehensive CSR program, the differentiating factor is cause brandings focus. A true cause branding program is about one issue, be it health, the environment, literacy, youth education or another societal need.

CSR is broad. It encompasses sustainable development, domestic and international labor practices, community development, environmental standards and practices, and any number or other issues. While CSR can work to establish a brand as a good corporate citizen, cause branding forges a true emotional connection between a brand and its customers to support a cause that reflects the brands core values and the passions of customers and consumers. THE PROBLEMCLUTTER, DIFFERENTIATION, EXPECTATION The communications challenge facing consumer brands is amazingly clear, yet it continues to frustrate marketers as they work to find audiences for their goods and services:

Technology is making our world smaller Consumers have access to more information than ever before Consumers talk to each other more than ever before Consumers are empowered and have more choices then ever before

Yet every day it is harder and harder for brands to reach that target consumer. Media channels are so overloaded with content, but at the same time so fragmented, that a consumer who needs and most likely is looking for a specific product cant find it. In a growing marketplace that features declining rates of traditional media consumption, a brand must embrace new strategies to break through the clutter and differentiate itself in the eyes of a consumer. In addition to a changing media environment, another set of circumstances underway in our nation is opening the door for corporate America to connect emotionally with consumers and enhance corporate reputation. There is a paradigm shift underway about the role of government and corporate America as to which entity is best equipped to respond to crisis events and public need. The response of corporate America to Hurricane Katrina was not a singular event but a shining example of the growing role corporate America overtly plays in responding to local, regional and national crises.3 Today consumers expect, if not demand, that corporate America play an active role in enhancing quality of life in local communities. Why is this change occurring? In many eyes the government bureaucracy is seen as too big and slow, and not tuned in or responsive to needs of people. The seemingly never-ending stories of corruption, regardless of what party is in power have also worked to disillusion the public. It seemingly doesnt matter what party is in power, it is only a matter of time until the scandal and indictments against government officials commence. Increasingly, business is seen as the entity most able to deliver services during a crisis. This shift is occurring because business and brands are closer and more responsive to the needs of the public. Home Depot CEO Bob Nardelli refers to this shift as a conclusion that surprisingly few have grasped: Our duty as individual citizens and as corporations isnt to simply wait for government to do everything for us, but to recognize governments limitations and our own strengths, and pitch in to offer what we do best to help our fellow citizens.4 With the same retailers in strip malls on every other block in every city of every state, today brands are more local than government. In order to remain viable brands must be more attuned and responsive to the public. Stacks of research and segmentation studies allow corporate America to understand and respond to the needs of consumers more quickly and effectively than government. Additionally, from earthquakes to terrorist attacks to hurricanes, corporate America has fundamentally proven to be better at crisis planning than government. This has spurred corporate America to develop comprehensive yet fluid crisis plans to protect corporate reputation and support customers in a time of need. A corporate cause branding strategy is the next logical outgrowth of this evolving role of national brands. Aiding in this movement is business ability to embrace technology and the change and resulting efficiencies produced by innovation. Consumers turn to business for answers and assistance with new technology and it is brands that can meet those needs. A brand with a focused cause branding strategy, aligned with a specific cause that is relevant to consumers, can take the next step and stake a claim in the minds of consumers. Brand X was there for us when the storm hit. It financially supports programs to improve adult literacy. Brand X is giving back to the community and investing in our future. I will support Brand X and tell my friends and family to do the same. This is the potential impact on reputation that a focused cause branding program can have.

The 2005 PRWeek/Barkley Evergreen Cause Survey found 80 percent of corporate marketing professionals believe an enhanced relationship with consumers in target demographics is a primary benefit of cause branding programs.5 Its no coincidence the concept of word-of-mouth promotion has emerged as the Holy Grail for advertising agencies along with the maturation of cause programs. Advertising agencies position concepts like word-ofmouth and viral as revolutionary ideas, yet each is usually an outcome of a successful cause program. THE SOLUTIONCAUSE BRANDING TO ENHANCE REPUTATON As stewards of consumer brands, marketing professionals are in a tough spot. Shareholders want value and return, while consumers want you to help make the world a better place. The solution is a marketing strategy to forge an emotional connection between a brand and its customers cause branding. The objective of a successful cause branding effort is to affect real change to improve our community/society. It has three partners: 1. Brand partner 2. Nonprofit cause partner 3. Consumer partners The common thread is the cause and/or issue must be relevant to four key audiences: 1. The cause must align with a brands culture, values and/or its products and services. The program must embody a core value to be authentic and embraced by both internal and external audiences. 2. The cause partner should have a natural affiliation with the brand. 3. The cause must be relevant to a brands core customer segment. The cause commitment must resonate with core customers to build a foundation for growth and to activate those individuals who will become vocal advocates for the brand and the cause. 4. The cause must be relevant to a brands target consumers to attract new customers to the brand and drive ever-increasing participation and fundraising for the cause. For example, it would be a disconnect for a fine hardwood furniture manufacturer to support youth soccer, but its relevant for it to align with environmental issues, specifically reforestation. Similarly, it would not make sense for a womans clothing retailer to support drivers education for eighth and ninth graders, but it is relevant for that same fashion retailer to raise funds for breast cancer research. Developed correctly, a perfect cause branding program cuts across social, cultural and economic lines (breast cancer, clean water, literacy) to join and empower consumers to positively impact a societal need. Any brand can establish a cause branding program as it progresses down what Barkley Evergreen envisions as the Path of a Citizen BrandSM. A brand follows this path as it matures from local check writing and traditional philanthropy to cause marketing promotions and, ultimately, to committed, long-term support of a cause and nonprofit partner with a sustained cause branding program.

A true cause branding program is national in scope and executed across all marketing platforms possible by both the brand and nonprofit partner:

Internal employee participation and celebration External consumer promotions in-store, on location, and online Television Radio Online Apparel Ad specialties Sponsorships Local and national events

THE BENEFITSCORPORATE REPUTATION By leveraging media channels to raise awareness of a cause branding program a brand can activate the coveted word-of-mouth endorsement all brands are seeking to enhance corporate reputation. GE, Intuit, Enterprise Rent-A-Car, and Symantec are just some of the companies that have truly recognized and attempted to measure the power of word-of-mouth endorsement using a net promoter score.6 This process tracks customer satisfaction by asking only one question, Would you recommend this product to a friend? A positive response is a key characteristic of positive corporate reputation. The 2005 PRWeek/Barkley Evergreen Cause Survey of corporate marketers and nonprofit professionals identified the following cause branding benefits:

79 percentEnhanced relationship with target consumer demographics5 74 percentPositive public relations results5 61 percentIncrease in donations to the nonprofit organization5

When asked why it is important to participate in a cause branding partnership, respondents indicated:

88 percentPositive impact on corporate reputation5 77 percentPublic relations potential5 76 percentConsumers are more likely to buy products from a company that engages in cause branding programs5 73 percentA poor corporate reputation can be improved through cause branding5

CONCLUSION With a 20-year record of success, cause branding is an evolving strategy that continues to mature. As it becomes more sophisticated, it will emerge as the single most effective strategy to establish emotional relationships with target consumers. Developed and executed correctly, cause branding is a strategy to differentiate a brand from its competitors and positively impact a brands corporate reputation. Thus the objective of a cause branding program is to positively enhance corporate reputation with the intent to gain favor in the minds of consumers. The outcome of that favor is brand advocacy by consumers and its cause partner with the desired outcome being a recommendation for the purchase of a brands services or products. Cause is, therefore, a brand building-strategy designed to enhance corporate reputation. How should a cause program be measured? Corporate reputation is a subjective and fragile thing to measure. How do you measure your own reputation? In many instances it is a measure of your own friends and associates. To be accurately measured, the objective and role of a cause branding program must be clearly understood by all stakeholders: nonprofit partner(s), brand marketing team, and the C-suite. If the program is to improve, corporate reputation then consumer and employee surveying must be used to establish a baseline followed by regular surveying to track the improvement in the relationship the brand shares with consumers and employees. Measuring rates of employee turnover and quality of candidates can also be an effective way to show the internal impact of a cause branding program. Externally, program participants, ever-increasing consumer participation, brand partners, and dollars raised can be tracked and quantified versus previous years and program budget. Awareness surveying and tracking can be utilized along with tracking share of voice in the marketplacewhether that be traditional media, word-ofmouth, or onlineversus your competitors. Above all else, cause branding is a strategy to enhance corporate reputation. What is the price of a sterling brand reputation? References
1

Press Release: American Express launches national campaign to help reopen the Statue of Liberty, Nov. 25, 2003 http://home3.americanexpress.com/corp/pc/2003/statue_liberty.asp
2

Forbes: GE Turns Green, Daniel Fisher, Aug. 15, 2005 Fortune: Government Broke Down. Business Stepped Up. Oct. 2, 2005 CEO Magazine: Expanding the Meaning of Corporate Citizenship, Bob Nardelli, Dec. 2005

PRWeek: PRWeek/Barkley Evergreen Cause Survey conducted by PRWeek and research firm Millward Brown, Oct. 24, 2005
6

Business 2.0: The Only Question That Matters, Damon Darlin, Sept. 2005