Loyalty in the time of a pandemic: Customers prefer brands with a social cause


Amidst the pandemic, a survey of urban Indians revealed an interesting twist: When the price and quality are comparable, as many as 65% are likely to switch brands to help support a cause. Now more than ever, a cause-related marketing programme must demonstrate and communicate a genuine support of the cause if a company wants to optimise the effects on customer loyalty. 

The concept of cause-related marketing was introduced in 1983 with the American Express’s programme to help restore the Statue of Liberty. During a three-month campaign, AmEx raised $1.7 million for the restoration project, generated by a combination of a percentage of AmEx card purchases, a percentage of AmEx travelers’ cheques and vacations sold, and a dollar amount for new credit card customers. The results of this programme for AmEx were impressive: AmEx card usage rose 28% and new card applications increased by 17% during that period.

Just a month ago, Mercedes Benz India advertised across media that it would donate Rs 15000 per car sold to PMCARES for the first 100 buyers of its C-Class. They probably didn’t have to do that given that the festival season normally brings upswing in sales, but perhaps some customers may have chosen Merc over its rivals for this cause. 

Today, there are countless cause-related marketing programmes around the world by all types of brands. Remember the recent Burger King ad requesting their patrons to also buy from McDonalds and others to save jobs that are affected by the lockdown? For a corporation, the benefits include building brand and customer loyalty. There have also been many cause-related marketing failures too, and the primary reason is the public’s perception that a company is not genuine in its support of a cause. McDonalds faced the ire of Black community despite their supportive ads during the #BlackLivesMatter campaign. Remember the Aircel and Save the Tiger campaign? Do you think it benefited the brand in any manner?  

Key factors that increase customer loyalty with a cause-related marketing programme include aligning the cause with the company’s social responsibility statement. Equally important is a non-profit partnership that is effectively developed and managed. Finally, a long-term partnership shows more of a commitment to a cause than a short-term promo, and can help build loyalty. 

When developing a cause-related marketing programme, a brand needs to understand the partnership’s relevance, which is communicated most easily when the company chooses a programme that aligns with its CSR plans. The CSR statement documents a company’s social values and why it supports a cause, and is often used in press releases and marketing materials. When designing a cause-related marketing programme, the CSR statement needs to be used in programme communications so that stakeholders understand its validity. Support of a specific cause needs to make sense to customers. Once a cause has been defined by a company’s social responsibility statement, executives can evaluate prospective non-profit partners against it. The following guidelines may be applied.

Start by evaluating whether the non-profit organization’s mission and values fit with the company’s social responsibility statement. Companies will generally create an employee volunteer team to review a non-profit’s financial stability, board governance, operational effectiveness, administrative capabilities and success with other partnerships. This research is critical to the success of a cause-related marketing programme. Partnering with a non-profit is different from a traditional business partnership. Non-profits are generally understaffed, but passionate about their mission. 

A successful cause-related marketing programme starts off with measurable expectations, a measurement process and defined responsibilities for both parties. A poorly managed partnership can produce dismal results. Customers are savvy and if they think a company is using a non-profit to benefit only them, customers will speak out and act against it by boycotting their products and services. Though McDonald’s supported the black lives matter campaign, customers were upset that it was not truly into it because of the poor safety protocols for black employees during the pandemic lockdown. Though too early to cateorise it as cause marketing, the recent Tanishq campaign could have been managed better.

The last important step in a cause-related marketing plan is to develop an integrated employee volunteer programme, which demonstrates genuine support of the cause. Without visible employee involvement and executive commitment, a company’s cause-related marketing programme will not produce the planned loyalty results – customers will not perceive the company as fully committed to the cause.

 

When developing such a programme the project team must include representatives from human resources department who should drive the creation, management and implementation of an employee volunteer programme. They will develop and measure specific volunteer goals during the cause-related marketing programme, such as number of employees involved in specific activities that provide visibility for the company.

Although cause-related marketing has evolved across the world, India is only waking up in recent times just as social responsibility of India Inc had to be mandated by a government CSR plan. Companies should quickly realise that no longer would lower prices or offers alone provide the loyalty results companies seek. Customers will overwhelmingly respond to cause-related marketing campaigns that have senior level management support, and that demonstrate the company’s genuine support of a cause by integrating visible employee volunteer efforts and are part of a long-term partnership.

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Disclaimer

Views expressed above are the author’s own.



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