What is Cause Related Marketing

The Cause Related Marketing (CRM) is a collaboration between a company and a non-profit organization, where the company supports the non-profit by allocating a portion of its proceeds to the support of a charitable cause.

Both entities can benefit from this: the non-profit will see an increase in donations to their project, while the company will see an increase in profits as more and more customers identify with the value system that the company proposes. 

The subjects operating within Cause Related Marketing are therefore three: the company, the non-profit organization, and the environment (stakeholders and consumers).

The Cause Related Marketing (CRM) is a tool for corporate social responsibility. 

Examples of Cause Related Marketing

Through Corporate Related Marketing, the company seeks to position or define its brand or a specific product positively by associating them with a specific social cause that aligns with its values.

In this way, the company aims to increase sales and differentiate the positioning of the product or brand itself; the non-profit organization will see an increase in donations to their cause.  

The first example of Corporate Related Marketing dates back to 1983 when American Express, specifically its Business Travel-Related Services, decided to participate in a restoration project for the Statue of Liberty. American Express agreed to donate one penny for each credit card transaction made, and one dollar for every new card issued.

The results were as unexpected as they were positive: American Express recorded a 28% increase in credit card usage, and the Ellis Island Foundation received 1.7 million dollars. 

In Italy, the first commercial brand to propose a Cause Related Marketing project was Dash in 1987, with the campaign “Mille lire per un mattone”: a portion of the proceeds went towards the construction of a village for children in Kenya. The project was so successful that it encouraged other Italian companies to adopt Cause Related Marketing strategies as well.

Different Definitions of Cause Related Marketing

Four types of Cause Related Marketing can be identified:

• Transaction-based CRM: the company provides financial or material resources to the non-profit organization
  based on revenue generated from the established collaboration;
• Promotion-focused CRM: the company's product becomes the focus of both the message and the supported cause; 
• Licensing CRM: the non-profit organization provides its brand for use in product promotion, in exchange for an economic return;
• CRM of joint fundraising: the company becomes an intermediary between its customers and the non-profit by granting means, tools, and resources to the non-profit organization itself. 

Benefits of Cause Related Marketing

Cause Related Marketing, so closely linked to Corporate Social Responsibility, aims to add value to its marketing strategies, not operating solely for profit but trying to provide a broader vision to the end customer, thus improving its Corporate Reputation, and sharing its principles with the market. 

In conclusion, a company's social commitment plays an important role in building value perceived by consumers. A company that is supportive is viewed more positively by the end customer, encouraging them to continue purchasing its products and thus becoming a direct testimonial of the product itself within their social circle.

The Cause Related Marketing: 

• helps to improve the corporate image;
• encourages a positive attitude of consumers towards the company; 
• adds value to what the company does for stakeholders;
• is a powerful marketing tool.