April 01, 2010
The Greater Good: The Unintentional (Business) Bonus from Cause Marketing
by Lauri Dodd
Direct selling companies are realizing that cause marketing can make a big difference in the bottom line.
The images, all too real for some, are seared into our minds—a tiny hand tightly gripping a donated bear at Christmas; the homeless mom tucked safely in a local shelter with her two children as the first winter chill hits; the newly jobless dad struggling to keep the lights on for his family. These are the reasons we give. These are the people who walk the thin line between have and have-not every day. The majority of us are fortunate to never be in the same position… and so we are thankful, and we give to ease the plight of others.
In fact, we are truly a charitable nation. According to Bill Clinton in Giving, “About 70 percent of American households, and increasing numbers of people around the world, give some money away every year.” As the recession and our subsequent financial woes linger on, the need to reach out to others will become even greater. Some, like Clinton, believe it is our responsibility, no matter what our circumstances, to take care of our neighbor: “We all live in an interdependent world in which our survival depends upon an understanding that our common humanity is more important than our interesting and inevitable differences, and that everyone matters.”
Experts have noted a rise in cause participation and have ventured to call it a societal trend. Everywhere you turn, companies and individuals alike are finding creative ways to do their part. It seems people yearn to have a cause that motivates them, something that helps them find a deeper spiritual connection with the world around them. It really doesn’t matter whether we give of our money, our time or both; the notion is that, in the process, we will all be better off.
‘Cause It’s Good
In the world of business, cause marketing is huge. Or it can be. The savviest among companies in corporate America often use cause marketing as leverage to widen the gap between them and their competitors. Their philanthropic ventures, in turn, become one more way for them to gain recognition and increase brand awareness in a highly competitive market.
“Passionate people gravitate to direct selling. The industry is filled with people who want to make the world a better place.”
—Kevin Guest, Chief Marketing, USANA
The concern of critics, however, is that there is an “icky-factor” to promoting (read: using) good deeds to get ahead in business. It can be considered bragging or boasting—i.e., “Buy from us. After all, look how good we are.” The underlying assumption is that the motivation to help others is not for the greater good but instead to help yourself more. And in some cases, that may be true. Then again, if people are being helped, does it really matter what prompted it?
While there may not be a consensus anytime soon, it is interesting to note that, as with just about every other aspect of business, direct sellers, of course, are not only unique in the way they go about their charitable endeavors, but also in the way they get the word out about the good works being done.
The Direct Selling Difference
At first glance, it is apparent that direct selling companies are driven by their dedication to help others. Across the board, there is an eagerness to help that permeates the entire industry. “It seems to me that passionate people gravitate to direct selling,” says Kevin Guest, Chief Marketing Officer at USANA. “The industry is filled with good, giving, caring people who want to make the world a better place.”
“Our entire business is about helping others. People become successful in this industry when they help other people reach their goals.”
In all actuality, cause participation is a perfect fit for the direct selling industry. If you think about it, charity is inherent in the business model. “Our entire business is about helping others,” Guest says. “The reason people become successful in this industry is that they help other people reach their goals. So it seems only natural to me that altruism would spill over into other aspects of their lives as well.”
Echoing those sentiments is Curt Waisath, Founder of Gold Canyon. “We have a lot of demonstrators who are passionate about helping others,” says Waisath, whose Prayer Child Foundation reaches out to families in crisis. “We are nearing $2 million in small donations to children and their families across the country since we started a decade ago.”
For their part, party plan company Celebrating Home has partnered with the Make-A-Wish Foundation, and they have earned roughly $300,000 for the organization so far, quadrupling their expectations. “Our philanthropy dovetails nicely with the industry’s mission to improve the lives of individuals and to bring families together,” says Heather Chastain, President of Celebrating Home. “A natural extension of that mission is to help those in need in our communities.”
For Vemma Founder and CEO BK Boreyko, the difference is in the approach. “The nature of network marketing lends itself to this type of involvement,” Boreyko says. “We tell stories when we introduce people to our products and our business opportunity. It’s a little tougher for corporate America to compete with that.”
Doing the Right Thing
There are many ways that companies reach out to help their fellow man. In fact, the act of making a difference can come in all shapes and sizes, depending on the individual company. Some choose to donate a portion of their products. Others contribute their money and time to a charitable cause. For still others, it’s a combination of all three. The key, for most, is to align with a charity that suits their particular culture.
“We comprise a diverse community of distributors, so for us, one cause doesn’t fit all,” says Ryan Blair, Founder and CEO of ViSalus. “Instead, we help out locally, wherever our distributors are located.” Their Body by Vi Community Challenge launched last November with a goal to purchase 100,000 meals for local food pantries and Boys & Girls Clubs, wherever their distributors see a need. “This project has exceeded my wildest dreams,” Blair says. “It aligns with the absolute core message to our field, so it is one that really resonates with them.”
“It raises the profile of our individual distributors within the community—increases their social capital.”
USANA chose to partner with the Children’s Hunger Fund, which is a perfect match to their mission. “We are ensuring that children get proper nutrition by donating our Usanimals vitamins to children in Ukraine, Romania and Mexico, among other places,” Guest says. “The program attaches our associates on an emotional level to something other than building a business. It shows a deeper value to our company.”
MonaVie has linked their charity to reinvesting in the area that has provided them with so much. “The MORE Project helps to improve the living conditions for impoverished families in Brazil,” says Julie Jenkins, Public Relations Manager at MonaVie. “We felt a great duty to give back to the country and its people who have given us the açai berry—and whose culture has so greatly influenced the making of the company. Our partnership with the MORE Project is not so much about helping our business, but about giving back. When you are blessed, you are obligated to become a blessing.”
It doesn’t seem to matter whether the charity is right next door or a world away; people are just happy to help out. “We have helped to build homes and provide education for people in the Philippines displaced by poverty and war,” says Keith Peterson, President of the Saladmaster division of Regal Ware Worldwide. “While we can’t tie a statistic to the impact on recruiting and retention, we have gotten feedback that our people are proud to belong to an organization that is dedicated to supporting this initiative. And we believe people stay in the business and feel good about introducing their friends and family to the opportunity because they are proud to be a Saladmaster representative.”
When it came time for Take Shape for Life to decide on a charity, the American Heart Association made the most sense. “We are helping people get healthy, and our affiliation with the AHA gives our people a greater sense of purpose,” says CEO Mike McDevitt. “In addition, we are helping to build awareness and participation for a cause outside of our own.”
Vemma had a unique approach in that they designed an entire product around a charitable cause. “When we first talked about the Next Helping Now Project—that we would wrap a giving program around a product for kids—where we would not make money on the product at all, the senior staff thought it was crazy, but they were behind me 100 percent,” Boreyko says. “And it has paid off in ways we never expected.”
In Vemma’s case, the charity has literally taken on a life of its own. “When we designed Next with some of the top medical minds in the country, it was primarily going to be something we could give our own kids,” Boreyko says. “At this point, the product and the charity have transformed our entire company. It’s funny; it took us five years to get to this point, but it’s now almost the whole reason we exist.”
Bottom Line Bonuses
So the multimillion-dollar question is: Does cause marketing make a difference to a company’s bottom line? Is there a direct, measurable correlation between a company’s philanthropic ventures and an increase in recruitment and retention numbers? The convoluted answer is yes, probably, but it is hard to tell for sure.
“I don’t think that our causes make a huge impact in sponsoring, but it helps,” says Gold Canyon’s Waisath. “Where I see it really makes a difference is retention. Our demonstrators really own this program. When they get involved and see how big an impact they can have on someone’s life, they want to help out again and again.”
The truth is, there really is no way to measure the benefits, because there is no proven connection between a company’s philanthropy and their recruitment and retention numbers. However, most executives will admit there is an intangible benefit, nonetheless. “From an entrepreneurial perspective, it raises the profile of our individual distributor within the community—increases their social capital—and spreads the word about ViSalus and all the good we’re doing,” Blair says.
Some companies are very careful to not let it appear they are using causes to their own advantage. “Although MonaVie believes that one can do well in business by doing good for others, we do not believe that giving programs should be used for recruiting purposes,” Jenkins says. “Our program is not a gimmick or a marketing tool. It is there to help children and those who cannot help themselves. We are proud if potential distributors or distributors are inspired to join us in giving, but we do it because it is in our hearts and a part of our mission.”
As uneasy as it may make some people, charitable involvement can be an important recruiting tool. “Although it wasn’t designed for that, it has played a role in helping us to attract more people to Vemma,” Boreyko says. “This program was designed to help kids get the nourishment they need. But a by-product has been that people want to be associated with the good things we are doing and to help do their part.” The momentum continues to build for Vemma. The Next Helping Now Project has gained the attention of some über-famous A-list celebrities, who want to get involved and help take the program to the next level.
But, regardless of the recognition his company may or may not gain, Boreyko really considers benevolent works to be his responsibility—an extension of his job as a conscientious leader. “My job as the founder of Vemma is to create an environment for people to grow,” Boreyko says. “That means I need to help them grow their business, naturally, but I also feel the responsibility to help them grow as people as well.”
“Our causes help to shape people’s ‘whys.’ ”
One of the most important assets for USANA is the value of building trust with their distributor base. “Efforts like ours with the Children’s Hunger Fund increase trust,” Guest says. “Our No. 1 objective with our philanthropy is not to recruit. We do it because it is the right thing to do. But a result seems to be that our numbers have increased.”
At Gold Canyon, as the field takes ownership of the project, it becomes a powerful thing. “The demonstrators’ involvement in this charity project ties them to our business, their own business and the outside world as well,” Waisath says. “It empowers them to help others in need. We don’t get that opportunity very often.”
While they don’t use their initiatives, per se, Chastain admits that Celebrating Home’s charitable endeavors do indeed help with both recruitment and retention. “This is a very tangible way to express your ideals and values,” Chastain says. “Why do people stay with an organization? Because it is meeting their needs. It creates another touch point with our designers that helps build our brand. It helps create a business that people want to be a part of, and basically, it’s another reason for them to say yes.”
Establishing a return on investment for these causes is not an easy thing to do. “You just never know when it may give your company the added boost it needs,” says Take Shape for Life’s McDevitt. “If a smaller company doesn’t have brand awareness, then affiliation with a particular cause may help them gain that distinction.” Boreyko has seen that same effect with Vemma—their cause marketing has played the role of brand elevator. “People are becoming fiercely loyal to our brand because of this program,” Boreyko says. “And people think differently about Vemma as a whole because of what we’re doing to help kids.”
The bottom line is that, innately, people want to belong to something bigger than themselves. “At ViSalus, we do consider it a tool of sorts,” Blair says. “Everyone’s selling something. If you stand for a cause and stand for helping someone, it helps to differentiate you from the crowd.”
Right from the start, the team of founders at ViSalus set out to create a company that was about more than just profits. The spirit of helping others is a thread that has run through the company from Day One. “Our causes help to shape people’s ‘whys,’ ” Blair says. “Above and beyond running their ViSalus business, our distributors host drives and events to help raise money to send our meal-replacement products to children. We have had overwhelming responses from people that their involvement has made a significant impact on their lives.”
Suffice it to say that many people are missing a mission behind what they do. When you include them in a mission, it becomes almost evangelistic. And you can’t put a price on that. “To be a part of an organization that has a mission you believe in has a unifying effect for the field leaders,” Boreyko says. “If someone is just joining a company for the money, then they’ll jump ship for the next opportunity that comes along that promises more money. But if they join because of the good they can accomplish, that builds loyalty, and they’ll be more likely to stay.”
Cause Marketing by the Numbers
Cone is a strategy and communications organization that for nearly 30 years has been working with the likes of Avon and the American Heart Association to help them create effective cause initiatives to increase brand awareness and loyalty. For the past 15 years, the group has been studying the trends in cause marketing and has come up with some surprising results.
Cause affiliation leads to high brand recall: When presented a list, 61 – 96 percent of participants were able to state the name of the company associated with the cause based on one in- magazine and one in-store exposure.
18- to 24-year-old millennials are more receptive to cause marketing: 51 percent have bought a cause-related product or service in the last year.
79 percent of Americans would be likely to switch from one brand to a comparable one that is associated with a good cause.
52 percent of Americans feel companies should maintain their level of financial support of social and environmental causes and nonprofit organizations.
85 percent of Americans say that they have a more positive image of a product or company when it supports a cause they care about.
According to Cone’s 2008 study, “Leadership companies today approach their support of social or environmental issues as a way to demonstrate their values and responsible practices in action. As business becomes accountable to a variety of stakeholders within a highly transparent society, aligning with a cause has become an important and visible part of a company’s corporate responsibility efforts. Increasingly, companies are integrating their cause commitments into their business operations and product development to ensure they are aligned and each is reflective of the company’s core values, mission, principles and policies.”
Source: Cone Study, 2008