June 25, 2021

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Cause Marketing: What It Is, How To Do It, and Why It Matters

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For a long time, retail store owners and online retailers alike had only one goal in mind: profit

But today, they’re evolving beyond that point. Companies are looking to give back, to help others, and to think beyond their bottom lines.

“It’s time to do something else with marketing. To make things better. To cause a change you’d like to see in the world.” —Seth Godin, This is Marketing

That’s where “cause marketing” comes in.

What is cause marketing?

Cause marketing is a dual-purpose concept with the potential to help brands increase profitability while bettering society. It’s a win-win model, wherein companies can reach their business goals while supporting causes that matter. 

By definition, cause marketing is a type of corporate social responsibility (CSR), where businesses and nonprofits team up for a mutual benefit.

But how does cause marketing work like in practice? Let’s look at an example.

Solstice Sunglasses is a luxury boutique that created a special kit to support the Breast Cancer Research Foundation. 

For every Solstice Cleaning Kit sold, it donated $1 to the Breast Cancer Research Foundation. At the end of the campaign, it also matched the funds raised.

This is an excellent example of how companies can thrive and give back by supporting nonprofit organizations via cause marketing.

The best part: Cause marketing can be implemented as an omnichannel approach. It’s viable for in-store and online shoppers alike. Regardless of the retail touchpoint, the end goal is the same—you empower your customers to give back and feel good about their purchases (all while helping others).

5 benefits of cause marketing

The feel-good aspect of cause marketing isn’t its only benefit.

Today, customers are looking for more than the lowest price or the best deal. The number of belief-driven customers is constantly on the rise, and cause marketing is becoming a major decision-making factor when it comes to purchasing. 

We’re now witnessing an increasing number of retail store owners incorporating cause marketing into their operations. This is no surprise, as the approach brings significant benefits. Let’s look at a few.

1. Creating authentic engagement

Cause marketing helps companies create authentic engagement with their customers. According to a recent study, almost three-quarters (72%) of US consumers believe it is “more important than ever” to buy from companies that reflect their values. 

By empowering customers to pick a charity to support, every purchase has the power to create an engaging and authentic moment. In other words: it makes it easy for customers to support a cause, while making a purchase online or in-store helps you create an emotional connection (and differentiates you from your competitors).

2. Attracting new customers

Even though each person has a unique set of needs and expectations, some behavior patterns prove that younger generations are more aware of social and environmental issues. Research shows that 90% of Gen Z believes companies must act to help social and environmental issues, and 75% will research to see if a company is being honest when it takes a stand on issues.

Aside from helping nonprofit organizations raise more money, cause marketing can also attract new customers

A survey from DoSomething Strategic reveals that 76% of young people have purchased, 53% would consider purchasing, and 23% would buy from a brand/product to show support for the charities they champion.

3. Keeping loyal customers

Customer trust is fragile. An IBM study shows that one-third of all consumers will stop buying their preferred products if they lose trust in the brand, while one-third of consumers already stopped purchasing their long-time favorite brands in 2019.

Why are loyal customers important for a company? Well, customers don’t just spend more often when they feel loyal to a brand, they also spend more. In fact, as many as 43% of customers spend more money with a brand they are loyal to.

Loyalty means having a deeper connection and common beliefs. With cause marketing, companies show they care and can gain customer loyalty, giving them an edge over the competition.

4. Increasing revenue growth

Besides the positive effect on customer loyalty and brand image, cause marketing also has a significant impact on revenue growth. According to 5WPR’s 2020 Consumer Culture Report, 71% of millennials said they would pay more for a product if they knew some of its proceeds went to charity. 

The rise of belief-driven buying has transformed cause marketing into a competitive advantage. Companies that adopt this concept are witnessing two-fold results: increased revenue growth and brand awareness.

5. Making an impact 

The ultimate goal of cause marketing is making an impact in the world. Contributing to something beyond your brand will empower your team and future-proof your retail operation. Kantar’s Purpose 2020 study shows that brands consumers see as having a positive impact grow at 2x the rate of other brands. 

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Source: Kantar

If you’re looking for a way to make a difference in the world while reaching your business goals, consider leveraging cause marketing.

What are the compliance requirements for cause marketing as a retailer?

One of the biggest concerns retailers have about cause marketing and donation-making are related to compliance issues. 

There are four main requirements you should keep in mind to protect consumers and ensure you run a transparent and responsible campaign when donating to nonprofits. 

1. Register and file the required agreements

If you’re planning a campaign around purchasing goods, using services, or other transactions of value that will benefit a charitable organization, you’ll have to think about the legal framework. Many US states require signing a commercial co-venture agreement with the charitable beneficiary. 

In some states, there is even a requirement to register your company as a commercial co-venture before your campaign goes live. Make sure to look into this up front so you avoid dealing with fines and penalties down the road.

2. Be transparent about the donated amount

Transparency is crucial when it comes to donations. Whether you’re collecting donations online or in-store (or both), being honest and transparent about the specific percentage of a purchase price being donated can boost trust and encourage giving during donation drives. 

Instead of vague information such as “We will donate x% of profits” or “x% of net proceeds,” show customers the exact dollar amount from their purchase that will be donated before they complete the checkout process. 

3. Ask for permission to use trademarks

One of the elements that often gets overlooked when it comes to cause marketing relates to trademarks. Just like companies, nonprofit organizations invest time and money to build their brand and reputation. 

If you want to use the name and logo of a nonprofit organization, be sure to get permission before including them in your marketing materials. 

4. Keep detailed records

An integral part of each cause marketing campaign is maintaining detailed records for your analysis and tax deductions, and in case of future audits. 

Some of the records you should keep include sales journals that specify amounts donated on a per unit basis, adjustments to sales (refunds or returns) resulting in donation adjustments, donation receipts from payouts to nonprofits, commercial co-venture contracts, and campaign results. All these records should be maintained for a minimum of seven years in case you’re required to undergo a financial audit.

This might sound a bit daunting, but the good news is there are tools and platforms that make taking care of these items easy and stress-free. We’ll get to that in a bit, but first, let’s look at a few contextual examples of cause marketing in action.

Examples of cause marketing in action

Ready to see some examples of retailers using cause marketing? Here are four examples to provide some context on how cause marketing looks in action.

White + Warren created a cause-centric campaign for AHA with its capsule collection

Women’s clothing brand White + Warren created a capsule collection of cashmere styles its customers love, with special touches like embroidery. To support the American Heart Association, it donated 20% of net proceeds to Go Red For Women, the AHA’s signature women’s initiative. 

Kobelli participated in a flash giving event 

Kobelli, the Californian creator of fine jewelry, increased its donations 2x across the board. How? It featured four breast cancer charities to raise awareness and support the annual international health campaign around this cause that happens every October.

The Highline Wellness team uses social media to spread the message 

CBD product company Highline Wellness celebrated its first birthday with a 20% off sitewide sale—and in support of the Australian wildfires, it donated 5% of all sales made to Bush Heritage Australia.

The Highline Wellness team even tested impact messaging against product-focused messaging in their Facebook ads. The result: messaging around impact has consistently performed better.

The campaign they ran for animals affected by the Australian bush fires saw the highest impressions and engagements for any ad they had ever tested. 

Everyday California supports causes that reflect its brand values

Everyday California is an ocean adventure and lifestyle brand specializing in kayaking, paddleboarding, surfing, and snorkeling. After opening its first shop, it expanded its brand into apparel and lifestyle products. 

Through its partnerships with GreenWave and 1% for the Planet, it has committed to protecting and preserving nature by donating 1% on every single order placed online. 

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Integrating a cause marketing tool with your Shopify store

Ready to introduce your own cause marketing efforts? 

Good news: The right integration for your cause marketing efforts will handle all the reporting and donations management for you, letting you focus on your retail operation.

If you’re looking for ways to get started with cause marketing for your Shopify store, here’s a list of things you should have in mind when choosing a cause marketing integration:

Simple integration

Often, companies give up on an initiative because of the cumbersome integration with third-party apps. To make things easier for merchants, Shopify created a list with all the necessary apps to help you get started as soon as possible.

Customization

When it comes to cause marketing, different companies have different approaches. That’s why customization can help you adjust features and make the most out of your cause-related efforts. 

Look for a cause marketing platform that lets you customize donations. This means having the ability to create donations that are a percentage of purchase or a flat dollar amount per purchase, for example. The ideal solution should also let you set custom donation amounts on specific products or collections or exclude/multiply specific donations for specific causes, and it should enable whitelabeling so it blends in with your website’s overall look and feel.

End-to-end donations management

    The right donation app will do the heavy lifting, giving you a fully managed process—donations disbursement, tax receipts, and the peace of mind that you’ll never pay for donations on returned items.

    Look for a tool that takes care of the entire process of donation tracking, reconciliation, reimbursement, and tax-deductible donation receipts, giving merchants time to focus on the main business goals.

    Regulation oversight and management

    Back in the day, the number of rules and regulations around charitable giving made it almost impossible for retail store owners to embrace cause marketing. The whole process was resource-intensive, and in most cases, smaller retail store owners couldn’t manage it.

    Today, that’s not the case. Search out a cause marketing platform that lets you put shoppers in charge of where their money goes.

    Marketing integration

    To create a synergy within your tech stack, make sure to integrate your cause marketing solution with other tools you already have, including your ecommerce platform. You can even integrate it with your rewards program to increase loyalty by incentivizing your customers with reward points when they make a donation with their purchase. 

    Integrations with various tools will allow you to emphasize the importance of cause marketing throughout the buying journey.

    Data and business insights

    In today’s data-driven world, making decisions based on assumptions can affect your business. Relying on an end-to-end donations management platform lets you maximize exclusive data to better allocate budgets and segment customers based on which causes they support.

    Allowing customers to search and support their causes of choice during the customer journey (without leaving your website) unlocks invaluable data and lets you engage shoppers directly based on their cause affinities.

    Ability to measure effects on business performance

    Incorporating cause marketing into your strategy doesn’t end with donation app integration. Top-tier marketers know the only way to see the big picture and to understand the impact of cause marketing is by measuring the effect on business performance. 

    Look for a performance-based platform that lets you measure key metrics, like return on donation spend (RODS).

    If you want a cause marketing tool that ticks all these boxes, look no further than ShoppingGives. This Shopify integration empowers frictionless giving directly from your store and gives you the chance to support countless nonprofits.

    Future-proof your business with cause marketing

    Cause marketing and finding ways to give back can help future-proof your business (and it’s a good idea to implement at any time of year). By giving shoppers a way to feel good about their purchases and by showing that your retail store is about more than just making money, you and your customers create a win-win situation.

    And aside from creating authentic engagement and making an impact, donations and cause marketing can help you differentiate from your competitors’ standard holiday messaging.

    The impact cause marketing has on businesses and society is undeniable. You have the chance to increase AOV and improve the customer experience while bettering society and making a difference.

    The world is changing. Customers are more mindful of their purchases and the brands they buy from. Companies standing at a crossroads have two choices—they can go with the ostrich approach, ignoring everything around them, or embrace cause marketing and contribute to building a better world. 

    Ready to get started?

    Integrate a cause marketing platform like ShoppingGives with your Shopify store and start making an impact today.

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