Doing Good Is Good For Business: The Win-Win of Cause Marketing

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We lace up our sneakers walking miles for cancer research and apply new shades of lipstick to stop domestic violence. Hungry kids half a world away grow strong, thanks to our nutritious gifts. Trees root in once clear-cut soils, children laugh and learn through books and instruction offered freely, and farmers in far off lands now sustain their families and villages with bountiful harvests. “We” are citizen consumers, who base more and more purchasing decisions on a company or brand’s willingness to make the world a better place.

So how then do companies embrace the ideals of the citizen consumer? Call it cause marketing, corporate social responsibility, or even to some degree, social entrepreneurship. These mutually beneficial, strategic alignments between companies or brands and charitable endeavors are causing a paradigm shift in both consumer expectation and the way companies act on behalf of charitable causes.

Today, doing good is good for business. “A well conceived, well implemented cause marketing campaign that is authentic, transparent and integrated with other company initiatives can have a significant impact on perceptions of a company and its appeal to consumers,” says David Hessekiel, President of Cause Marketing Forum, the world’s leading resource on building mutually beneficial business and nonprofit alliances.

Two decades ago, profit-seeking businesses rarely collaborated on a large scale with nonprofit organizations. Cause marketing, in practice, didn’t really exist and there was little talk of corporate responsibility to help heal the world’s social ills. Checkbook philanthropy was really the only game in town.

Where once an abysmal $120 million was spent on corporate cause sponsorship in 1990, a predicted $1.73 billion will be spent in 2012. That’s up 3.7 percent from 2011, and the consumer appetite for causes and their related marketing efforts is growing.

What changed? Everything.

Times change, consumer attitudes change, everything changes. Perhaps exposed vulnerabilities in a post-9/11 world refreshed our need to be our brother’s keeper. Maybe consumers unwittingly harnessed the energy from a collective existential crisis, giving rise to the current era of the citizen consumer. Whatever the case, ethically minded citizen consumers are drafting a new social contract with business that reads, “Doing good matters! Sign here.”

Ethically minded citizen consumers are drafting a new social contract with business that reads, “Doing good matters! Sign here.”

Of the 2,733 corporate foundations awarding grants in 2009, nearly one-third were established after the year 2000. Nearly 19 percent of those foundations awarded more than $1 million in grants in 2009. The Foundation Center, a leading source for information about philanthropy worldwide since 1956, estimates total corporate giving for 2010 at $4.7 billion.

“People ask more and more of the companies they do business with,” says Dave Wentz, CEO of USANA. “Every legacy company that wants to stand the test of time needs to be giving back or they will be replaced by a competitor who thinks about more than just profits. The direct selling industry understood this very early on and we are way ahead of the game, which is why we will grow faster and continue to take market share from other industries.”

“Every legacy company that wants to stand the test of time needs to be giving back or they will be replaced by a competitor who thinks about more than just profits.”
—Dave Wentz, CEO, USANA

Like so many companies in the industry, Todd Goergen, Chairman of the Board at ViSalus, says, “Giving back to the community, volunteering and contributing to nonprofits is part of the DNA of our company. We are in business to be successful and create a company that makes people money, but not to sacrifice values to get there.”

The 2010 Edelman goodpurpose™ study, a global consumer study that explores consumer attitudes around social purpose, found 80 percent of Americans believe corporations hold a unique and powerful position to make a positive impact on good causes, and 87 percent of Americans believe businesses need to place at least equal weight on society’s interests as they do on their own.

Reeling from the Haitian earthquake, lengthy Gulf of Mexico oil disaster, and Japan’s devastating earthquake/tsunami/nuclear catastrophe and coping with a worldwide economic recession, it is little wonder the 2010 Edelman survey depicts consumers expecting more from business. “These events have created a tremendous outcry from consumers that companies not only need to act as responsible citizens, but they also need to lead innovative solutions in a way that only business can,” says Mitch Markson, Chief Creative Officer at Edelman and Founder of Edelman goodpurpose™.

Crayton Webb, Director of Corporate Social Responsibility and Corporate Communications at Mary Kay Inc., says, “Corporate social responsibility has been a way of life in a number of direct selling companies long before anyone talked about cause-related marketing. In a way, our industry has set the bar and set the trend.” The Mary Kay Foundation is a philanthropic leader in the industry, raising $4.7 million in 2011 with a 16-year cumulative total of $28 million for good works in domestic violence shelters and women’s cancer research.

Engaging an Industry

Direct selling—spanning 100 countries, six continents and 66 million independent business owners—pumped more than $132 billion into the world economy in 2010, and 72 percent of companies in this industry engaged in philanthropic activities, according to the 2009 Direct Selling Worldwide Corporate Philanthropy Report issued by the World Federation of Direct Selling Associations.

Their generosity is as varied as the companies and the products they sell, and the dollars-and-cents impact of direct selling’s philanthropy totaled $336 million in 2009, an increase of 24 percent, reported by WFDSA.

Regardless of the giving method—one-on-one hunger relief product matches like at ViSalus, USANA’s cash donation for every ace served on the Women’s Tennis Association tour, Scentsy’s specialty charity warmer sales, or long-term social investment initiatives like Natura’s Crer para Ver sustainable education program—philanthropic success depends on consumer and salesforce engagement.

“One of the advantages the direct selling industry has is active and passionate salesforces. If they have a mechanism to do ‘good,’ they will do that,” says Kara Schneck, Senior Director of Corporate Communications at Nu Skin. “Our channel can mobilize large forces of people to do ‘good’ in the world, and we can maximize our ability to help.”

Nu Skin distributors have donated more than 250 million meals, on average 2.1 million each month, through its Nourish the Children initiative. Specially formulated nutritional powders mix well with food staples such as rice, lentils and maize, providing malnourished children a versatile porridge.

Nu Skin’s Force for Good Foundation, established in 1996, is funded in part by their Epoch line of products and an annual Force for Good Gala, which raised $700,000 in 2011. Over the years cumulative cash and in-kind donations equal $212 million to feed the hungry in Malawi, Thailand, The Philippines and South Africa; build libraries in Korea; and fund life-saving heart surgeries for 4,000 children in Southeast Asia, among other projects.

Mary Kay’s Webb says, “Give them something that they can do: crowd sourcing on Facebook or a cause-related marketing program for a product or a petition they can sign online. The key is doing something your salesforce can sink its teeth into, get involved with and be part of.”

Mary Kay’s corporate social responsibility program, Pink Changing Lives, features a lipstick/lip gloss cause marketing campaign called Beauty That Counts. Sales of these products in the United States bring domestic violence out of the shadows and give independent beauty consultants and all their customers the ability to help by purchasing lipsticks named Confidence, Compassion, Inspiring and Possibilities.

The products are sold by 2.4 million independent beauty consultants around the world in Russia, China, Mexico, Korea—35 affiliates in all—and Webb says, “All the Mary Kay markets around the world have the freedom to find the right partner for the needs of their country, particularly focusing on women and children.”

Webb says a nuance of Beauty That Counts that goes unnoticed to many outside of Mary Kay is the relationship between the campaign’s product choice and philanthropy. “In our case, we’re taking products—although specially developed for this program—that are frontline products. The company is showing its dedication to giving back with this product choice and saying, ‘It’s not just about our bottom line.’ ”

Bonding with Citizen Consumers

Greater numbers of consumers than ever before are willing to purchase, recommend or promote companies who commit to good causes. Citizen consumers are putting their money where their ideals are, and they don’t mind paying a little more for it. At the same time, business profits and philanthropy are no longer mutually exclusive, and 79 percent of Americans told Edelman as much.

They also made perfectly clear their intentions toward businesses that neglect their social responsibilities. Over one-third indicated they would “punish” such a company and nearly one-half would take their investment dollars elsewhere. Citizen consumers want businesses to invest time, energy and money in causes. They want to hear about their good works, feel a part of them, celebrate them and forge a relationship with the brands they trust most.

“The power of relationships is paramount in directs sales,” says Cause Marketing Forum’s Hessekiel. “Cause marketing gives direct sellers the opportunity to create an even deeper bond with their customers by coming together to support a good cause. Cause marketing provides direct sales companies with great platforms for enhancing the esprit de corps within their ranks.”

ViSalus’ Goergen says, “When you’re doing the right things and you’re doing them visibly, that’s a group I can respect, people I want to be in business with and work hard with. It’s going to give me more than monetary rewards. It’s going to give me fulfillment.”

Corporate social responsibility endeavors and cause marketing campaigns, such as ViSalus’ One-to-One matching donation program, shine a light on corporate purpose for everyone—consumers, employees, direct sellers and public, alike. When disaster strikes, ViSalus is there. “We’re happy that we can react very quickly with significant amounts of nutrition for people,” Goergen says. ViSalus meal donations total 1 million since November 2009.

Herbalife Family Foundation’s 73 Casa Herbalife programs not only improve nutrition of at-risk kids around the world, but also give direct sellers and employees an easy way to express their generosity. Whether it’s 20 million micronutrient sachets to feed the hungry in Ethiopia and Kenya or daily shakes served to the folks at Union Rescue Mission on L.A.’s Skid Row, Herbalife’s commitment helps build relationships with consumers, direct sellers and the public at large.

Crusading for Purpose

Nancy Glaser, Senior Vice President of Global Communications at Avon, and member of the Avon Foundation for Women board of directors, says, “We are a relationship-based company empowering women. We have a high-touch relationship with our constituency and are dedicated to supporting and nurturing them.”

Avon is one of the direct selling industry’s philanthropic heavy hitters, arguably its star player. Founded in 1955, the Avon Foundation for Women operated in low-key fashion until adopting a cause marketing approach some 20 years ago. That’s when they started nothing short of a breast cancer crusade.

Today, you’d be hard pressed to find someone who hasn’t heard of Avon’s two-day, 39-mile weekend fundraising Walk for Breast Cancer or their line of Pink Ribbon products. They’ve raised a cumulative total of $860 million in 58 countries over the course of the foundation’s history. In 2010, they gave grants totaling more than $43.6 million.

Hessekiel calls Avon a cause marketing pioneer, beginning with their breast cancer crusade and now expanding into domestic violence and reforestation. Their 2010 Hello Green Tomorrow cause marketing campaign, which paired the company with The Nature Conservancy, won a Silver Halo Award from Cause Marketing Forum. The multi-channel, worldwide promotion included a microsite, social media outreach, fundraising incentives, as well as awards. It focused on Avon’s 6.4 million-strong “force for good” to match a $1 million Avon corporate donation. In six months, the campaign raised $2.1 million to support the planting of 2 million trees and restore 5,000 acres of forest.

“There’s this intangible, emotional culture that we have. People are very loyal and a lot of that has to do with this mission-based purpose,” Glaser says.

Edelman’s Markson adds, “Purpose allows brands to have a deeper level of engagement with their consumers—and it also allows consumers to put their own mark on brand marketing by collaborating with brands to tackle important issues.”

So central is purpose to today’s marketing mix that it’s now considered the fifth “P”—alongside its cousins: product, price, place and promotion. “It is the ultimate avenue for consumer engagement and inclusion—two vital pieces of the successful marketing puzzle,” says John Quelch, senior associate dean and Lincoln Filene professor of business administration at Harvard Business School, and co-author of Greater Good: How Good Marketing Makes for Better Democracy. “Today’s ‘citizen consumer’ demands that brands supply not products, but solutions—not functions, but benefits. Purpose does just that,” Quelch says.

Engaging a Global Community

Amway China, the largest of Amway’s markets, is rallying around purpose in ways never before seen in that country. They aim to solve a growing education problem for migrant Chinese children.

Uprooted to cities by parents looking for work, or left behind in rural areas with grandparents, while parents seek jobs elsewhere, China’s migrant children often do not qualify for social services, such as education, once they move. So Amway Charity Foundation, the first-ever, nonpublic, multinational company foundation created in China, now deploys some 60,000 volunteers to teach English, health and art classes, plus provide nutritional support to these kids in need.

“This is different for China. They don’t have that culture of volunteering formally. Amway China is leading the way with those efforts,” says Debb Kalmbach, Manager of Global Corporate Citizenship at Amway. Amway U.S. operates a corporate giving program, rather than a foundation.

“As a corporation we are focused on giving to our communities. For nearly 52 years, it’s been part of who we are,” Kalmbach says. “Volunteering is a critical component. It is much more engaging when people can see the people they are helping.”

Amway’s community includes 80 countries and a diverse cross-section of corporate giving, including Amway’s One By One Campaign for Children, The NUTRILITE Little Bits childhood nutrition program, and matching corporate grants for projects like Habitat for Humanity in Guatemala, educational costs for rural Taiwanese children, and support of a power wheelchair soccer program in Atlanta. Since 2003, Amway has helped 9.5 million children with $166 million in contributions and 2.5 million volunteer hours.

One Step Beyond Cause Marketing

Mannatech says a need for consistency caused it to switch from charity model philanthropy to social entrepreneurism in 2010. “In the first 10 years, our not-for-profit, Mannarelief, relied on charity model ebb and flow of donations that never gave us consistency,” says Sam Caster, Founder of Mannatech.

“What we do goes one step beyond cause marketing because social entrepreneurism is a purposeful business venture, combining for-profit technology and cash flow with not-for-profit purpose and passion to create sustainable change of a global problem.”

Believing that global malnutrition is the single biggest problem children face today, Mannatech looked at it with new eyes.

That’s because 5 million children under the age of 5 die every year of malnutrition. And 500 million people worldwide take nutritional supplements.

Mannatech holds 60 patents around the world and manufactures whole-food alternatives to synthetic nutritional supplements. Using their food industry technology, they could cost-effectively formulate a product specifically for malnourished youngsters. Using the direct selling staple “autoship,” they could develop a one-for-one donation program and partner with international and community feeding programs for distribution to children in need.

In a well-planned burst of innovative social entrepreneurism, Mannarelief launched Give for Real in late 2011. “Our goal is to educate and inspire 1 percent (of the 500 million people taking nutritional supplements) with a real food solution and link them to the 5 million children in need,” Caster says. “By ourselves, we can create the solution for that problem!” The fledgling effort thus far meets the needs of 60,000 kids a day and aims to trigger social change.

Mary Kay’s Webb adds, “In this day and age, cause-related marketing of products or corporate social responsibility is a door opener. But for a lot of us in direct sales, it’s a door opener to a long history of giving back, and we have a great story to tell.”