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Will Cause Marketing spark a new wave of Customer Loyalty?

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Will Cause Marketing spark a new wave of Customer Loyalty?
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Editor’s Note:

Loyalty is turning green in many ways. Brands realize the importance of not just earning customer loyalty, but demonstrating their own loyalty to the customer. This proactive approach to creating customer loyalty is essential to building trust, the cornerstone of any long term relationship. Tapping in to the causes that matter most to customers is one pathway to building trust and creating strong relationships.

The following article is written by Alan Goldstein, CEO KULA. In the article, he outlines his case for why cause marketing might be the new trigger to create long term customer loyalty. Let us know what you think.

Is Cause Marketing the New Loyalty?

Though communication channels are growing, connecting with today’s consumers in a way that promotes brand engagement is increasingly difficult. It is well known that consumers crave brand authenticity and want to do business with companies that are honest, transparent, and socially responsible. But what is now more apparent is that consumers also want brands to support the causes that are important to them, especially if they have a personal connection to that cause.

This growing trend is larger than many companies initially realized, and can have a very real and major impact on brand loyalty.

  • 94% of consumers say they would switch brands in order to support a cause. (Huffington Post)
  • Roughly 9 out of 10 consumers are willing to reward brands for authenticity. This includes recommending the brand (52%), being loyal to the brand (49%), and investing in the brand (20%). (PR Newswire)
  • 75% of millennial consumers said that a brand giving back to society is either fairly or very important to them. (Digiday)
  • 53% of people consider “social purpose” a leading purchasing decision driver when quality and price are equal. (Kissmetrics)
  • More than 50% of millennials (who now make up about 25% of the U.S. population) favor companies that support causes they care about. (Forbes)

Cause Marketing

While cause marketing isn’t a new concept, its gained importance in recent years as brands try to find ways to connect with the increasingly demanding and skeptical public. Since consumers “vote with their dollars,” brands need to be more strategic about cause marketing. It’s not just about “checking the box” via a brand’s CSR (Corporate Social Responsibly department), cause marketing has to be considered an integral part of the brand’s overall marketing plan.

This concept supports one of the projected marketing trends of 2016 – the rise of relationship marketing. According to HubSpot, “the goal of relationship marketing is to focus on building stronger loyalty and long-term customer engagement rather than on quick, short-term customer acquisition and individual sales. This helps companies develop strong, emotional customer connections to their brands that drive word-of-mouth promotions and lead generation.” What is stronger than a brand and a consumer coming together to support a cause?

Unfortunately, when not done correctly or carefully, cause marketing can backfire.

Cause Marketing Fatigue

The problem whenever companies and marketers catch onto and push a trend is that it can come across as disingenuous ­– the exact opposite of the intended effect of cause marketing.

Campaigns that don’t align with the brand or seem to be piggybacking on a current hot topic social issue leave consumers confused, feeling like the sentiment behind the campaign isn’t genuine, and suspicious that the brand isn’t supporting the cause for altruistic reasons. When improperly planned and applied, cause marketing efforts may actually hurt the brand’s authenticity. This is particularly true if the cause marketing efforts are tied to a particular product or service. A recent study found that “consumers are increasingly skeptical of companies using cause marketing to push products. Companies may get some initial PR buzz but won’t carve a permanent space in people’s hearts and minds.”

Cause Marketing is the New “Loyalty”

While being socially and environmentally responsible is top of mind, and will continue to remain important to consumers, cause marketing needs to take a decidedly more local and personal approach. Companies can no longer declare that they care by simply donating money to a major non-profit of their choice. With the growing distrust of big corporations and national causes, consumers no longer believe these cause marketing partnerships are authentic. Today’s consumers need to see, hear, and feel the effects of cause marketing programs locally and to the cause of THEIR choice.

Programs like KULA’s cause marketing platform let your customers decide where a brand’s cause marketing dollars go. You’re not forcing any one cause or campaign; instead, you’re supporting the causes (big and small) that truly matter to the consumer. As chief marketing officers continue to embrace the concept of personalization and consumer preference it only makes sense that cause marketing would follow suit.

The fundamental fact that consumers prefer to do business with companies that give back doesn’t change because brands are less focused on a few select causes. Create a partnership with your consumers and let them decide what’s most important to them and where their “earned” donations go. This partnership will create brand advocates that will spread the word of your truly authentic approach to doing business and giving back to their community.

Photo Credit: Kula

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