Recently in Cause Related Marketing Category

Paul Jones, who writes for the cause-related marketing blog shared some lessons he's learned from bad CRM pitches by PR agencies. One of the lessons is to make sure to "think hard about the relationship you're proposing." This made me reflect on Kiva and small businesses.

Kiva is the perfect fit for a small business cause-related marketing campaign. Kiva incorporates so many causes - poverty, human rights, sustainability - so it's sure to strike a cord with almost every passion. However, Kiva's secret sauce is that it provides a unique connection for a business person to help another business person. I don't know too many other organizations, on a CRM level, that can appeal to such a broad spectrum of small businesses.

Paul Jones, on his 'Cause-Related Marketing' Blog, answered a question "about small business and the mistakes they make when it comes to cause-related marketing, in particular developing and sustaining a relationship with a charity." He identifies four basic mistakes:

1. Picking a charity that's a poor strategic fit.
2. Not giving the CRM campaign enough support.
3. Not being in the 'right kind of business' to do a CRM campaign.
4. Picking a charity that's 'too big to be helpful.'

There are obviously important strategic decisions to be made, but I also think there's value in merely promoting the good that the business owner is already doing. Paul says, for example, "If you run a small cabinet-making operation that doesn't advertise, cause-related marketing isn't likely to help make your company more profitable." That's probably true, however, if that cabinet maker is already giving to a charity, tying it directly to his business and letting his customers know can only help create a more meaningful bond. 

OK...so, we like being held up in the same light as the famous 'PRODUCT RED' campaign which raised about $100 million for the Global Fund for Aids. Harald Eltvedt, in his blog, "Brands: you hate them...and you love them...," used RED to introduce KivaB4B as a cause marketing effort which "may be the first aimed specifically at small businesses." And boiling it down for us, he offers some tips for how small companies can benefit from cause marketing. In his words:

Don't just support your own pet cause. Make sure it is an issue your target market cares about. Cause marketing works best with young consumers and boomers.

Do it in a way that will provide real benefit to a cause (it can't be too small a percentage of profits to be meaningful, for example). Research finds that consumers believe the most important issues for companies to address are health, education, environment and economic development.

Don't think that you can charge more. Cause marketing is more about gaining a competitive advantage and building brand loyalty than it is charging a premium. Consumers won't necessarily pay more just to participate.

Start small. Try a cause marketing effort first on a local level. For example, a toy store could run a promotion where part of the sales goes to support a local school. If it works, you can build on ways to support educational efforts from there.

Not that I'm biased or anything, but using support of Kiva as a first step makes sense for so many reasons, but perhaps most importantly, it's a very easy first step.

Dennis Schall, on the Corporate Responsibility Officer Blog, posted an interesting Financial Times article about how Web 2.0 social networking tools will push Corporate Responsibility forward. "When we look at the tools Web 2.0 represents, they have the potential to be game changing for those working to advance a progressive vision of the relationship of business to society." The authors focus on things like how Web 2.0 tools make it easier for companies and their stakeholders to engage in meaningful dialogue. At the 'big picture' corporate social responsibility level, there are clearly a lot of changes happening. One thing they don't mention in the piece is how small business owners can use these social media tools to engage with customers and communities in meaningful ways. We'll be working to introduce tools and resources that can specifically help small businesses DO GOOD and PROSPER. 

Cyndia Zwahlen wrote a great piece in the LA Times today about small businesses using their charitable giving as a way to promote themselves. "More small businesses are making charitable giving part of their business strategy but not all have the know-how to do it effectively." As with any business strategy, a 'cause related marketing' program needs to be planned well. Cyndia makes some solid suggestions:

• Pick a charity or cause that is a good strategic fit.
• Don't overlook small charities.
• Do your research. "Don't assume every charity offers the same benefits to donors or is even willing to work with your small business."
• Don't expect advertising and marketing exposure from the organization you support.
• Don't treat the arrangement casually. You may need a formal written agreement with a charity if there's a public tie between you and the cause.
• Don't back off when money is tight.

I've been stumbling across small businesses that are promoting their support of Kiva. All along, we believed that KivaB4B would be an opportunity for Advanta to provide tools for small businesses to promote their support of Kiva...aka, cause related marketing is not just for the big boys.

I stumbled across a blog today that directs a portion of all of its subscription fees to Kiva loans. Declan Fallon, through his blog 'Fallond Stock Picks', has supported 55 entrepreneurs through his site.  What a great idea. Building up a loan portfolio (check it out) of that many borrowers must be incredibly satisfying for the business owner. It also gives him another reason to connect with his customers/subscribers. Go Declan! I wonder which other businesses/websites are doing something similar. I wonder who's generating the most loans through similar programs. If you know of any, let us know.

Amey Stone on 'WalletPop' has an interesting post about the Kiva card. She points out that it is unique as a cause related marketing effort specifically for small businesses. She quotes, "There is a huge opportunity here for small businesses to gain market share and take on the big boys in whatever sector they are working in through smart cause marketing efforts..." She highlights a few tips on how small companies can benefit from cause marketing:

• Don't just support your own pet cause.
• Do it in a way that will provide real benefit to a cause
• Don't think that you can charge more.
• Start small. 

Full Post Here

I was looking for some stats about how much small businesses contribute to charitable causes and I was surprised at how little information I could find...small businesses are generally not included as a category in charitable giving research. What I did find was pretty cool. 

A 2002 survey commissioned by the BBB Wise Giving Alliance revealed that more than 91 percent of small businesses in the U.S. support charitable organizations.  While 85 percent of those surveyed had donated money, small business giving is not confined to writing checks. Nearly two-thirds (63 percent) of small business owners/managers had supported charities through in-kind contributions of products or services. Additionally, eighty-five percent of the small businesses indicated that they had supported charities by participating in one or more fundraising or promotional events. Click here for the press release about the research.