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Hooking up with a charity or nonprofit organization is a great way to help the community, as well as promote (and sell) your products.
BY BILL KELLEY, SENIOR EDITOR
Warner Canto of American Express Travel Related Services has some advice for marketers who really want to do some good: Don't try cause-related marketing. "If your primary goal is to make money for a worthy cause, stay away from it," says the senior vice president at American Express in New York City. "It's not meant to be philanthropy. Its objective is to make money for your business."
A rather blunt assessment, but Canto speaks from experience: Over the past few years he and others at American Express have devised some of the best known and most successful cause-related promotions in the business, including the widely publicized 1983 Statue of Liberty restoration. Since that time, the field of cause-related marketing has grown from relative obscurity to become one of the hottest trends in business and industry.
"There are no figures on it that I know of," says Jim Andrews, editorial director of Special Events Reports, a Chicago-based newsletter. "But there's little question that it has become very popular. It seems everybody is either doing it or thinking about doing it."
RARE OR WELL DONE?
While there's no set formula, most cause-related events are set up on a contract basis, guaranteeing the charity or benefactor a fixed amount of money for use of their name during a promotion -- regardless of whatever sales may be generated.
In some cases, however, companies may donate a fee (i.e., for every coupon used) or a percentage of the sales of the product promoted. Naturally, those fees and percentages will vary, depending on the size and type of promotion involved. For example, it may be a nickel for each coupon redeemed or somewhere between 1% and 5% of product sales. In either case, there's usually a cap on the total amount.
Whichever way it's handled, it's worth noting right up front that, despite its recent popularity, cause related marketing isn't easy. And even if such a program is undertaken, say Canto and others, it's rarely done well. In fact, Canto feels many companies get involved in cause-related marketing without truly understanding the...