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What attracts a consumer to your company? In a global study, 91% of consumers said they were likely to switch to brands that support a good cause.
The last year has seen a sharp increase in companies linking their brand with social impact, in part due to COVID-19 and consumer pressures for companies to play a role in the recovery efforts. While this new expectation for businesses to take the lead on facilitating change can feel overwhelming, it presents a massive opportunity to drive revenue and strengthen your market position.
Cause marketing, or cause-related marketing, is an increasingly popular Corporate Social Responsibility (CSR) strategy in which a company incorporates some sort of charitable element into its marketing. The mutual benefits achieved for the cause and your company can be significant — both internally and externally.
Why should demonstrating a higher purpose keep CEOs up at night? A recent study shows:
- High purpose brands double their market value over 4x faster
- High purpose brands have a 20% point advantage in annualized total shareholder returns
- High purpose brands have an Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) multiple of 4x
Social impact has the potential to be your company’s most powerful growth lever. For many brands, it's how they now define themselves, stand out from the competition, and excel in the marketplace. Let’s dig into how cause marketing has become a central marketing pillar of the most profitable companies, and how it could impact your bottom line.
Attracting & retaining talent
It’s remarkable how much top talent can boost a company’s productivity. However, top talent is hard to attract. A McKinsey study showed that 82% of Fortune 500 executives do not believe their company recruits highly talented people. These leaders aren’t being humble — most companies just aren’t good at this stuff. Furthermore, a Gallup survey showed that more than 50% of employees were “not engaged” in their work; an additional 17.2% were “actively disengaged.”
Attracting top talent means making your workplace, culture, and brand magnetic - and then delivering. This is where social impact can help. Consider this, CONE Communication research indicates that 76% of millennials consider a company’s social and environmental commitments when deciding where to work. Glassdoor reported that 73% of all adults surveyed would not apply to a company unless its values aligned with their own.
A strong social impact agenda may not only make your company distinctive, but may now be mandatory for attracting top talent. Furthermore, it may help your company save money. 75% of millennials say they would take a pay cut to work for a responsible company.
Engaging employees
Gallup reported that U.S. employees who fall into the “not engaged” and “actively disengaged” categories cost their companies $450 billion to $550 billion in lost productivity annually. These disengaged employees are a key differentiator between high- and average-performing companies.
Instantly improve productivity and your workplace culture by engaging employees in your cause marketing initiatives. After all, half of employees believe their employer should connect them with opportunities for charitable engagement, and employees who have a chance to give to charities through their workplace are happier than those who don’t.
Cause marketing offers a deeper sense of purpose and satisfaction for employees. This, in turn, can significantly lower employee turnover and even improve employee health.
Customer acquisition & loyalty
Every company strives to differentiate itself from the competition, but public perception can sometimes be more powerful than a product. Your company’s social impact, and the way you leverage that impact in your marketing, can be a commanding force in attracting and increasing market share.
Research shows that 40% of consumers seek out high-purpose brands and 55% will pay extra for their products and services. This strongly indicates that consumers want the companies they do business with to be about more than just their product or service. Cause marketing is an effective way to elevate your brand while aligning your company with the values of consumers and effectively converting them into loyal customers.
Business opportunities
There have been exponential increases in spending by corporations to make their global supply, service, and distribution chains more sustainable and equitable. To accomplish these goals, companies are partnering with a special kind of organization called a social enterprise.
Strategic partnerships with social enterprises have quickly become sought-after by many forward-thinking companies and business leaders. A partnership with the right social enterprise can help you demonstrate your values to millions of potential consumers, fundamentally changing your competitive positioning. Social enterprises are uniquely positioned to help drive that change while becoming a valuable asset for your company in the process.
Conclusion
Cause marketing has the potential to be your company’s most powerful growth lever. Businesses of every shape and size around the globe have begun adopting social impact as a critical element of their marketing strategy. Let us help your company take the first steps towards doing well by doing good.
