Tag sponsorship

A Case for Cause Sponsorships

Cause SponsorshipCause sponsorships and cause marketing, in general, are effective ways to earn trust from consumers and increase the number of loyal customers for the brand.

According to an article in the Houston Chronicle, “Sponsorship is a form of cause marketing that involves donating to an event or organization and receiving public recognition for your contribution, linking your business name to the name of the cause.”

According to the IEG Sponsorship Report, cause sponsorship spending in North America increased to $1.99 billion in 2016, up 3.3% when compared to 2015 totals. Furthermore, they estimate that this number will increase to $2.06 billion in 2017.

While this is only a small fraction (9%) of the total sponsorship dollars spent in North America, it is still a number that should hearten the leaders of the many worthy charitable organizations out there.

Cause Sponsorships Should Remain Strong

The IEG Sponsorship Report warns that the growth in sponsorship spending, in general, could slow given several factors, including “uncertainty over global and local economic conditions in the wake of Brexit, the Trump election and other geopolitical matters, and its impact on marketing spending, including sponsorships and partnerships.”

However, I would argue that other types of sponsorship programs (e.g., sports, entertainment, festivals, fairs, and annual events, etc.) would be negatively impacted first. In fact, cause sponsorships could actually benefit by turbulent economic conditions.

The reasons that I believe this to be true are in line with a discussion of corporate social responsibility (CSR) during the Great Recession.

While cause sponsorships and CSR are not the same thing, they both attempt to improve the bottom line by understanding the bigger picture and improving the lives of their customers and the world, in general.

In an article that focuses on CSR in companies located in our neighbor to the north, the author makes the case that Canadian companies would actually be hurt by cutting funding for CSR programs during an economic downturn.

According to the article, “Heading into the recession, John Quelch, a marketing professor at Harvard Business School, wrote extensively about the risks involved with taking an axe to CSR budgets. Many consumers, he says, have come to differentiate between brands based on the social initiatives they undertake. Moreover, once companies lose their trustworthiness on social responsibility matters, it can be very hard to get it back, warns B.C.-based corporate sustainability consultant Coro Strandberg. “You’ll lose your credibility with your own employees,” she says. “They’ll perceive it as a fad and they won’t be as engaged next time around. Your suppliers won’t believe that you’re committed and neither will your customers. Once you’re in the game, you have to stay in the game.””

The article goes on to highlight that social responsibility initiatives help restore reputations of companies that are battered by tough economic conditions.

Final Thoughts

Again, CSR and cause sponsorships are not the same thing.

However, I believe the argument for CSR in tough economic times can be extended to cause sponsorships, as well.

CSR and cause sponsorships both work to improve the reputation of the brand and thus increase business by focusing on making the world that we live in a better place. (The same could be said of cause marketing in general.)

Since it is an effective business strategy in both good and bad times, I believe that cause sponsorships, cause marketing, and CSR will all continue to get funding from businesses of all sizes.

Again, this is great news for the charitable organizations. It is also great news for the businesses that sponsor the many worthy causes out there.

But, most of all, it is great news for all of us.

As I have mentioned before, good business is good for business.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

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Ask Not What Your Country Can Do for Your Brand

Photo credit: jauhari on Flickr.As reported in a cnn.com article, titled “Obama signs debt ceiling bill, ends crisis,” “President Barack Obama on Tuesday signed into law a last-minute compromise plan to raise the nation’s $14.3 trillion debt ceiling, narrowly averting what could have been an unprecedented default with calamitous economic consequences.”

What effect this crisis will have on the economy is something that economists all over the world will be watching closely in the months to come.

As President Obama said, “It’s pretty likely that the uncertainty surrounding the raising of the debt ceiling — for both businesses and consumers — has been unsettling, and just one more impediment to the full recovery that we need.”

The Challenge for Businesses

Anyone even casually following this story knows that the government’s financial problems are far from resolved.

Therefore, it’s entirely possible that consumers will decide to tighten their belts in the near future, adding even more pressure on the marketing and sales departments in businesses of all sizes.

This makes it even more important for brands to find ways to differentiate themselves from their competitors through all means possible.

A History Lesson

An latimes.com article, titled “Apple has more cash than the U.S. Treasury,” that was posted before the crisis was resolved pointed out that the U.S. Treasury’s cash balance fell to $74 billion last week. That’s less that the amount that Apple currently has in cash.

The article pointed out that although it would be unlikely for the U.S. government to ask Steve Jobs for help, if they did, it wouldn’t be the first time in history that the government was bailed out by an industry mogul.

According to the article, “In the mid-1890s, with the U.S. economy still recovering from the financial panic of 1893, the U.S. Treasury was in danger of going bankrupt as worried investors clamored to collect what they were owed from U.S. gold reserves. With few options left, President Cleveland met with New York financier J.P. Morgan, who pledged a whopping $60 million in gold. Adjusted for inflation, that would be about $1.5 billion today.”

The U.S. Treasury’s condition stabilized just days after J.P. Morgan became a cosigner on the federal debt, and within weeks, the dollar was no longer in danger.

Now, that’s a win-win-win for J.P. Morgan, the U.S. government and its citizens. The U.S. government was able to bounce back financially, the fears that the citizens of the United States had were abated and J.P. Morgan got to be the hero who saved the day.

Now Might Be a Good Time for Businesses to Invest in a Good Cause: The United States

As mentioned, the U.S. government found a way to end the debt-ceiling crisis on Tuesday. And, they did it without looking to the private sector for assistance.

That said, now might be the perfect time for brands to make investments in the United States through sponsorships, and earn the respect of consumers in the process.

As mentioned in the book “Gen Buy: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail” (affiliate link) by Kit Yarrow, Ph.D., and Jayne O’Donnell, “Cash-strapped communities are more open to sponsored assistance from brands. It’s an opportunity for marketers to get closer to consumers and break through the clutter of a crowded media marketplace. In April 2009, KFC paid for road repairs in Louisville, Kentucky, in exchange for the ability to “stamp” their repairs with a “Re-Freshed by KFC” message that’ll last until it rains. In addition to contributing to KFC’s image by showcasing the brand as imaginative and fun, KFC’s contribution and participation in the community create goodwill.”

Conclusion

With the current financial problems that the U.S. government is having, cutbacks in government spending are inevitable.

That is going to leave a lot of gaps that need to be filled somehow. And, some of the projects that will lose funding are the same ones that a brand’s customers and potential customers could benefit from the most.

Therefore, it could be in a brand’s best interest to search out these opportunities and do something similar to what KFC did.

The only downside that I can think of would be that the brand’s customers might feel that the brand is exploiting the situation for its own gain.

Therefore, it is important that the brand choose projects that fit the brand’s image. It’s also important that the brand let the community know about its efforts in an appropriate way. And, of course, there are always legal and compliance issues to consider.

These are topics that I might want to explore further in a future post.

In this post, I just wanted to remind people that there are ways for brands to help communities through sponsorship.

There are a lot of worthy causes that could use the funding.

In the future, if you see brands making investments in your community, I’d like to hear about them.

I’d also suggest that you support these brands by letting other people in your network know about their efforts via social media. And, of course, it wouldn’t hurt to show your support by buying their products and services. This might encourage other brands to follow their lead.

After all, I think it would be refreshing to hear of more instances of brands “bailing out” the United States government and its citizens, rather than the other way around.

Photo credit: jauhari on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

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