*This transcript has been edited and formatted for readability.
The Importance of Cause Branding
Chris: In today's episode, we're going to talk about something that's near and dear to our hearts here at BrandExtract: cause branding. When we talk about cause branding we mean branding for good, branding that makes a social impact. So, to start off, can either of you talk about why that's important? That is, why should companies engage in cause branding?
Jonathan: The primary purpose of cause branding is the social good. If you align yourself with a social good, then you can attract people that believe in it, whatever that particular cause might be.
As corporate citizens, I think cause marketing is a responsibility to humanity for every corporation to do their part. Corporations take from society and they mass produce a product or service so, in my opinion, they should give back something. From a philosophical standpoint, that's one of the key reasons why cause marketing is so important.
Bo: What Jonathan is saying is that the community takes care of the business, the business takes care of the community. Now, it is one thing to be completely altruistic, which can end up wasting company money. It is another thing to find causes, associations or organizations that align with the type of culture that you have set up.
It's just smart decision-making – having a strategy around the things you're going to support, separating the fact that you completely believe in them and ensuring that they align with the people you hire and with the goals of the organization. This is helpful to both the organization and the cause you're supporting. On top of labor or money, you're also giving them some brand experience while putting them out in the marketplace, and vice versa.
Jonathan: Yeah, through a co-branding process, you're bringing light to the cause or institution. I completely agree with Bo’s statement. You don't do it just for a random reason. If you put a strategy behind it then you're going to see all kinds of benefits.
When to Engage in Cause Branding
Chris: So, when does it make sense for a company to engage in cause branding? Bo, you mentioned that there's got to be some sort of connection there, it needs to be somewhat authentic. Can you elaborate on this?
Bo: Yeah, I think when it makes sense is when a corporation can support it. A company of two people
Jonathan: I don't think you want to make a promise you can't fulfill, either. I’ve sat on a number of non-profit boards and been on the receiving side of either labor or goods and services or cash from donors. From experience, I can tell that the worst thing that can happen as a non-profit
Bo's absolutely right – it's got to be aligned and balanced with the capacity of your promise.
Chris: In preparation for this episode, we talked about cause marketing working better when the organization truly relates to the cause. For example, if you're a company that produces a lot of chemical waste and you show an interest in minimizing that waste or figuring out ways to help the environment, that comes off as authentic, rather than another cause that does not align with the company.
Bo: Yes, say I make cars that may harm the environment -- using oil, using gas, putting out emissions. It's not disingenuous to follow up and do something to help the environmental state, as long as you are really showing those actions. Your financials, your annual report and the statements you put out all need to align with that position. It’s not just a donation of time and money but also your actions that are backing that up.
If done properly, the business gets the benefit of showing that they're trying to make their business better. The community gets the benefit from trying to make things better for themselves and their constituents. And the people get the benefit of being able to walk away and go, “I work for a company that cares.”
Look, it's a reality that we have to drive cars and it's a reality that they impact the environment – how do we do that in the least impactful way without completely shifting what the company is?
Jonathan: You can also take it a layer deeper. Maybe your company hires lots of veterans. Your product may have nothing to do with military or the veterans, but your workforce may be a bunch of ex-military. So, you want to do something for the military – the Wounded Warrior Project, for example.
You can look at it from the product or service that the company delivers, or you can look at it from the core building blocks that drive the mechanics of the business. There are a few ways to think about this.
Internal Benefits of Cause Branding
Chris: There are obvious benefits to cleaning up the environment or minimizing the environmental impact of what you do. But what are some organizational or internal benefits you get from cause branding? Bo, you briefly mentioned that people want to be proud of where they work. That's a benefit you get. What are other benefits to cause branding?
Bo: Let's take it out of the cause branding component. I want my employees, my customers, and the market advocating for me. “Hey look, they may be our competitor but they're good guys to work with. BrandExtract does good work.” Or “Hey, I'm proud of working there because...”
In the work that we've done, when we shut down for a day every quarter to do good work, our guys have come back saying, “Man this is one of the best days I've ever had at work.”
Well, doing that purposefully on a workday – giving up productivity to go do good, it aligns with who Jonathan, our other partners and I are. And it makes sense for the team. I don't want to take away from their families, they're already taken away to work. And giving them an outlet to do something that they don't have the time to do makes them feel good about themselves.
Over the next two weeks our productivity skyrockets because people are just talking about all the funny stuff that happened, the good things that go on, etc. They feel like they've had an impact. Then we get a card from the non-profit, they send us a gift basket or they do something nice because we take thirty people into these places and we make an impact on their organization. It pays dividends over and over and over and it's not disingenuous.
And it's something that's also good when we're talking about hiring. It makes sense and we believe in it. Everybody here believes in it, so it became criteria for our core value of “Do the Right Thing.”
Jonathan: Between our creative firm and another creative firm that a candidate may be
Chris: Absolutely, I know from personal experience. It gets mentioned so often in cultural interviews. That's something that we might sometimes take for granted. I think we're aware of it, but it isn’t until somebody else comes in from the outside and says, “That's really cool!” that we actually realize it.
Jonathan: Even when we notify clients we're going to be closed on a Friday to go plant trees or make sandwiches, half the time I'll get an email back from the client saying, “That's amazing, I wish I could come too!”
That's one of the benefits of the process. Others include driving culture, helping with recruiting, increasing productivity, reducing stress and general brand association. It could be a political cause, it could be a religious cause, it could be a cancer cause.
Potential clients that see you're doing something that they also care about or align with can be a chance for them to reach out to you and to partner up in a particular project or initiative.
It could be personally attached to a CEO's daughter who had cancer and they found out you've been helping somebody in this massive cancer organization. You never know the level of the connections that these associations can bring.
From my experience sitting on non-profit boards, we’ve occasionally acquired new business from fellow board members who themselves ran companies. We’ve also had referrals. That’s another benefit that may come from cause marketing.
Bo: There are large organizations that have drives every year and employees get to wear jeans on Friday if they give money to the cause. That's cool. It's fine for those large organizations. They can have a large impact on another large organization, but the problem with those is it turns into this “What's in it for me?”
Jonathan: I personally have experience with a lot of Starbucks employees volunteering at non-profit events that I attended where they were working the door, the auction, the gala item or they were running the concession materials.
So, if I run into them on the street in my wife, going to some gala or function, and I see them over and over and again, when there are two coffee shops to choose from, I’ll go to the one they work in simply because I want to say thanks. I want to put my dollars where my heart is. That is another benefit: building emotional attachment and loyalty.
You can also build up goodwill. Businesses aren't perfect, they may stumble, make a mistake, have a flaw in their manufacturing quality or their safety. But if you build up a lot of community and a lot of goodwill over the years, people are probably going to be a little more forgiving in those instances when any of these happen.
That's another positive impact that you can literally measure, accumulate and benchmark – the brand equity and goodwill the company has acquired in its communities through its cause marketing, volunteers, cash donations and so on.
Considerations When Engaging in Cause Branding
Bo: I think the interesting thing about that is, our premise for branding is it's unique. Your company is unique and we need to go find you the customers that align with your brand and values; customers that are willing to pay a premium.
Think about Tom's Shoes. My wife looks at those shoes and she's like, “I'm not paying that much for those shoes.” But there are people that will pay that premium so somebody in Africa gets a pair of shoes. Those kinds of things, if they are deliberate and genuine, are valuable to the brand.
It might limit your growth. If you support a certain cause but 50 percent of the United States does not, that means your initial pool is only 50 percent of what it could be. You have to be willing to think, “This means enough to me - and it will get me enough of a premium with that remaining 50% - that it is valauble enough for me to align this with my brand.”
Being honest and open about that choice is critical in any kind of branding. It's just like deciding what your core values are and what products you're going to put into the marketplace. Deciding what you're going to align and associate your brand with is just as important.
Jonathan: Yeah, I mean Hobby Lobby is openly religious in their philosophy. They ran into trouble because they collected artifacts that were by-products of war and the black market. So they turned them back over to the government when they were busted. So, I don't know how much that Christian alignment was honest there. You got to be very careful, to Bo's point.
Chris: Like you mentioned, it speaks to living your brand and values. If you're dedicating yourself or you're aligning yourself and your company to certain values, you need to make sure that you, yourself and your employees are also living those values.
Bo: Yeah, and there’s a trend people have to be careful of today – it’s like an “all or nothing” philosophy. You screw up once, I put you in a box and you don't get a second chance. Hobby Lobby, Chick-fil-a or “insert brand here” does one bad thing and today there is a higher tendency to put that brand in the “never look at it again” box. And that is something that's new. I did a study once with Macondo and BP. This was right when it happened, and my question was, “Did they get a hit on their stock price?”
It was a blip when you looked at the long term. Now, was it goodwill? Was it just the industry they are in where it's expected that a bad thing is going to happen? I don't know. They were doing so much to try and change their brand around the environment but they had historically been so bad to the environment that those two things clashed. Then a disaster happened and they took a beating, but it really didn't slow them down. It actually changed the company for good.
I can't assess how disingenuous or real they were, but they didn't get put in the penalty box as badly seven years ago as if that had happened today. I don't know if that's because of social media. But it's just something to consider when you're aligning yourself with a cause.
Understand what the outcome is, and to Jonathan's point, if you make a mistake or if a buyer screws something up that you don't have control over – which you should have control over, "institutional control" like we hear in sports all the time with the university athletics – that can affect people's decisions. It's still companies of people so you have to be careful about how much you tout it and how you follow through.
And then – this is a whole other topic – crisis management. How do you handle that crisis when it comes? That's all got to be a part of your thinking when you decide these things.
Cause Branding Risks
Chris: So, we've talked about the benefits and we've actually started looking into the risks. Let's take it from an agency perspective, are there any other risks from taking on a lot of pro bono work? Is there anything that you need to be aware of or look out for?
Jonathan: Bo said it early, you can take on so much work it kills your employees.
Bo: And they don't feel like they're doing good anymore. They're sacrificing their families.
Jonathan: They're like, “Oh my gosh, now I got to work another late night because you made me go plant trees.” They could get behind on their workload, which would jeopardize your relationships with your clients because they'd be upset something's late, slow or you didn't pay as much attention to it.
I think those are some of the risks that are associated with that process. I know agencies that have dedicated themselves to one or two entities for 20 years. Other agencies tend to move around quite a bit. For example, we'll take on a couple of bigger initiatives – it might be a multi-year initiative, but then we'll do community good projects that vary every other quarter. It comes back to the strategy of that process.
This might not be agency-specific, but I'm working on a budget right now for a client and I’m trying to find cash in their budget because they're not the kind that's going to dedicate time to this process. It can be a challenge and you have to be careful of that because they consider that donation or sponsorship money coming out of their marketing budget.
I've got a fixed number from the CEO and he's like, “I don't want to go one penny over that.” Well, now I have to make a decision – is that financial investment for the cause marketing going to jeopardize sales and lead generation dollars? I could say, “Hey, let's take five percent or ten percent.” But if then he's five percent short on his sales goals for the year, guess who's going to take the hit? That's an issue that an agency has to occasionally deal with.
Bo: Jonathan's speaking to one of the main challenges people have: you want to be altruistic when you do this stuff, but the reality is, it still comes out of a budget. I think some leaders in organizations have a hard time getting their heads around talking about this.
In some of the boards we have been on, we have had conversations where I've said, “Okay you want to go ask XYZ corporation for $50,000? What are they going to get out of it?” This is because I am on the other side with many of my clients looking at their marketing budget and they're asked that $50,000 dollar question, 50 times a year.
There are organizations that are truly altruistic and their goal is to just give money, which is a different story. But if you're going to go ask XYZ corporation for money, there has to be something in it for them because there's a person on the other side saying, “Do I allocate this money here or there?” It may be a situation where they want to do good but they have to perform too.
I have jumped to the other side of some of the board relationships I have where somebody will be like, “They should just give because we're a good cause” and I'm like, “Well, I agree with you in principle but the reality is that they're running a business. They are a for-profit business.” If they’d have a different CEO that says, “Here are $200,000 a year, just go and give it away”, then it's “Katie, bar the door.” But I don't know many organizations that are like that.
Jonathan: I'll give you another example of a risk associated with this process. We took over an account in December from another agency and I looked at their financials and where they were donating money and time. And it was like 30-40 different organizations.
The CEO feels it's just a little here and a little there, but it's never really enough to make a significant impact. We've been talking with them about their mission, vision, values and corporate structure strategy around philanthropy, and the
What's the risk? I got 27 pissed off organizations that aren't going to get time or money now. I've got a few thousand employees who cared about puppies and now they are putting all my time and money into the forest.
So, managing that change management process is a risk when not done properly. When they don't understand why we're consolidating our time, engaging the employees in that consolidation process is critical to the change that the CEO wants to make.
In this case, I have a lot of non-profits that are not going to see the love and I have a lot of employees that are going to feel like their passion isn't being met anymore. But the upside is I'm going to be able to make a substantial impact in places where I couldn't before. That’s a risk to consider in this process if you're making that adjustment or shift.
Another risk might be in cases of organizations that are not philanthropic and have zero strategies but that suddenly want to start cause marketing, not knowing how or where to begin. They could make some missteps in this process, do it wrong, or piss people off. They could even do things that are actually illegal that they just thought were part of the process.
It may not have been their intent to slip some cash but they didn't realize that was against some governmental compliance or regulatory rule. Here they are, thinking they're doing good but they haven't considered tax laws and how much is deductible.
Stuff changes, so if you're thinking, “Wow I really should be philanthropic,” and you're moved by this podcast – which we hope you all are - take a moment to look at how it could be done, evaluate the situations, in what instances you could get in trouble with overcommitting, under-funding or doing something illegal.
There are mistakes I've seen people make when they say, “Well, I'll give you money but you have to give me this in return.” Well, it's actually illegal for that non-profit to do the thing that they're asking for in return.
Even if it's not the company that's getting in trouble, it could be the non-profit that is put in an awkward position for the pretext of why they're giving cash or time. It warrants being sure that you cross your T's and dot your I's in this process because that's another risk associated with it.
BrandExtract’s Cause Branding
Chris: I think we've covered the ins and outs of cause branding pretty well. One thing I want to do before I let you guys
Bo: There are a couple things. One, there are causes that I give to because my mom had breast cancer, maybe some donation or small sponsorship. But I'm not going to make everybody at
We're involved with Lemonade Day since I appreciate entrepreneurship. They personally align with my brand. It's something I'm passionate about, that I really enjoy and that would benefit the organization. But it's not something I need to force on everybody else here, and I think that's one of the hardest things about being a leader in your organization.
It would be really easy for Jonathan and I to force everybody here to just dive in but I think people gravitate to what they gravitate to. That's why we delegate the decision making regarding where we do our volunteer days. The majority of those decisions are team and organizational decisions.
I have to then separate my time but I also have to make sure it's worthwhile for my family. I also have to make sure it's worthwhile for our business and it's something that I'm passionate about.
I'll be honest, there are times when I feel like I'm not really as passionate about a specific type of cause, the expectation it's a money board rather than a working board, or it is a working board rather an advisory board or I simply don't have the time. There are all those things that go into those decisions but quite frankly, Houston's given a lot to me and my family. And if there are little ways to spend a couple hours a month providing some guidance, or helping to grow another organization that's doing good, I will. It’s the right thing to do.
Jonathan: I gravitate toward what I call the “One-to-Many” philosophy when it comes to getting personally involved with a non-profit. You can use the analogy, “You can teach a man to fish or you can give him a fishing pole and teach him how to fish.” I just like the compounding impact of organizations like that. If I help them with the thing I'm doing, then it helps many.
Look at organizations like the ToolBank. If I buy a hammer once, I can lend it a thousand times as opposed to giving 1,000 hammers to 1,000 different people. I like the compounding, evergreen and geometric effects that non-profits have.
There’s nothing wrong with making sandwiches for kids but you know what, they eat it, you have to make another one, and somebody's got to do that. So thank them – and we've gone and made sandwiches for kids – but if I'm going to sink my own personal time into an organization, it's probably going to be an organization that has some kind of force multiplier component.
I feel like I'm doing the greatest good possible when you get involved with, say, education. You break the cycle of poverty as literacy is a massive force multiplier for many communities.
That's just me. I gravitate toward those types of entities.
Bo: I think what Jonathan's referring to, much like he said earlier, you have to look at a company like a person. I think I talked about that in my Business Law class in college. Companies get sued like people and their actions are sued just like a person's actions are sued.
That struck me in school because it was a really interesting concept, so I started to take that with branding. Much like an organization, it's a group of people that start to gravitate toward certain things it wants to support, individuals do the same around their brands.
It's not just things they care about. It may be, to Jonathan's point, a type of organization they want to support, or a cause that hit them when they were young and they want to support it. You hear about that all the time with athletes, for example. They want to give back in a way that impacted them. It may only impact a small group of people but it’s like your own personal brand, you choose things that benefit you.
Jonathan: There's no right or wrong. Whether you're aligned with education because you've got kids or your parents were teachers, or you lost a family member to cancer, which I did. I'll do a little something for some cancer organization here and there but I don't know how I can really make a difference.
Yet, there are some organizations where I feel like my time, my cash or my advice goes a really long way and has compounding effects for years. That's just my personal strategy.
Chris: Well, Bo, Jonathan, thank you guys so much. This has been fantastic.