September 23, 2011
Luxury marketers tend to host events or team-up with charities to create a halo effect around themselves, and some experts believe that affluent consumers respond quite well to this strategy.
Brands that partner with charities, or even start their own, usually put themselves in the good graces of consumers worldwide because it shows that the marketer cares about shared causes or charities with their customers. This could build brand loyalty and awareness, ultimately leading to transactions.
“There are many types of cause marketing such as programs that link donations to purchases, initiatives that promote consumer support of a cause and campaigns that encourage behavior change,” said David Hessekiel, president of the Cause Marketing Forum, Rye, New York.
“To create a program that adds value to a luxury brand, management must determine their business goals before selecting a cause marketing approach,” he said. "Numerous consumer attitude surveys show that people would prefer to buy from companies that are good corporate citizens.
"In the luxury field, some academic research indicates that buyers are even more attracted to cause-related programs linked to purchases that could be considered self-indulgent."
Building a foundation
To garner attention from their niche customer base, luxury marketers promoting a charity or cause tend to invite affluent consumers to an event.
“Well-conceived and produced cause-marketing programs can drive retail traffic, enhance a brand image, engage employees, generate consumer awareness or contribute to other business objectives,” Mr. Hessekiel said.
For instance, American Express’ Departures Global Arts Initiative partnered with famed auction house Sotheby’s to curate an exhibit that celebrated the 15th annual destinations issue of Departures magazine, “The New Asia” (see story).
Both Sotheby's customers and Departures readers, who have an average networth of $476,000, were invited to the event to buy art and see the venue.
On the other hand, some luxury brands tend to partner with one another for cause marketing.
This not only looks good for both brands, but likely doubles the customer base because they are each inviting their most valued clients who probably would be interested in goods or services from the other brand.
For instance, Swiss watchmaker Longines and Hearst’s Town&Country magazine partnered to seek out and award three women who make a difference in the lives of children around the world (see story).
Valerie Salembier, Stefanie Graf, Gracie Cavnar, Ann McGee, Anne Adler (accepting for Ann Tisch) and Jennifer Judkins
By targeting consumers, especially parents and female consumers who care about the three children’s charities that the women supported, Longines and Town&Country probably put them in a positive light to their core customer bases.
Finally, some brands partner with charities or a sporting event that end up benefitting a charity.
For instance, when German automaker Audi and American jeweler Tiffany & Co. sponsored The Foundation Polo Challenge which benefits the American Friends of the Foundation of Prince William and Prince Harry, both brands were able to hook one another’s customer base, interested polo enthusiasts and British royalty fans (see story).
The Foundation Polo Challenge
To top it all off, the charity benefitted the foundation and created revenue for the club where it was held.
Some brands are on another level.
For instance, Burberry started its own charity, the Burberry Foundation.
The Burberry Foundation partners with schools, foundations and organizations worldwide and acts as a vehicle to help young people discover their dreams through creativity.
Although some find that partnering with other brands and charities is a smart move, companies still need to be careful since unwarranted or confusing partnerships could confuse consumers.
“This is very case-specific,” Mr. Hessekiel said. “What I would suggest is that brands be deliberate in their planning.
“Few companies that spread small contributions around to many charities end up with much business benefit,” he said. “It's smarter to be more focused so that you can concentrate your funding, in-kind contributions, marketing investment, staff and agency time and resources on programs that will be noticed and have an impact.”
Brands just beginning to try cause marketing should take their time rather than going headfirst, per Mr. Hessekiel.
“Crawl, then walk, then run,” Mr. Hessekiel said. “Investing time in testing programs and seeing how you work with a nonprofit partner will enable you to get the kinks out before you announce your cause marketing efforts to the world.
“All too often, brands fall in love with the idea of building a cause affiliation without having real business objectives,” he said. “Set your business and societal objectives first.
“Get buy-in from top management, then dive into selecting an appropriate partner and creating a program.”
Rachel Lamb, associate reporter on Luxury Daily, New York