What if 5% of every marketing budget was directed towards social good?

By John McNeel in Exclusives, Guest Blogger
January 06, 2016 05:00

One relatively underused weapon in a marketer's arsenal is what's becoming known as the "social good incentive" -- the ability to shape attitudes and, more importantly, behaviors by engaging customers or other stakeholders around some of the things they care most passionately about: the social initiatives, nonprofit causes, community organizations and global charities they believe have the power to truly change the world for the better.

The evidence is overwhelming that consumers want to connect the choices they make to the values they believe in. As the Cone Communications 2015 Millennial CSR Study established, 9 out of 10 millennials stated they would switch to a brand associated with a cause they care about.

This emerging trend sits at the intersection of purpose and profit, creating the ultimate connection between doing well and doing good. As a result, it's driving an urgent need to fundamentally rethink the silos that exist between corporate philanthropy and marketing, between outmoded corporate social responsibility (CSR) practices and the ways brands are struggling to engage their audiences in a world of transparency and transformed consumer expectations.

Major corporations are beginning to now come to grips with a stark new truth: that the emerging importance of Purpose -- what Jim Stengel calls "the management philosophy of the 21st century" -- requires new approaches not only to strategies, activities and operations, but also to budgeting.

It's time to apply a new "social good standard" to how your brand should invest to engage your stakeholders — whether internal or external, employees, partners or customers. How? Start by earmarking 5% of your marketing budget to invest in programs that allow those stakeholders to directly channel money towards the relevant causes they care the most about.

This is not only good for the world; it's good for your bottom line.

Playing catchup to where consumers have already moved

Back in the day when I was just starting to cut my teeth on how advertising worked, the prevailing science was that of the USP -- the Unique Selling Proposition. It went something like this: identify one compelling, differentiated reason for consumers to prefer your product over the competition, and you will win. It was the time when the Left Brain ruled.

Then, for a couple of decades starting in the early 80s, marketers seemed to discover and quickly embrace the fact that consumers had hearts as well as minds. Emotion became a differentiator for brands; you could feel your way to market dominance.

Finally came the new century, which has witnessed two critical trends that have yet to fully intersect:

1) The increasing control that has passed from the marketer's hands into the customer’s. Consumers today can produce content, shape media choices, and direct the trajectory of a brand's reputation. This has required brands to shift from a broadcast mode to an interactive mode. Thus the advent of People Empowerment.

2) The emergence of brands that have articulated a vision that goes beyond revenue. They answer the crucial question of why they are in the world in the first place, associating themselves with human values that drive societal change. This is the advent of Purpose.

The conjunction of these two trends carries some significant implications for marketers. Whether they’re targeting the much sought after Millennials, or the up and coming generation sometimes called the Centennials, today’s audiences have increasingly become protagonists in brands' narratives and behavior systems. These consumers expect to participate, not just observe. They also want to choose brands that reflect the lifestyle and values-based choices they are making. And they want to be able to do both, at the same time, anywhere, seamlessly linking their purchase decisions with an ability to proactively shape how their acts as consumers are also impacting the world for the better.

Don't just dream the change, engineer it

By carving out 5% of every marketing budget for social good incentives that consumers control, marketers will be doing no more than putting their money where their mouth is. Most of the enlightened (and therefore successful) ones have already embraced the concept of purpose as central to how their brands must succeed in the marketplace. And they've had no choice but to jump on the people empowerment bandwagon as well.

But too many marketing dollars are still being channeled into traditional incentives -- coupons, discounts, promotions, contests, short-term campaigns to buy consumers' favor by giving back to them. Instead, try giving your consumers something they can give back to others and you'll be stunned at how exponentially it will change your brand loyalty dynamics.

In Happy Money: The Science of Happier Spending, Professor Michael Norton from the Harvard Business School established authoritatively that social good incentives drive more consumer satisfaction than traditional incentives.

“So, what’s a socially responsible company to do?” asks Professor Norton. “As a start, we would encourage companies to think about fostering the conditions that promote the warm glow of giving, structuring cause-marketing initiatives so that customers feel that they are making a choice to support the cause, that they are connected to the beneficiaries, and that they are making a real impact." [emphasis mine]

Five per cent is no more than the average margin of error on most of your programmatic spend or mistargeted advertising. It's a small amount to direct into a simple proposition: reward your customers with the ability to give back to a cause that really, truly matters to them.

This fundamental shift in the corporate and marketing budgeting philosophy and process -- in effect erasing the artificial boundaries that have existed between how companies give back to their communities and how they market their products -- will usher in the next era of purpose-driven brands.

It will deliver the brand's power to give back right back to where it has always belonged: into the hands of the consumer.


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