If you watch TV these days, you have probably seen the ad for 5 Hour Energy Drink’s newest flavor, Pink Lemonade. Living Essentials, LLC, the company that makes the energy drink has teamed with the Avon Breast Cancer Foundation to market its product with a percentage of each purchase going to the foundation for a minimum corporate donation of $75,000 from the company. This is good for the foundation as it will allow it to spend money on breast cancer research and help low income women get screening for cancer. It also means more sales for 5 Hour Energy Drink and helps it bottom line improve.
Cause Marketing has been around for a while. Organizations and businesses collaborate for a cause and, to quote David Hessekiel, President of the Cause Marketing Forum, “they can make a difference in tackling a societal problem and generate loyalty, attention and patronage from consumers, employees, investors and opinion leaders.” While nonprofits do get the benefit of a cash infusion for their programs, businesses gain income as well. They also have the opportunity to portray themselves as responsible citizens in the community, the nation, and the world. It is marketing, after all.
The great thing about cause marketing is that it can work for small organizations and small businesses as well big organizations and major corporations. While the big companies tend to help major organizations with their highly recognizable campaign with “pink ribbons” or other icons emblazoned on the products they sell, small businesses like restaurants and stores get into the act with local nonprofits. There are a number of restaurants that have “half nights”, where on a designated night, half of the money they make from sales goes to the organization of their choosing. The benefiting organization is expected to get the word out to its supporters to get them to go out for dinner, and it is supposed to increase sales for the restaurant while generating income for the organization. Sometimes these events are quite successful, but if supporters are busy or low on cash and cannot afford the price of a meal, the results are not so great. Some places put restrictions on the offerings, like the money will only come from food sales and not alcohol sales. In those cases, the business may lose money and then decide not to try it again, or at least not with that particular organization.
The problem I have with cause marketing is that many times, it is not clear how much of the proceeds go to the organization, and apparently I am not alone. The Attorney General of New York recently released a set of best practices that, although they have no legal standing, let businesses and nonprofits know that there needs to be more transparency in the deals that they set up. To read these best practices, please click on the link below.
Consumers and donors have a right to know as much about the details of the marketing campaign, and trustworthy organizations and businesses should guarantee that their customers and donors know how much of their purchase actually goes where it is supposed to go and how it will be used. I laud New York Attorney General Eric T. Schneiderman for his actions and hope that more states follow suit.
The partnership of Avon Breast Cancer Foundation and 5 Hour Energy Drink is a good example of what is lacking. While the advertising mentions that the company will make a minimum donation of $75,000 to the foundation which is good, it does not specifically mention how much of each purchase is applied, which is not so good. Maybe it’s just me, but I would like to know the details.
When it comes to nonprofits and businesses, the more transparency is better. The reputations of both entities can be tarnished if something shady appears to go on, and once the reputation is harmed, it is very difficult to repair.