Cause Marketing Can Help Companies Regain Trust
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Holmes Report

Cause Marketing Can Help Companies Regain Trust

Companies looking to earn the trust of an increasingly skeptical public should consider aligning their businesses with good causes, according to the 2004 Cone Corporate Citizenship Study.

Paul Holmes

Companies looking to earn the trust of an increasingly skeptical public should consider aligning their businesses with good causes, according to the 2004 Cone Corporate Citizenship Study, which found that eight in 10 Americans say that corporate support of causes wins their trust in that company, a 21 percent increase since 1997.

¡§Our report is the nation¡¦s longest study of American attitudes toward corporate support of social issues,¡¨ says Carol Cone, CEO of Cone, a Boston-based specialist in cause branding. ¡§This study, in a series of research spanning over a decade, shows that in today¡¦s climate, more than ever before, companies must get involved with social issues in order to protect and enhance their reputations.¡¨

While support of social issues can improve trust in a company, Cone¡¦s research also shows that Americans are ready to act against companies that behave illegally or unethically. The consequences for business can be devastating and long-term; many of those surveyed said they would be likely to:
„X Consider switching to another company¡¦s products or services (90 percent)
„X Speak out against that company among my family and friends (81 percent)
„X Consider selling my investment in that company¡¦s stock (80 percent)
„X Refuse to invest in that company¡¦s stock (80 percent)
„X Refuse to work at that company (75 percent)
„X Boycott that company¡¦s products or services (73 percent)
„X Be less loyal to my job at that company (67 percent)

Over the lifespan of the survey, Americans have grown to expect companies to play a more active role in addressing the needs of our society. In 1993, 66 percent agreed that it was acceptable for companies to involve a cause or issue in their marketing. Today, 72 percent believe the use of causes is acceptable.

Meanwhile, the number who described themselves as either very or somewhat likely to switch from one brand to another that is about the same in price and quality, if the other brand is associated with a cause has remained remarkably constant: 85 percent in 1993; 86 percent today. Although there seems to be a generally increased willingness to base other decisions on corporate social responsibility: 85 percent say a company¡¦s commitment to social issues is important when they decide:
„X Which companies they want to see doing business in their local community (85 percent, up from 84 percent in 2002);
„X Where to work (81 percent, up from 77 percent);
„X Which products and services they will recommend to others (74 percent, down from 75 percent); and
„X Which stocks or mutual funds to invest in (70 percent, up from 66 percent).

¡§Some companies have recognized the positive impact of supporting social issues, and have aggressively communicated their efforts over the past few years,¡¨ says Cone. ¡§At the same time, many other companies have traditionally been reluctant about such communications, seeing them as boastful.¡¨

The survey finds an overwhelming majority of Americans (86 percent) want companies to talk about their efforts, but only four in 10 say companies are doing that well.

¡§These facts side-by-side are a mandate,¡¨ says Cone. ¡§For senior executives, they are a mandate for action on social issues. For marketing executives, they are a license to communicate the company¡¦s commitment and efforts.¡¨

One of the results of increased communications by certain companies is that when asked, more Americans can name a good corporate citizen. In the 2004 survey, about 80 percent of respondents could name a company that stands out in their minds as a good corporate citizen, up from 49 percent in 2001 and just 24 percent in 1999.

Cone¡¦s research shows that while communicating support for social issues is impactful, Americans value other positive corporate actions even more:
„X Quality of products and services (98 percent)
„X Fair-priced products and services (97 percent)
„X Employee benefits (93 percent)
„X Laws and regulations (93 percent)
„X Human rights and manufacturing (93 percent)
„X Support of a social issue (80 percent)

¡§This suggests to us that advertising support of social issues without ¡¥walking the talk¡¦ in other areas can be counterproductive and poor business strategy,¡¨ says Cone. ¡§These statistics, when combined with the Reputation Institute¡¦s results, show that building trust and enhancing reputation requires companies to be good corporate citizens across all of their business practices.¡¨

Cone¡¦s research also shows that young Americans (18-25 years-old) are significantly more likely to consider a company¡¦s citizenship practices when making purchasing, employment and investment decisions.

¡§Today¡¦s young adults have learned to become savvy consumers and have recognized the importance of a company standing for something that they believe in,¡¨ says Cone.  ¡§Our research shows that cause-related activities will influence not only their buying habits, but also gain their loyalty and trust.  Aligning with a cause is a significant strategy for companies to attract consumers and a future workforce at an early age and gain a long-term, sustainable competitive advantage.¡¨

Finally, as Americans are seeking to hear more about corporate support of social issues, they¡¦re placing the greatest credibility on information gained from third-party sources:
„X Family and friends (59 percent)
„X Government agencies (38 percent)
„X News organizations (37 percent)
„X Internet (31 percent)
„X Religious organizations (29 percent)
„X Charities (26 percent)
„X The company itself (23 percent).

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