As published in Scotsman Guide's Residential Edition, February 2012.
Increasingly, companies are seeking the marketing spotlight by partnering with nonprofit organizations through cause-related marketing. These joint ventures offer advantages for consumers and companies alike. Mortgage brokers and originators may have much to gain by partnering with nonprofits to increase the effectiveness of their marketing campaigns.
The importance of marketing is undeniable for any business, but companies often conceive of their marketing in one-dimensional ways. They equate marketing with advertising in the hopes of boosting sales, yet they forget other aspects of marketing like building company reputation and customer loyalty.
Cause-related marketing in partnership with nonprofit organizations offers companies a way to involve multiple facets of marketing into a single campaign. By associating themselves with a cause, companies can project an image of social good to the public and use this image to draw in new customers while solidifying long-term relationships with existing customers.
Mortgage originators can participate in cause-related marketing in many ways, but the choices can be simplified by categorizing them as either message-communication campaigns or giving campaigns. With message-communication campaigns, companies partner with nonprofits to use their corporate marketing resources to relate to the social good of the nonprofit. Joint branding is done for all advertising, and the result is the projection of a responsible corporate identity.
This image has proven to be valuable in gaining and retaining customers. For instance, the 2010 Cause Evolution Study by Cone Communications found that 80 percent of consumers are willing to switch from one brand to another comparable brand if the latter is associated with a good cause. The same study also found that 61 percent of consumers are willing to try a completely new or unfamiliar brand if it’s associated with a good cause.
These findings show how cause- related marketing impacts a company’s marketing results, but what they fail to show is the positive impact on the nonprofit. Cause-related marketing is extremely beneficial to nonprofits in that they traditionally don’t have the resources to promote their message as broadly as for-profit companies do. By working together, everyone can benefit from the attention being brought to the cause and to your company.
Message-communication campaigns are an essential part of cause-related marketing, but the bulk of campaigns involve giving. Giving campaigns can be structured as facilitated giving or purchase-triggered giving, but both involve donations to nonprofits on behalf of a for-profit company.
Facilitated-giving campaigns involve companies making donations as part of the relationship, while purchase-triggered giving campaigns rely on customer actions to provide donations. For instance, a company might agree to donate a percentage of their sales to a good cause, which, in turn, encourages consumers to increase their spending.
As with any marketing strategy, the success of cause-related marketing depends on its execution. Companies must be careful to align themselves with a cause that appeals to their customers. Bearing that in mind, mortgage professionals should consider partnering with community development organizations or children’s support organizations, as homebuying has always been rooted in family and community.
It’s also important to refrain from appearing disingenuous to consumers; overzealous or self-serving marketing campaigns can outrage consumers and shine a negative spotlight on those involved. With proper planning and execution, however, cause-related marketing can take mortgage lending businesses to new levels of profitability and social responsibility.
Dan Schenk is program specialist for the PenFed Foundation, a national charity working to provide a secure financial future for the armed forces.
The foundation offers several programs to help military and government employees meet their financial goals. The Dream Makers program offers grants of as much as $5,000 to first-time homebuyers of modest means who work to protect national security. For information on Dream Makers, visit PenFedFoundation.org. Reach Schenk at firstname.lastname@example.org or (703) 838-1335.