In a good cause - with benefits

By SIMON HENDERY

Auckland company USL Medical did its homework before signing a corporate sponsorship deal - a commitment which many businesses see as a financial black hole for their meagre marketing budgets.

Eighteen months later, the medical supply company's researched approach is paying off in some unexpected ways.

It says its relationship with its chosen charity - the Brain Injury Association - has improved relationships with its suppliers, boosted company morale and assisted with staff recruitment.

Strategic sponsorship arrangements between companies and charities - known as cause-related marketing - are becoming increasingly popular as businesses see the payoffs of doing good work in a way that offers a return on their investment.

Business consultant Peter Rachtman, whose Stillwater Associates specialises in cause-related marketing, said exact figures were not available, but such marketing spending by New Zealand businesses grown several-fold during the past few years.

"It's become recognised in the past three or four years as being an important influencing factor in consumer purchasing decisions, and people are recognising that doing well makes money for them."

In 2000, Rachtman wrote Good Is Gold, a report on cause-related marketing, and carried out the consultancy work for USL, which resulted in its relationship with the Brain Injury Association.

He said small-to-medium companies believed they would not have the money to benefit from a relationship with a charity.

But USL, with annual sales of $23 million, showed what could be done with a relatively small outlay.

USL's director of sales and marketing, Karen Longdill, said her company worked with the Brain Injury Association to integrate as many of its activities as possible and that approach had been good for USL's business.

USL customers knew about the relationship because they received the association's newsletters and many had commented favourably on it to company representatives.

USL staff supported the relationship.

"Many volunteer to help in BIA street appeals and others have taken the lead by running their own collections and cake sales for brain injury," Longdill said..

"We are convinced the team attitude at USL is stronger and more positive as a result of the work we are all doing to help a worthy cause.

"We even received a job application from a well-qualified person who approached us feeling this would be a good place to work - all because of our relationship with the Brian Injury Association."

The relationship also helps disseminate USL products.

The BIA has been running a fundraising campaign which rewards significant contributors with a USL First Aid Kit.

More than 13,000 kits or refills, branded with BIA and USL logos, have been given to donors.

BIA marketing director Harley Pope said head injuries affected about 30,000 people a year with a flow-on effect to families and friends. Such a high number helped explain the strong interest USL had experienced.

Both organisations worked hard on mutual publicity and promotion.

"USL features strongly in our communications and at our conferences, and it incorporates information about our relationship into all its presentations," Pope said.

Longdill said USL's involvement with BIA was not dependent on the positive feedback it was receiving.

"But USL is a profit-driven company and we are the first to acknowledge that this relationship has been good for our business."

MAKING CHARITY WORK

A successful cause-related marketing campaign must be:

* Strategic. Any cause-related marketing campaign must be well planned and well executed. It is not a matter of contributing to a worthy cause with some vague and hoped-for benefit.

* Relevant. The company and the charity must share certain common goals, objectives or target groups. This must be determined early in the exercise to ensure maximum benefit to all parties.

* A partnership. The relationship must truly be a partnership. The rules must be established early in the negotiation and both parties must understand the other's needs.

* Measured (it is important to develop a system that will analyse and measure the campaign from start to finish), tangible (money raised, increased sales) and intangible (consumer awareness, new brand perceptions).

(Source: Good Is Gold - the Stillwater/ACNielsen report on attitudes and business directions in New Zealand for cause-related marketing.