In general, consumers feel comfortable when a company engages in activities promoting its products as this is expected and relevant with the obvious goal of making money and staying in the market. However, this is not exactly the case when the company engages in socially-related activities through transactional means. At that point consumers become quite skeptical and they start wondering about the true motives lying behind such an “engagement”: Is the company self-centered or other-centered when it undertakes socially responsible activities? Is the company driven by its own egoistic and strategic motives or is it driven by valuing society and the impact of its activities upon the related stakeholders? Research conducted by Vlachos and his colleagues (2016) sheds some light on this important issue.
As it is widely known today’s companies need to have a strong sense of responsibility towards the community and the environment they operate in. This Corporate Social Responsibility (CSR) vastly contributes to a company’s image nowadays. From a strictly marketing perspective CSR appears through Cause-Related Marketing (CRM) techniques which actually are monetary or non-monetary contributions to a social cause each time a consumer transacts with the company. Nonetheless, CRM triggers a consumer’s skepticism more intensely due to its inherently selling-oriented nature. Can a company reverse this? According to the foregoing research the answer is positive. A business firm can reverse this negative perception and this largely rests upon the donation frame followed and communicated to the public. But let us be more precise about this based upon Vlachos et al’s (2016) research.
Through a review on the existing literature centered around the CRM subject the authors conclude that there exist different CRM donation frame types moving along the dimensions of monetary vs in-kind donations and specific vs vague donation amounts. The former dimension refers to whether a company will monetarily or non-monetarily contribute to the social cause. That means that a company can contribute either by donating money or by providing some other kind of help like for instance, product units. The latter dimension refers to whether the monetary amount offered by the company will be specific (for instance, a certain amount of Euros for each unit sold) or more abstract (for instance, a percentage of sales to be given for the social cause at hand). According to the authors this two-dimensional approach results is three possible categories of donation frames that a company can adopt: (a) an in-kind, (b) a currency-specific and (c) a vague monetary. Which can actually be more effective in producing consumers’ favorable perceptions about the underlying motives of a business firm when it undertakes CRM activities? In other words, which of those three approaches is the most efficient in persuading consumers that a company undertakes a socially-responsible activity out of genuine interest and not in order to make more money? The authors conducted a research to answer this intriguing question.
The investigation took place during the Special Olympics in 2011 as an exceptional instance gathering numerous CSR and CRM initiatives by a large number of multinational companies. Moreover, a specific and most renowned company-case which actually employed relevant activities included in all three aforementioned donation frame categories was chosen as the real brand name. Relevant scenarios concerning this brand name and which represented these three donation frame type categories were built upon. In addition, plus an extra case pertaining to a philanthropic donation rather that a CRM donation-type frame was used. Finally, through a face-to-face personal interviewing approach those scenarios were delivered to a total of 805 consumers asking them subsequently about relevant perceptions of the company’s underlying motives to engage in a CRM activity among others.
The results basically justified the researchers’ expectations that the in-kind donation frame type would be the most effective in producing consumers’ favorable perceptions about the company’s underlying motives when engaging in a CRM related activity. In addition, and contrary to previous findings a company’s vague monetary contribution appeared to be better than a currency-specific one which means that it seems to be better for a company communicating that it contributes to the social cause with a vague percentage of sales than actually stating the amount. Finally, given its non-inherently selling-nature, the philanthropic donation scenario was more effective compared to the CRM-related ones in evoking consumers’ favorable perceptions about the less self-centered egoistic and more other-centered motives lying behind the company’s engagement to socially-related activities.
As a conclusion:
- Business firms should consider checking on the exact characteristics of their CRM campaigns and subsequently place them under the specified generic types identified by the authors. This, in order to potentially assess their likelihood success in terms of tackling consumers’ skepticism concerning the company’s true motives for engaging with social-cause related activities.
- Managers should prefer an in-kind donation frame type which appears to be more related to doing (i.e, contributing to the social cause by providing and acting) rather than just paying (i.e., contributing to the social cause by paying some money). In other words, by using an in-kind donation approach it is more likely that consumers will perceive the company’s effort as a genuine effort to support the social cause rather than to increase its sales and profits.
- Given that a corporate philanthropy approach can outperform CRM-related activities in producing better consumer perceptions about the company’s motives, it will be even more effective if a company adopts an in-kind corporate philanthropy approach compared to a monetary-related one in order to communicate its engagement to a given social cause.
By Ioannis Theodorakis, professor at INSEEC Business School.
For more details:
- Vlachos, P. A., Koritos, C. D., Krepapa, A., Tasoulis, K., & Theodorakis, I. G. (2016). Containing cause-related marketing skepticism: A comparison across donation frame types. Corporate Reputation Review, 19, 4-21. http://dx.doi.org/ 10.1057/crr.2015.23
This research paper made it to the top ten list according to the Social Science Research Network (SSRN)’s CGN: Consumers (topic). More precisely, this research was published in February 2016 and as of June 2016 was downloaded 242 times.