When growing your business, it can be really hard to keep expenses under control. On some fronts, you can cut costs, but in some of your business operations, investments simply can’t be avoided.
When it comes to marketing, for instance, some expenses are simply necessary, if you want your firm to grow.
When addressing the advertising budget, marketers like to use the expression “revenue expenditure” as opposed to simply ‘marketing budget’ to emphasize the unavoidable need to spend in advertising, if you want to generate steady income.
As a result, startup organizations need to resort to external funding, often in the form of venture capital to scale, once the customer acquisition cost has been quantified.
The customer acquisition cost is defined as the cost associated with acquiring a new customer and it is directly connected to the advertising strategy pursued by the company.
But isn’t there some other way to run a business without embarking on hugely expensive advertising campaigns?
There has to be a better approach to building a community of engaged customers without breaking the bank or jeopardizing the financial stability of the firm.
There actually is a better way not to spend any money in advertising and still grow a strong customer base, but it requires commitment and a strong, long-term vision.
We are referring to companies who succeed in creating a 0 budget marketing campaign using cause marketing strategies to build their business.
Intrigued? Read on and we’ll tell you all about it.
Escape the Noise, Avoid Extremely Expensive Campaigns.
The truth is that many companies lack real uniqueness when it comes to developing their brand’s positioning strategy.
Many businesses compete on price, some on customer services, a few on heritage.
Aside from these typical ‘arenas’, very few businesses have something that really sets them aside.
In branding, marketers study customer’s perceptions by comparing and contrasting two distinct sets of attributes that concur in developing the mental image of a brand.
These two sets of features can be split into:
- Points of parity. These are the “market requirements”. These are what is expected by the market in terms of minimum quality\service requirements to adequately compete in a demanding market.
- Points of difference. These points of difference are a set of distinctive elements that can make the brand different in the eyes of the customer. This is where brands display some additional feature that makes them stand out in a busy market.
Identifying the right points of difference are a key strategic decision. The closer you hover over the traditional points of strength that a product can display in terms of quality, price, or recognition, the harder it will be to make yourself noticed.
Companies in their startup stage end up knowing all too well, that unless they’re able to differentiate the experience they’re providing to their customers in a meaningful and memorable way, their journey to commercial success is going to be a really steep one.
These organizations end up facing what can be compared to an all-in roulette bet, choosing a set of associations that make them look different and hoping that the attributes they based their product on will be appreciated by customers.
The motto goes “all profit comes from risk” but, there has to be a better way to at least manage this risk or direct it towards goals that are not merely commercial.
This is when cause marketing comes in to provide a new perspective on this strategic decision: one that could potentially make us rethink the way we run the whole business.
If you’d like to know more, in the next section of the post we’ll be looking into cause marketing to disclose how connecting your brand to a social or environmental goal can make all the difference.
What is cause marketing?
Cause-related marketing can be defined as a marketing strategy focused on fostering value co-creation between a brand and its customers, by having products and services serve a bigger purpose.
Cause-related marketing dares companies to take an active and committed stand for a social or environmental cause.
Sometimes brands can also choose to develop a collaboration with a not-for-profit entity so that: the brand may increase sales, while the not-for-profit organization may have an opportunity to promote its cause.
Cause marketing is a new way to explore an entirely new set of associations that can resonate with a brand’s audience and drive profitable customer action.
Customers are now much more willing to take part in the value of a brand, aligning their own purchase decisions with their sense of self and personal identity. This is also what we call: value co-creation.
In more detail, value co-creation means that brands could see their products and services not only as an end (a transaction) but more as a means, or a gateway to building a long-term relationship with their customers.
This relationship can then aspire to change the world by tackling global challenges.
If you are able to develop a marketing strategy, where your unique value proposition is the connection to a cause that is meaningful to your customers, then you’ll be able to connect to your market in a more profound and meaningful way.
If you’re able to successfully build this cause-related link, then your ad spend will be greatly improved, as you’ll be marketing an idea that is much stronger than any product feature, or time-sensitive discount.
Is this it? Actually no, we’re only scratching the surface. In the next paragraph, we’ll see how this approach can help you much beyond your marketing department and help you build a fully-fledged business model.
More Loyalty and Advocacy thanks to cause-related marketing and impact-first business strategy
Would you like to explore this idea of cause-related marketing a little further? Well then, consider this.
As you develop your marketing strategy, the key metric you’re looking to optimize is your return on investment.
Whatever amount you are spending on your marketing, you want to make more in sales.
This approach is what makes your business profitable, but it’s also what makes your customers a little hesitant when they see you launching a new initiative that is connected to sustainability or humanitarian causes.
This is commonplace in the case of greenwashing, or when businesses use ethical practices as a façade to draw the customer in, but with no commitment to actually bettering the industry.
In many instances, despite the good intentions that brands display, customers are building distrust towards unbacked claims.
But what if profits were not the primary objective of your business?
What if making an impact and solving a global problem was the first priority, and making money was simply a consequence of that?
This innovative perspective on business is what we call an impact-first business model.
An impact-first organization is an organization that focuses all of its efforts on creating change, at the cost of jeopardizing its own sustainability.
This is a type of commitment that gets customers really excited about supporting a company that is genuinely different. Would you like an example: take a look at this article on Angel Chang. Also, if you’d like to read more about business models to pursue social and environmental change, here’s another helpful resource.
If you are pursuing a cause-marketing approach to build your brand or if you are daring enough to become an impact first company then your advertising costs will be very very limited, as PR relationships will propel your company much more than any paid advertisement.
As a result, the customers who follow you will become loyal advocates, ready to spread the word and make change happen.
Great! Now that we’ve covered all bases, let’s draw some conclusions.
As we’ve discussed, cause marketing can provide a completely different approach to how you develop a product, build an audience or even start a business.
Cause-related marketing is in fact a paradigm-shiting approach that can completely alter the way in which you see the future of your business.
As a result, companies who pursue social and environmental causes will find themselves creating a new dimension of success that stray away from the ‘bottom line thinking’ or profit.
We explore this topic in greater depth in this article entitled: Measuring Success: From ROI to Social Return on Investment.
If you’re interested in reading more on the topic of cause-related marketing, explore our blog, which is filled with helpful free resources on the subject. Enjoy!