Generosity is Key: How Should Corporations Market Social Causes?

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Forty-one percent – that is how many consumers can be classified as “purpose driven” consumers, according to a joint IBM – National Retail Federation study. Purpose-driven consumers choose brands that both align with their personal values, even if those brands require them to pay a premium. Purpose-driven consumers, many of whom are younger consumers, are even willing to change their shopping habits to reduce environmental impact. Especially powerful is when brands fund charitable causes or act in a manner that demonstrates a higher level of social responsibility than competitors.

As a result, many businesses have decided to navigate the relatively uncharted territory of speaking out on public policy and social causes as well as explore new ways of collaborating with non-profit organizations to raise awareness on a topic or to fundraise. For example, Uber’s stock suffered a 17.6% decline once the pandemic began, as demand for its service immediately dropped by 60-70% in some areas. As part of their “Move What Matters” campaign, Uber urged customers to stay at home once lockdowns began so it could provide free rides and food deliveries to healthcare workers. Despite the threats to its financial performance in 2020, Uber and its workers became a part of the “frontline” by partnering with and supporting healthcare workers. Now that most restrictions have ended, consumers are returning to ridesharing while also continuing to use food delivery services. It remains to be seen, however, if Uber will be rewarded for its campaign and work during the pandemic.

While laudable on a surface level, have stances like these worked to increase brand recognition and appeal to consumers who share these values? If so, will they continue to work now that lockdowns have eased? The risk that they could come off as virtue signaling instead of activism always remains a possibility. In short, just how exactly should corporations navigate the touting of social causes?

An article from the Journal of Business Research by Molly Inhofe Rapert, Anastasia Thyroff, and Sarah C. Grace tackles that question. In “The generous consumer: Interpersonal generosity and pro-social dispositions as antecedents to cause-related purchase intentions,” the three researchers investigate just who the generous consumer is—one who listens when these companies speak up. “This isn’t simply altruism on the part of the companies,” they say, “it is a sound business strategy that resonates with consumers, serves as a buffer against the competition, and positively impacts the bottom line.”

Cause-Related Marketing

“What do world starvation, tobacco, and positive body image have in common?” the researchers ask at the top of their article. “They are all causes aligned with marketing tactics being used to lure consumers to change the world with their wallets.” It’s called cause-related marketing, and it’s a strategy that helps businesses attract customers who devoutly tie their consumption habits with their personal values. And research shows that cause-related marketing works: one study from Cone Communications CSR found that “87% of consumers will purchase a product because a company advocates for an issue they care about while 76% will refuse to purchase a company’s products or services upon learning it supported an issue contrary to their beliefs.”

The researchers define two common methods of cause-related marketing: traditional and one-for-one methods. “Traditional cause-related occurs when a company donates a portion of its sales/revenue to a particular charity.” For example, clothing manufacturer Patagonia contributes 1% of its sales toward sustainability efforts. “One-for-one cause-related marketing occurs when a company donates a matched item for every item sold.” Arkansas-based fast food restaurant Tacos 4 Life donates a meal to a developing country for every meal sold in the United States. Contributions like these inspire consumers: “Americans, frustrated with the government’s inability to act quickly,” the researchers write, “are increasingly turning to charitable organizations to facilitate aid for those in need.”

“When brands are considered trustworthy, consumers are more likely to buy first, stay loyal, advocate for, and defend the brand.” But just what does it take to find that loyal customer?

The Generous Consumer

In the increasingly digital economy of today, customers have never had such ease of access to both make their voices heard and to directly reach corporate managers. Even still, finding out who exactly these consumers are is essential to cause-related marketing. As such, the researchers conducted a survey evaluating what attributes seemed conducive to the generous consumer. And in order to do so, they begin with pro-social behaviors. Think of pro-social behaviors as a sort of new age, social justice-incarnation of Jeff Foxworthy stand-up comedy. If you advocate for consuming goods in a socially conscious fashion, you might be displaying a pro-social behavior. The researchers define four different pro-social behaviors:

1. Social responsibility, which boils down to the idea of making decisions “based on a desire to minimize or eliminate harmful effects while maximizing societal impact.”
2. Empathy, relating individual experiences and displaying sensitivity to respective experiences.
3. Moral reasoning, arguably the most philosophical of pro-social behaviors, it “arises when individuals see into the complexity of a situation, steadfastly consider all of the possibilities, and analyze the impact of each possible action with respect to the moral outcomes.”
4. Past helpfulness, or self-report altruism, a history of selflessness, for example volunteering at a community center or philanthropy.

The researchers related these pro-social behaviors with interpersonal generosity, “which measures the degree to which individuals attempt to enhance the well-being of others by spending their attention, time, emotion, and energy.” Interpersonal generosity, in other words, is just what it sounds like: generosity. And such generosity can be greatly effective for businesses, particularly in terms of the “Big 3” donations: cash, volunteering, and civic engagement. “Interestingly,” the researchers write, “when individuals participate in pro-social behaviors, they are more likely to engage in future pro-social behaviors, perhaps because these costly forms of helping make a person see oneself as having a pro-social identity.”

All’s Well That Ends Altruistically

In their survey, the researchers asked four hundred respondents questions regarding their appeal to cause-related marketing, social responsibility, and interpersonal generosity. “Our research centered on three themes,” they write, “1) an increased interest in cause-related marketing initiatives in the marketplace reinforces the importance of studying the precedents of such activity, 2) pro-social behaviors help to explain why cause-related marketing activity resonates with consumers, and 3) a focus on interpersonal generosity unlocks theoretical insight and market opportunity.”

Their findings may come as a surprise: while notions of social responsibility and empathic concern can significantly impact cause-related purchase intentions, moral reasoning and past helpfulness are not related to purchase intentions. The researchers, however, dug a little deeper into that concept of interpersonal generosity. And it’s that concept of generosity that seems to hit the bull’s eye in cause-related marketing. All four pro-social behaviors (social responsibility, empathy, moral reasoning, and past helpfulness) are positively and significantly related to interpersonal generosity.

“Our findings imply that the more socially responsible, the more empathetic, the more moral and more helpful a consumer is, the more generous they tend to be,” the researchers posit. “Further, it is the generous consumer who helps us best understand why someone may be willing to purchase cause-related products.”

So, what can managers do to make the most of cause-related marketing? One key aspect is to treat cause-focused shoppers as a psychographic rather than a demographic. In other words, consider these shoppers as pertaining to a specific lifestyle, not bound to age, race, or gender. Many marketers associate cause-focused shoppers with millennials, and while millennials may overall advocate for social justice than prior generations, they certainly are not the only demographic to believe in social justice. In fact, “more recent research finds that motivations of pro-social behaviors vary minimally based on age or gender.” Tailoring your marketing so narrowly is missing out on plenty of other cause-focused shoppers. Instead, consider the generous shopper, and you may just reap the rewards of your philanthropy.