- Tamara Pope's St rategic corporate partnerships are raising both awareness and funds for the area's hospitals.
- Acura of Hamilton GM Louis Iaquinto donates $200 for every new car lease or sale, which is a winning formula for both his customers and HHS.
- Companies can significantly enhance their image by affiliating themselves with charities or other worthy causes, notes Rotman Sc hool of Business professor Dilip Soman.
Marketing with a cause
Linking business and charity is paying off for Hamilton Health Sciences
Tamara Pope had a goal. In 2010, when she joined Hamilton Health Sciences Foundation as the organization's new vicepresident of marketing and communications, Pope was instructed to make more corporate connections for the charitable organization that raises money for the city's various hospitals. Foundations like the Hamilton Health Sciences have long relied on annual donations by supporters and larger gifts from estates and philanthropists. Finding new outlets for funds is increasingly difficult, but Pope's goal was to tap into what is referred to as "cause marketing," a concept that links private businesses with charities.
"If it worked, it was a win-win for us—greater awareness and an alternate fundraising scheme," says Pope.
Two years into the program, there have been some missteps and instances where the concept didn't work. But more often than not, the Hamilton Health Sciences Foundation is creating a connection to local businesses that works for both the partners and the charitable organization. The businesses benefit from increased exposure as well as consumer perception that they are involved in the community. For the charity, it is an opportunity to raise awareness of its cause and tap into new funding.
"A lot of people make the connection between the charity and the company involved," says Dilip Soman, a business professor at Rotman School of Business in Toronto. "There can be huge benefits for the business's image and downstream revenue opportunities because consumers will often make selections of who they do business with based on how they perceive a company."
"It is really a three-way benefit," explains Pope. "The corporate partner benefits because the customer sees them as a link to a cause that is important; the charitable organization benefits from the fundraising; and then you benefit from the branding as another means of getting out your message."
Driving the message home
Since taking the helm as general manager of Acura of Hamilton, Louis Iaquinto has wanted his company to be able to give back. "I immediately set to work on trying to find a partnership that would allow me to support a local cause on behalf of our clients and staff," Iaquinto recalls.
The question was, which charity and how would the dealership interact with that cause?
It didn't take long for Iaquinto to focus on Hamilton's hospital network. "Many of our staff members have had family and friends who have benefited from the care at both Mac Kids and Juravinski. We are located very close to McMaster Children's Hospital and felt a connection to many of the hospital and university staff, as a considerable number of our clientele are involved with those institutions, as well as other areas of HHS.
Iaquinto, though, was uncertain of how the relationship with the hospitals' charitable foundation would move forward. He initially approached Pope about potentially backing specific fundraising events. It didn't take long for Pope to recognize that Acura of Hamilton would be a perfect fit for her new strategy.
"Given that we are a regional centre, it makes sense to work with regional businesses because we are providing health care to them or their friends because they have a connection to us," Pope explains. "Acura of Hamilton got it from day one and you can't go into their showroom without knowing their engagement with us."
Pope explained to the Acura dealership that perhaps a deeper and more connected relationship between the business and the foundation would be more beneficial for both parties over the long term. Iaquinto couldn't have agreed more. Eventually Acura decided that a regular contribution—in this instance $200 from every sale or lease of a new vehicle—would be made in the name of the customer. It was exactly the kind of arrangement Pope was hoping for, and in return Acura had the opportunity to display a vehicle at one of the hospitals and use the foundation's brand in its marketing.
"Rather than providing our customers with a gift to thank them for their purchase, we thought it would be a more significant gesture to make a donation on their behalf, which, when accumulated, would also make a significant impact within Hamilton Health Sciences," Iaquinto explains. "HHS is an extremely important part of the Hamilton community, and most of our clients have either benefited from their programs or know someone who has, so I thought they'd be pleased by the opportunity to have their purchase have an impact on their health care system. Of course, HHS has been kind enough to spread the word of our donations in an effort to assist us. We're grateful for the exposure the partnership has provided us."
In the ultra-competitive world of new car sales, where margins are tight, one might question a dealership making a donation for every new car driven off the lot. But both Pope and Soman agree that these kinds of arrangements can reap huge benefits for a company's exposure and brand.
"The customer recognizes a portion of what they are paying comes back to a charity," Pope says. "And if the consumer has a choice between a company involved with a charity, they will likely go with that company. It is creating a shift."
Charitable foundations should seek longer-term commitments from the businesses they partner with, Soman adds, noting that corporate interests must align with the charity. For instance, many companies are focused on short-term gains. If a deal with a charity doesn't work out in a few months or a year, some companies will withdraw from the arrangement.
However, Soman says other companies have more expansive perspectives and are willing to invest in a charitable cause that may not produce revenue for years. He cited the example of multi-conglomerate ITC, a company that sold agricultural products in India. The company struggled to make undereducated consumers understand its products, so it invested in computers for rural towns. ITC employees would teach the villagers to use the computers and gain a better understanding of agricultural products, which benefited the people of the towns. The company hoped, in return, the villagers would buy more of its products, making the investment a win for everyone involved. But it was a long-term perspective, Soman admits.
"The company's goals have to match the charity's in terms of time horizons," Soman says. "And consistency is important to any partnership. Neither side can be opportunistic or be perceived that way or people will see through it.
"And finding businesses that naturally link with a charity is central, Soman says. That was the case with the foundation's other deal, this one with Bayshore Home Health, a company that operates nationally, but has long had a connection to the community of Hamilton. Bayshore, which provides home-based nursing support and companionship, wanted to provide greater visibility for its services throughout Hamilton's health network. Bayshore approached Pope about becoming involved with the foundation in return for added exposure in the hospitals. However, Pope wasn't initially certain of how the relationship would work—especially since it would have to be structured differently than the arrangement with Acura.
Bayshore's Keena Naik, the company's corporate development manager, says the business had worked out a similar arrangement with another Canadian hospital and hoped to utilize the model in Hamilton.
"We don't have goods we sell—we provide services—so that offers a certain challenge," she says.
Bayshore proposed a branding initiative that would allow the business to create a package for patients to take home that would include support information, as well as some specific items they would need when they left the hospital. In return, Bayshore would make a donation to the Hamilton Health Sciences Foundation.
The program started in January and Bayshore has already seen increased exposure, though company officials say it is too early to tell what impact it will have on their business year over- year.
"There's definitely more awareness of what we offer," Naik says. "And people are also finding what we've offered to be useful, so it has really worked well."
While both arrangements with Bayshore and Acura have proven successful to date, Soman says charities have to be careful about the businesses they do these branding and marketing initiatives with. After all, he points out, the company benefits from the brand exposure, but if there's a problem, it can reflect badly on the charity in question. Pope admits some early arrangements linking the foundation to local businesses didn't work out because the fit wasn't right, and the companies in question couldn't determine the best way to integrate their interaction with Hamilton Health Sciences.
"Sometimes when you have the conversation with the partner there are different expectations of the partner," she says. "Some see it as just a charitable donation. But for it to work, it has to become an integral part of their marketing. If they just dismiss it as a charitable work, it will fail."
Acura of Hamilton is pleased with the results of its foray into the space, and Iaquinto acknowledges that having a 2012 Acura TL in McMaster Children's Hospital has driven traffic into the dealership. Sales staff at the dealership have seen more prospective customers from both hospital employees and those using the medical facilities.
Why don't more companies enter into the cause marketing space? Pope thinks in a lot of instances charities simply haven't approached them. "A lot of charitable organizations don't have marketing expertise," says Pope. "That's not to say they don't do a good job, but their mandate is to reach out one-on-one, while mine is to approach things from a marketing mindset."
To that end, Pope is eyeing new corporate connections, and sees grocery chains in Hamilton as businesses that could benefit from cause marketing.
Rotman's Soman says companies can become humanized through such relationships. Though it is hard to put a dollar value on it, he says consumer perception can be changed by a well-considered charity campaign. He points to CIBC's Run for the Cure in support of breast cancer as an example of cause marketing that has done wonders for the perception of the bank. Pope adds that it can even benefit a company's ability to connect with its staff.
"It's another way for their employees to be involved and it has been used for retention. Employees will stay with companies they feel good about—we are seeing it from all of our partners."
A good partner fit isn't always obvious. The day of our interview, Pope was heading to Assured Automotive, a Hamilton-based business that does bodywork for damaged cars, for a presentation introducing the company as the latest cause marketing partner for Hamilton Health Sciences. She admits she didn't see the connection immediately, but became convinced the more she spoke with the business.
"They felt very strongly about Mac Kids, and they have a strong reputation in the industry as being honest and putting their customer first," she says. "And they are trying to expand their market. It opens up a different market and channel, and increases our exposure to them and their insurance partners." And while a deal with a collision repair service will never be a traditional means of fundraising, Pope says the new strategy is yielding significant benefits.
"Nothing is going to replace the major gift or annual giving," she says. "But we do have targets to hit with this program and what comes with that is selecting the right partner. It certainly is another important way of generating revenue."