On November 17, 2016 Indonesia Philanthropy Association held the 11th Philanthropy Learning Forum (PLF), in collaboration with Dompet Dhuafa one of the members of the Association. The PLF was held in the Philanthropy Building, Dompet Dhuafa, with the theme “Cause-Related Marketing: Its Role and Problems in the Development of Philanthropy”. The discussion was moderated by M. Thoriq Helmi with four speakers present: M Gunawan Alief who is the chairman of Indonesia CSR Society, Maria Dewantini Dwianto or Mia, Head of Corporate Communications of PT Unilever Indonesia Tbk, Yuli Pujihardi, the President of Dompet Dhuafa Corpora, and Hamid Abidin, the Executive Director of Philanthropy Indonesia.
One of the strategies of Cause-Related Marketing (CRM) is setting aside a small percentage from the costumer’s total spending which they then donate it to a certain cause. Gunawan Alif said that CRM program started in 1983, in the United States. At that time, American Express committed to set aside $1 from every new credit card application. Later the money collected was used for the reconstruction of the Statue of Liberty.
Using CRM can be a creative and cost-effective approach to marketing. Donations made through CRM programs can also act to improve the company’s reputation. Consumer perceptions of corporate social responsibility can affect their confidence regarding the brand. This confidence can certainly increase sales of products. Gunawan also posited that some companies selling premium products use CRM because they feel guilty.
The second panelist, Mia from Unilever, explained that Unilever products are often marketed using CRM. For Unilever, CRM is not just aiming to increase sales but it is also a 360° business strategy. Through its CRM programs, Unilever does not only want to improve in their business but also to lower the environmental impact; while simultaneously educating the public in how to lead healthier lifestyles.
Yuli Pujihardi from Dompet Dhuafa stated that, based on the research by PIRAC, consumers were more likely to buy a product sold using CRM techniques if the purpose of the program was for education, economic development, health, sanitation and water supply, disaster, or famine. Companies, social organizations, and the public accept that CRM has mostly good intentions but that it can also give rise to various problems.
Hamid Abidin explained these problems further, offering many examples of poor implementation. problems included a lack of licensing, information from companies that is minimal or incomplete, the “special” offer being imprecise and feeling forced, little to no financial statements available for consumers to view, the program period not being clear, centralized use of donations, and little to no recognition and appreciation for customer donations. Hamid also reminds that companies who run CRM programs should be aware of regulations and guided by the relevant laws such as Law No. 9/1961 on Collecting Money and goods, and that they should also take into considerations the rights of donors or contributors.