[Press Release] CRM Must be Transparent and Ethical
Cause-Related Marketing (CRM) campaigns and donations through marketing channels are one of the most effective strategies in promoting philanthropy. Various social programs can be promoted and financed through the CRM mechanism. CRM can also be an effective marketing strategy for companies in improving their image and product sales. However, if not conducted ethically and transparently, CRM can adversely affect product and company image and render people apathetic and reluctant to contribute.
The role of CRM in philanthropic activity was discussed in the 11th Philanthropy Learning Forum held on Thursday 17th of November at the Philanthropy Building, Jakarta. The Forum was attended by philanthropic activists and hosted four speakers, namely M. Gunawan Alief (Head of Indonesia CSR Society), Maria Dwianto (Head of Corporate Communications of PT Unilever Indonesia Tbk), Yuli Pujihardi (President Director of Dompet Dhuafa Social Enterprise) and Hamid Abidin (Director of Philanthropy Indonesia).
CRM (Cause-related Marketing) is a commercial activity in which businesses and social institutions form partnerships through the utilization of specific marketing strategies to support a social issue or program. CRM is one way that companies show their concern, and contribute to issues that occur in the community through the company's operation, schemes and marketing channels. CRM is generally manifested through the provision of a certain amount of profit from a given product to be channelled towards a particular program or problem. The tools and schemes that companies use in conducting CRM, however, are continuing to grow, evolve and diversify. In addition to donation-buying, there is also the sale of certain products, the buy one give one scheme, the rounding of the transaction value etc. The allowance scheme, for example, is used to raise public awareness by supermarket managers and supermarkets.
Yuli Pujihardi, President Director of Dompet Dhuafa Corpora, stated that CRM helps social institutions in campaigning and raising community donations. Dompet Dhuafa is an institution that partners with many companies who employ CRM schemes. "CRM provides opportunities for companies to make donations not in the form of funds or donations, but through the utilization of marketing strategies. This strategy is also preferred by both parties because it has mutual benefits" he stated. Meanwhile, Director of Philanthropy Indonesia Hamid Abidin highlighted the instances of CRM which can be considered less transparent and unethical. He explained that many consumers complain because they cannot get adequate explanations regarding the specifics of programs. Some consumers also complain about the way a program is implemented. In addition, they also question whether the company is transparent in reporting the results of donations at the end of the program. Others question the ethics of companies that do not acknowledge and appreciate consumer contributions in CRM and promote it as a corporate social program. According to Hamid, CRM consumer concerns need to be considered and solutions sought so as to not impact on corporate and community philanthropy activities conducted through CRM. "If it is allowed to drag on, it could lower the company's interest in engaging in philanthropic activities through CRM for fear of public backlash. The company also has the responsibility to ensure consumers do not become apathetic and hesitate to contribute through the CRM scheme for fear donations are not up or misused " he said.
To safeguard consumer trust and avoid infringement, the company needs to pay attention, and adhere, to the various standards and regulations governing the raising of donations. Ethical issues can also be avoided if the company understands how the code of ethics relates to carrying out philanthropy activities, the Indonesian Philanthropic Ethics Standard is particularly important. Companies should also pay attention to the various complaints and inputs of the community and use them as a reference for improving CRM programs. "For example, providing complete information, improving the method of offering the program, as well as delivering the program report completely and openly," he explained.
Companies also need to recognize and reward consumers as program donors by clearly naming their promotions and publication of donation programs. Companies may not claim the program as a company's social program. The utilization of donations in the areas in which the donations were raised should also be considered. Social funds collected from different regions are sometimes carried and channelled through to the corporate headquarters’ area, while the areas where the raising was conducted may also have social programs that require financial assistance. In addition, social organizations that become partners of the company must also participate in maintaining and assisting the CRM program, and ensuring it is carried out transparently, ethically and effectively.