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New York-based eye wear company Warby Parker distributes one pair of free glasses to a person in need for every pair sold.
New York-based eye wear company Warby Parker distributes one pair of free glasses to a person in need for every pair sold.

When philanthropy's part of the business model, marketing takes care of itself Add to ...

In Creole, the word “kore” means anchor, or support. When used as a greeting, it connotes respect, and can be translated roughly as “I’ve got your back.”

For a company getting ready to expand into Canada, the word represents the anchor of its marketing strategy as well. Sir Richard’s is a condom brand, built on a giving model; for every condom it sells, it gives one away – under its kore brand, which launched last year in Haiti, where there is a shortage.

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The Boulder, Colo.-based company is counting on this type of cause marketing to build kore (pronounced “kor-ay”) when it launches in Canada later this year, the way it has already done in the United States. “It’s baking into the company a social impact – which we all want to see out of capitalism today,” CEO Jim Moscou said. “Young people want to see a reflection of themselves in the companies they engage with. That’s transparency.”

In latching on to that trend, Sir Richard’s joins other companies that are baking philanthropy right into their business model, instead of using it as a marketing tool. In doing so, they’re finding that the marketing takes care of itself.

One of the most famous examples is Los Angeles-based Toms Shoes, which has built a fast-growing fashion brand on its “One for One” message. The simple, easy-to-understand premise was tailor-made for PR success: Children in Argentina needed shoes to go to school, so founder Blake Mycoskie decided in 2006 to start a company that would give a pair of shoes away for every pair it sold. This was the most powerful marketing tool he had when he persuaded the first buyer for a boutique to stock the product.

“She liked the shoe, but she loved the story,” Mr. Mycoskie recounted in a presentation this week to the C2MTL conference in Montreal. She was not the only one: the Los Angeles Times picked it up, as did many others, including Vogue. The company sold 10,000 pairs in the first summer, and millions more since. “People weren’t buying shoes; they were buying the one-for-one promise,” Mr. Mycoskie said. The model was so successful that Toms extended it to a line of sunglasses, and is currently working on developing other products using the one-for-one model.

Toms has never had to do traditional advertising, he said. That translates into major savings. “Giving doesn’t just feel good; it’s actually a really good business strategy.”

New York-based eye wear company Warby Parker also works on this one-for-one model, distributing one pair of free glasses to a person in need for every pair sold. It also partners with organizations that train low-income people to launch their own small businesses selling glasses. The company says it has given away more than 250,000 pairs of glasses since launching in 2010.

The trend is part of a generational shift in consumers’ expectations: Millennials (a buzzword to describe young people currently aged 18 to 32) attach more importance to a company being tied to a cause than any other group, according to a 2011 report by Service Management Group, Boston Consulting Group, and Barkley. More than half of those surveyed said they actively try to buy from brands that support worthy causes.

And more people believe it’s simply not good enough for companies to have a cause they support through corporate social responsibility initiatives. Nearly half of consumers globally feel those causes have to be tied into the business itself, according to the 2012 Edelman goodpurpose consumer study. That statistic is reflected in Canada as well: Edelman’s research found that 49 per cent of Canadians said that new products or services should be created that help address a need. The 2011 Cone Communications and Echo Global Corporate Responsibility Opportunity study found that, “when price and quality are about the same, 94 per cent of consumers are likely to switch brands to one associated with a good cause.”

Certainly, plenty of other brands over the years have advertised their philanthropic practices; often, in the past, this has been through a model of dedicating a percentage of profits toward a charity they believe in or want to be associated with.

However, for consumers the idea they can see a direct line between their purchase and a good cause is very powerful. There is great storytelling potential, too – the Toms website includes “giving stories,” and the Sir Richard’s website has a “condom tracker” that counts how many have been given away.

“When you incorporate giving into your business, your customers become your greatest marketers,” Mr. Mycoskie said.

“Young people are expecting more out of their products,” Sir Richard’s Mr. Moscou said. Buyers understand that as well; it was picked up by Whole Foods, and was sold in its stores coast to coast in the first year. It is on the verge of announcing two more major retail partnerships in the U.S., and expanded to Britain in December, in Whole Foods and in Selfridges stores.

There is another element at play. Part of the transparency younger consumers crave also has to do with the marketing messages they see. In the category where Sir Richard’s wants to compete, there are a few dominant players, and their marketing tends to be either highly technical, features-based or medicinal, Mr. Moscou said, or has an infantile wink-wink approach to sex. The Trojan “ Fire and Ice ” commercials are a perfect example.

Sir Richard’s marketing, by contrast, has been deliberately provocative. A working title for the brand had been Woody’s, but the company opted instead to name it after Sir Richard Burton, the English explorer who translated the Kama Sutra for publication in English. It created a holiday – Birth Control Day – encouraging people to send notes to their partners celebrating the choice not to have kids. The messages, built for online sharing, included “Let’s swap numbers, not gene pools” and “Let’s stay up all night by choice, not necessity.”

While these jokes may not seem immediately connected to a philanthropic message, it’s all part of the same conversation around marketing transparency, which makes these business models so effective, Mr. Moscou said.

“If we can develop a brand that’s culturally relevant, we can increase usage,” he said. “Young people are being advertised to more than any generation ever. It’s not that they’re against advertising or product development, they just want to see it done right.”

The question for companies built on a one-for-one model will be how far it can go; part of the power of Toms and brands like it was the novelty of the story. If it becomes as de rigeur as other corporate philanthropic initiatives, and part of that torrent of advertising noise, marketers will have to fight against consumer fatigue to encourage them to keep passing the story on.

Follow on Twitter: @susinsky

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