Introduction

People consider good business ethics and corporate social performance not only as a business obligation to society, but also as a measurement or assessment tool that will guide people in their purchase decisions (Aguilera et al. 2007; McWilliams and Siegel 2001). Cause-related marketing (CRM) strategies focus on how firms should design their corporate social responsibility (CSR) and related strategies and how they should communicate the associated social performance in ways that will enhance a firm’s reputation among its key stakeholders (Liston-Heyes and Liu 2010; Liu and Ko 2011a). Over the past few decades, studies have acknowledged the role of cause-related marketing in capitalising a firm’s social performance and business ethics in ways that enhance its reputation, thereby improving its long-run profitability and sustainability (Adkins 1999; Liu and Ko 2011a; Pracejus and Olsen 2004; Varadarajan and Menon 1988).

Despite the increasingly popular practices of and researches on CRM, little work has been done to produce a clear picture of the nature of CRM and the related approaches to designing a CRM campaign. Two important, interrelated knowledge gaps in the CRM literature can be identified. First, in order to further our understanding of the goals of CRM in the participating companies and the measurement of the programme’s successes, Gupta and Pirsch (2006), and several others (e.g. Svensson and Wood 2011; Webb and Mohr 1998), have called for expended definitions and research domains for CRM. Although CRM has been widely discussed in the literature with regard to various academic disciplines, however, its definitions and descriptions vary considerably. There remains a lack of agreement about what CRM is. This research addresses this issue by first consulting a board range of CRM-related literature and then proposing two distinct logics of CRM: instrumental dominant logic and relational dominant logic (in terms of its rationale, marketing target and strategic principle). Academics define “dominant logic” as a mind-set or rule of thumb that helps the decision-makers to make complex business decisions (Bettis and Prahalad 1995; Prahalad and Bettis 1986). Under instrumental dominant logic, managers consider CRM as a commercial marketing campaign and emphasise its use in influencing consumers’ purchase intentions. Under relational dominant logic, on the other hand, mangers regard CRM as a stakeholder relationship management strategy, focusing on its use in enhancing stakeholder relations through communicating the firm’s social performance. After providing explanations about how these two CRM logics emerge from the CRM-related literature, this paper introduces and discusses four types of CRM based on extreme values of the instrumental and relational dominant logic of CRM and proposes definitions of each type: altruistic, commercial, social and integrative, with the purpose of expanding the definition of CRM.

Second, once firms have recognized that there are different types of CRM for different purposes, they should further explore how CRM strategies are developed for each of these types. Attempts have been made to address this knowledge gap (Maignan and Ferrell 2004; Murray and Montanari 1986; Van de Ven 2008); however, they all adopt the perspective of the role of marketing in CSR, and none provide comprehensive suggestions about dealing with the marketing decisions that firms face when designing a CRM campaign. For example, Garriga and Melé (2004) identified the role that CRM played in the broader CSR agenda, in which the firm can implement marketing activities by highlighting its association with socially responsible acts in order to improve its reputation and promote product differentiation. However, the concerns about what specific marketing decisions the firm is attempting to make in different situations remain unclear. To address this knowledge gap in the literature, in this study, this research uses the qualitative method to explore a firm’s marketing decision in terms of the marketing decision dimensions—campaign duration, geographical scope, cause selection and implementation strategy—for each type of CRM.

In addressing these two important, interrelated knowledge gaps in the literature, this research contributes to the literature on CRM, stakeholder relationship management and strategic CSR. First, this study contributes to CRM research by being the first article to introduce the two logics of CRM, employ them to expand the definition of CRM and provide further connections to relevant marketing decisions with regard to the different types of CRM. By highlighting the dual foci of the instrumental and relational aspects of CRM, this research suggests that, in addition to instrumental dominant logic, CRM strategy can also be developed using relational dominant logic, and further reveals the different types of CRM based on the interaction between these two perspectives. Through qualitative research, the research explores how the firm makes different marketing decisions relating to the different types of CRM. Second, this research also contributes to the literature on stakeholder relationship management from the perspective of CRM. Our research argues that CRM can be used to manage the stakeholder relationship through communicating the firm’s social performance to the target stakeholder groups in order to shape their opinions about the firm, and establish an improved reputation that will eventually lead to the enhancement of the firm’s legitimacy. Finally, our research contributes to the literature on CSR. This paper argues that the firm sets up CRM tactics that fit within an overall CSR strategy that works for it. In this sense, a firm can become more proactive and tactical about their strategic giving activities. In terms of practical insights, the findings of this study can also be used to guide a firm’s managers, nonprofit managers, and public policy makers to manage the CRM activities and design an incentive system to encourage corporate citizenship acts.

Perspectives of Cause-Related Marketing: Instrumental Versus Relational

The concept of CRM is not only widely discussed in the marketing discipline but also in a broader range of management literature, such as accounting, corporate social responsibility, human resource management and strategy. In the marketing literature, particularly with regard to the advertising and consumer behaviour disciplines, CRM actions have often been described as societal marketing (Drumwright 1996; Hoeffler and Keller 2002) or revenue producing transactions (Pracejus and Olsen 2004; Varadarajan and Menon 1988) that incorporate a firm’s social performance into a firm’s brand building and promotion activities with the intention of improving the brand awareness, business reputation, customer satisfaction and sales (Barone et al. 2000; Luo and Bhattacharya 2006; Polonsky and Speed 2001; Sen and Bhattacharya 2001). In the accounting discipline, the acts of CRM mostly reflect the activities of corporate social and environmental reporting (Deegan et al. 2002; Lewis and Unerman 1999) or sustainability accounting (Unerman and Bebbington 2007), which disclose the firm’s ethical, social and environmental practices through official public reports (i.e. annual reports) mainly to the investors and other interest groups (i.e. environmental lobbies) to demonstrate corporate accountability (Gray 1992; Gray et al. 1995; Unerman 2000). In the field of CSR, CRM actions usually refer to social investment (Bronn and Vrioni 2001; Mohr et al. 2001) or strategic philanthropy (File and Prince 1998; McAlister and Ferrell 2002; Porter and Kramer 2002), which highlights the firm’s business objectives when designing charitable giving tactics and considers CSR-related expenditure as investment. In terms of human resources management, CRM acts are frequently co-aligned with a firm’s internal marketing strategy (Liu et al. 2010), which communicates a firm’s social performance internally to its employees and aims to achieve the human resource management objectives, such as attracting, motivating and sustaining valuable employees (Peloza and Hassay 2006; Peloza et al. 2009; Peterson 2004). Finally, in the strategy subject area, CRM acts are commonly linked with strategic alliance (or social alliance) (Berger et al. 2004; Liu and Ko 2011a), which emphasises the strategic benefits gained when the firm collaborates with a cause in an alliance format in which both parties can benefit by accessing each other’s resources (Lafferty and Goldsmith 2005; Liu and Ko 2011b; Till and Nowak 2000).

To put it briefly, CRM acts are very diverse and attempt to influence the behaviour of different audiences who are important to the firm and interested in learning about its behaviour with regard to social initiatives (i.e. social and environmental reporting—investors; internal marketing communication—employees). These audiences whom the firm attempts to address through its CRM campaign fit the profile of Freeman (1984)’s definition of the firm’s stakeholder group. Freeman (1984, p. 46) defines stakeholders as “…all of those groups and individuals that can affect, or are affected by, the accomplishment of organizational purpose”. Moreover, Clarkson (1995) suggests that a firm should pay attention to satisfying its stakeholders; otherwise it cannot survive. This implies that the firm needs to seek “approval” from its stakeholders in order to operate continuously and use CRM as a tool to communicate with its stakeholders. For the purpose of discussion, this paper distinguishes two groups of stakeholder—customers and non-customers—by adopting Smith et al. (2010, p. 4)’s description of a customer as “a commercial entity seeking to satisfy short-term, material needs through consumption behaviours”, and a non-customer stakeholder (referred to as a “stakeholder” hereafter) as an individual who is “concerned about a firm’s social and environmental impacts”. Further concurring with Smith et al. (2010, p. 4)’s arguments, this paper also recognizes that customers will wear the stakeholder’s hat when they play the role of “a citizen, a parent, an employee, a community member, or a member of a global village with a long-term stake in the future of the planet” (Jocz and Quelch 2008; Pirsch et al. 2007).

This research proposes two distinct logics of designing and managing a CRM campaign—instrumental and relational—based on the assumption that the firms’ have different goals in communicating with these two distinctive audiences using CRM campaigns. A CRM campaign that targets customers tends to emphasis more the use of CRM to generate revenue by influencing customers’ purchase behaviours regarding firms’ products or services. On the other hand, a CRM campaign that places greater focus on communicating with stakeholders tends to focus more on using CRM to communicate a firm’s social performance in order to meet their expectations on how firms ought to be. The following sections provide further discussion on this issue (see Tables 1, 2, 3, 4 and 5).

Table 1 Instrumental dominant logic versus relational dominant logic
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Table 2 Campaign duration
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Table 3 Geographical scope
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Table 4 Cause selection
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Table 5 Implementation strategy
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Instrumental Dominant Logic

The instrumental dominant logic of CRM is developed from the strategic CSR concept, which is inherited from instrumental stakeholder theory. Donaldson and Preston (1995) suggest that CSR strategy can be used to make a connection between stakeholder approaches and commonly desired objectives (instrumental stakeholder theory) to create a ‘better than the rivals’ approach, resulting in improved financial and market performance. Researches reveal that there is a positive relationship between corporate social performance and corporate business performance (Barnett 2007; Orlitzky et al. 2003). In a sense, from the perspective of the instrumental dominant logic of CRM, only the economic interactions between business and society are considered. Managers view CRM as a type of commercial marketing strategy that helps firms to generate revenue by attracting customers. Sen and Morwitz (1996) point out that customers’ perceptions of a firm’s position regarding certain social issues can affect their buying decision with regard to the products that the firm provides (includes services). Each social issue provides a different frame of reference from the customers’ point of view. CRM, in this sense, is the process of adding social references to a firm’s position on social issues. More specifically, CRM has been used as an instrument to engage customers. Thus, the instrumental dominant logic of CRM focuses on the psychological responses that consumers make to the CRM stimulus from the environment.

Studies show that consumer motivation regarding purchasing a product from a firm that is associated with a social cause is based on two emotional states: pain (guilt) and pleasure (Barone et al. 2000). The emotional state of pain (guilt) causes an uncomfortable feeling amongst customers when the buy a product (especially a luxury one), that may be alleviated by the fact that they can benefit some disadvantaged group by contributing a small amount of money. A classic example of CRM, designed mainly using the instrumental dominant logic of CRM, is the American Express Corporation and its “Preservation of the Statue of Liberty and Ellis Island” programme in 1983 (AMX 2010). In this CRM programme, the company donated a cent for every credit card transaction and a dollar for every new account opened to the fund the repairs of the Statue of Liberty and Ellis Island. This raised a total of $1.7 million. However, to make the customers aware of this arrangement, the firm spent $6 million promoting this programme (Berglind and Nakata 2005). The company constructed a positive brand by donating to the Statue of Liberty and Ellis Island repair fund with the intention of reaching more customers. It also triggered the customers’ two emotional states: guilt—spending on luxury products using a credit card—and pleasure—donating money to a worthwhile cause. Strahilevitz and Myers (1998) suggest that CRM is more effective in promoting luxury products than necessities because of this guilt factor. On the other hand, the emotional state of pleasure is caused by experiencing a joyful feeling due to helping a social cause (Bendapudi et al. 1996). A successful instrumental approach to a CRM campaign is designed to trigger one or both of these emotional states in order to enhance the helping behaviour of customers towards the social cause while, at the same time, benefiting the business practice. In other words, the underlying principle in designing a CRM campaign under instrumental dominant logic is to find the “perfect” cause that can generate the strongest response from the customers. This campaign design is referred to as the “brand-cause fit”. The “fit”, here, refers to the compatibility between the consumer attitudes towards the cause and the brand, respectively (Lafferty et al. 2004). For example, British Telecommunications (BT), working with ChildLine (which merged with the NSPCC in 2006), launched the “Am I Listening?” campaign in 2002 (BT 2004). Given that ChildLine is a 24-h helpline for children and young people in the UK, it had a symbolic linkage with BT’s business (a world-leading provider of communications solutions), and so this raised strong awareness of the company in the marketplace (BT 2004).

Relational Dominant Logic

The relational dominant logic of CRM establishes CRM as a legitimization tool that is capable of enhancing organizational legitimacy and establishing reliable relationships with stakeholders. CRM, from this perspective, is a type of stakeholder relationship management strategy, operating under a wider agenda of a firm’s initiative strategy. In the process of establishing its business, a firm employs many resources from society. Therefore, many argue that firms have a social responsibility towards that society (Clarkson 1995; Matten and Crane 2005). Even well-established firms have faced dilemmas arising from their diverse market and societal relationships. These dilemmas are caused by the conflicting expectations of society regarding how a firm should act. Advances in communication technology and the rise of interest groups have made social and environmental issues more visible. Campbell et al. (2003) state that firms “need” to confirm to certain expectations imposed by society in order to enjoy continued access to products and resources. In this case, a firm agrees to perform various social initiatives in return for the approval of its objectives, other rewards, and its ultimate survival. The groups of people who impose these social and environmental expectations on the firm are often referred to as its stakeholders. When a firm pays attention to satisfying its stakeholders’ expectations, it is said to be acting “legitimately”.

Legitimacy can be viewed as an important organizational resource because it can lead to enhanced public trust in the business. The engagement of social initiatives has a powerful influence on organizational legitimacy. There is strong empirical evidence that a sound social performance improves a firm’s legitimacy (Liston-Heyes and Liu 2010). Legitimacy theory, as applied in the business context, postulates that organizations should act within a “boundary” (stakeholders’ expectations) that reflects the established and evolving new social norms (Suchman 1995). This “legitimacy” expectation is akin to a social contract, which regulates how both parties should perform and behave with regard to their various activities. This implies that firms need to honour this reciprocal agreement and understanding (social contract) imposed by its stakeholders. A good example of CRM, designed mainly using the relational dominant logic of CRM, is Nationwide and its “Nationwide Education” campaign. In this programme, Nationwide aims to train volunteers to deliver independent, impartial financial education within communities across the UK (Nationwide 2011), and to communicate its actions to its stakeholders through marketing (i.e. building a specific website, advertising). As a building society that provides a wide range of financial services and financial products, Nationwide’s act is designed to meet the stakeholders’ expectations about what a financial service firm should do. There has been a shift in emphasis in the relationship management view, due to a firm’s stakeholders being embedded within an interconnected network of relationships (Ferrell et al. 2010; Mish and Scammon 2010; Payne et al. 2005) and, in any kind of business transaction, people often receive benefits from market exchanges that go beyond the basic commercial benefits. This perspective of CRM, focusing on developing a CRM strategy to disseminate the performance of social initiative activities, that demonstrates that a firm is operating within the boundaries imposed by its stakeholders, and then developing long-term, trusting relationships with them (Liston-Heyes and Liu 2010), is referred to in this paper as the relational dominant logic of CRM.

Types of Cause-Related Marketing: Definition

Although both the instrumental and relational dominant logics of CRM represent different views regarding designing a CRM strategy, however, these two perspectives are not mutually exclusive. Almost all CRM campaigns contain ingredients of both logics of CRM but these vary with regard to their weighting. Therefore, this section presents a definition of four types of CRM that represent different combinations of the extreme values (high vs. low) of the instrumental and relational dominant logics of CRM (see Table 6).

Table 6 Types of cause-related marketing
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Altruistic Cause-Related Marketing

The combination of low-instrumental and low-relational logics of CRM creates altruistic CRM. The emergence of this type was largely due to the unintentional objective of either engaging in revenue generating activities or building stakeholder relationships. A typical altruistic CRM is initiated by a firm or even an individual employee that wants to do something good for the community (i.e. make donations) without ever thinking about the potential marketing benefits of their activities. Somehow, word about their activities spreads and attracts the media’s attention to expose their efforts. Subsequently, the firm gains marketing benefits from the activities as if it had conducted a planned CRM campaign in the first place and, on many occasions, continues to invest more resources in such activities, since it has enjoyed a positive outcome from them in the past. For example, Jack Welch, a former General Electric CEO, challenged the Elfun Society, a leadership recognition organization for General Electric managers, to revise its role in the 1980s and beyond since, at that time, the Elfun Society had become an organization that focused on volunteer and community services, which generated a highly positive social image for the company (GE-Elfun 2011; Jackson 1998). In this instance, General Electric did not intentionally plan to generate revenue or build stakeholder relationships through the redevelopment of the Elfun society. However, General Electric enjoyed positive marketing benefits from its activities and chose to continue using the Elfun society as one of its major social engagement arms to improve the firm’s brand image and reputation.

Commercial Cause-Related Marketing

The mixture of the high-instrumental and low-relational logics of CRM creates commercial CRM. The high need for an instrumental approach may be due primarily to the high demand for marketing results or a desire to improve the firm’s reputation within a short period. In the former, the firm wants to get immediate results (e.g. improved sales) from its CRM campaign, and so designs campaigns to attract customers and improve their purchase intentions (Kropp et al. 1999; Larson et al. 2008). For example, Innocent Drinks, whose primary business is producing premium smoothies and flavoured spring water, launched a six-week CRM campaign in 2007 whereby, for each woolly hat-wearing smoothie sold in Sainsbury’s stores and Eat Cafes nationwide, Innocent donated 50 pence to Age Concern. The campaign significantly increased Innocent Drinks’ sales over the six-week period (Innocent-Drinks 2011). In the latter, the firm identified a well-recognized cause that can easily stimulate people’s emotions, and designed a CRM campaign to capture the benefits by providing support for the cause. For example, British Telecommunication collaborated with the Disasters Emergency Committee to set up a call centre that could respond immediately during natural disasters by providing immediate communication for aid agencies, the media and families, as well as raising funds for disaster relief, rebuilding, and rehabilitation, resulting in increased customer satisfaction and an enhanced reputation (BT 2011). In both cases, the approach of CRM is highly instrumental, which focuses primarily on enhancing the customers’ purchasing intention or improving their attitudes towards both the company and the brand.

Social Cause-Related Marketing

Social CRM pools the high-relational and low-instrumental logics of CRM. The organizing principal behind designing this type of CRM campaign is to emphasise its role in a firm’s stakeholder groups and aim to establish an enduring relationship with them. For example, the John Lewis Partnership launched several programmes in Newcastle-on-Tyne, UK, aiming to strength its relationship with the local community, including the Newcastle Community Liaison Programme, which aims to offer support to a disadvantaged neighbourhood and address the issues identified by its residents, It has timetabled a range of activities to help the local community to overcome barriers and take positive action to improve their lives (John Lewis 2010b), while the Fit for Our Future Programme focuses on developing existing and future employees in the Newcastle region (John Lewis 2010a). Using the above two programmes, the John Lewis Partnership strengthens its connection with the community members in the Newcastle region by demonstrating, through its community investment that it supports local causes. Although some people in the region will be influenced by the firm’s movements and choose to purchase products from the firm’s retail outlets, however, the purpose of these campaigns is primarily to improve the community’s (one of the firm’s stakeholder groups) relationship with it rather than influence people’s consumption decisions.

Integrative Cause-Related Marketing

The integrative CRM campaign processes both the high-instrumental and high-relational logics of CRM. The focus of the campaign is not only on influencing consumers’ purchase decisions but also on aiming to establish continuing consumers and stakeholder relationships. More specifically, the design of the CRM campaign should incorporate the demands of both the customers and stakeholders and aim to create value for both the firm and society (Mish and Scammon 2010; Wu and Hung 2007). For example, Tesco has given over £100 million worth of computer equipment to schools through its “Computer for Schools” CRM programme, which is operated on a voucher redemption basis, with customers receiving one voucher per every £10 spent in store (Tesco 2011). This CRM scheme allows Tesco to build relationships with the local community and schools, and to reward customer loyalty and improve customers’ purchase intentions when shopping at Tesco stores or choosing Tesco stores as their shopping destination (Adkins 1999; Van den Brink et al. 2006). This CRM campaign not only appeals to Tesco’s stakeholders (i.e. community members) through actively supporting the local community, but also attracts the attention of its customers to make purchases at Tesco stores. In other words, Tesco expanded its marketing boundary through its CRM campaign by incorporating both the consumers and stakeholders’ demands of the firm.

Research Methods

Up to this point, this paper has identified the four types CRM according to the interaction between the extreme values of the two logics of CRM perspective. Further, this paper seeks further to explore the firm’s marketing decision choices regarding campaign-related decisions in relation to these four types of CRM.

Research Approach

This study formed part of a wider project on UK CRM practices, based on a collection of 96 elite interviews (Female N = 55; Male N = 41; Age range = 38–63) conducted between September 2007 and October 2010 (see Appendix Table 8), that gathered the views of managers from both British firms and nonprofit organizations (NPOs) about the issues involved in CRM decision-making. The corporate representatives (N = 46) interviewed were from firms located in the UK and listed on the London Stock Exchange. The NPO (N = 50) was identified by the appearance of its name on the firm’s annual report as the firm’s CRM partner. Although the quantitative approach can help to discover the differences in the CRM behaviour of a business, however, it did not reveal anything about the business motives or decision-making process used when designing a CRM campaign (Maxwell 2005). Therefore, the author chose to adopt the qualitative inductive approach to explore CRM decision-making in greater depth. The research method chosen is the “elite interview”, which is often used to interview decision-makers who usually have a rich knowledge and the ability to execute or withdraw, as opposed to interviews with the mass population, thus enabling the researcher to understand how the decisions are made within the organization (Blumberg et al. 2005; Goldstein 2002).

Interview Questions and Processes

The interview questions provided a structure for each interview, but it was frequently necessary to explain and clarify some of the questions. The author first explained what CRM is using the four definitions of CRM (in Table 6) and provided some examples to drew the necessary links between CRM-related decisions and the interviewee’s personal experience of CRM campaigns, as described earlier by the interviewee. After the introduction, the author started to engage in detailed discussions with the interviewees regarding their experience of CRM. Each interview started with a question about the interviewee’s organizational role and the details of the CRM projects in which he or she had been involved recently. For each of the CRM projects, the author asks six sets of questions to guide the informants to explain their underlying motives and strategic concerns when making decisions (see Appendix Table 9). A total of 113 different CRM projects were discussed with both corporate and NPO representatives. The first three sets of questions concern the organization’s CRM practices, such as its business objectives and strategy. The latter three sets of questions are specifically designed to enable each of the interviewees to comment on specific CRM campaign decisions. For the corporate candidates, the questions focus on helping them to share their experience of CRM. For the NPO candidates, the questions focus on helping them to share their perceived corporate behaviour patterns in CRM, which they learnt or detected through cooperating with a firm.

Data Analysis

The majority of the interviews lasted between 60 and 80 min, and were recorded on an MP3 recorder. To gain a better understanding of the data, the research employed NVivo software to assist our data analysis. Earlier pilots did not suggest the existence of obvious response biases of any kind, although there was a marked preoccupation with confidentiality. The data analysis proceeded in three stages. The first stage involved transcribing all of the audio files into written form. The researcher checked the transcripts against notes taken during the interviews. There were no major discrepancies between the content, except for the editing and correction of the interview quotes. The second stage is the coding (NVivo software is used to assist the research). The author did not differentiate between the responses of the corporate and NPO representative (each project was discussed by both parties). The data analysis focuses on exploring the responses about each individual CRM campaign. It began by highlighting key passages in the transcripts for each of 113 CRM campaigns, and then proceeded with the open coding by assigning these quotes to categories with labels summarising the key characteristics of their contents (Strauss and Corbin 2008). The author then sorted all of the CRM campaigns into four groups that represent different types of CRM with regard to the campaign’s objectives, using the answers from the interviewees (altruistic N = 22; commercial N = 33; social N = 27; integrative N = 31).

Afterward, this paper categorises the critical themes (see Fig. 1) related to each four dimensions of marketing decision that have been used by previous marketing researches on firms’ CRM strategies: campaign duration, geographical scope, cause selection and CRM implementation strategy. There no additional dimension of the marketing decision regarding CRM has been identified from the data. Campaign duration, in this framework, refers to the timeframe of the CRM programme, which can also be seen as the length of the relationship between the firm and the cause. The issue of duration has been frequently discussed in the CRM literature (Mohr et al. 2001; Tangari et al. 2010). Strahilevitz (1999) proposed that CRM tactics could sometimes offer the short-term benefit of immediately boosting sales. The strength of using a temporary marketing programme is that it offers great flexibility with regard to corporate marketing tactics (Gupta 1988). In contrast, the benefits of a continuous marketing programme can highlight the brand association and increase consumer recall (Mela et al. 1997). The “geographical scope” of the programme refers to the “scope of reach” of the CRM message (Varadarajan and Menon 1988). This article refers the geographical scope of a CRM programme to either a universal or territorial approach. The universal approach refers to a firm engaging in a CRM campaign that delivers a universal message to its audiences in different locations. The territorial approach refers to a firm designing and delivering a regionally focused message to target the audiences in that region. Thirdly, cause selection is perhaps the most popular topic in the discussion of CRM (Hamiln and Wilson 2004; Trimble and Rifon 2006). Different causes represent a different set of values or associations that define the cause in terms of not only what it does but, more importantly, also the values that it represents. For example, Mendleson and Polonsky (1995) suggest that establishing a corporate-cause alliance with an environmental group is the most effective way to state a firm’s position on environmental issues. Finally, the implementation of a CRM strategy can take many forms. For example, sponsorship can enhance a firm’s image by associating the name of a sponsoring firm with a cause that is important to a particular target group (Meenaghan and Shipley 1999; Polonsky and Speed 2001). It offers effective product exposure and helps to target specific populations, including groups that are difficult to reach through more traditional forms of advertising, as well as providing general publicity for a firm through using carefully chosen, highly visible symbols and activities. The sales-promotion strategy refers to firms donating, to a designated charity, a portion of their profits obtained from each product sold. This product link to a charity may create a purchasing incentive for the target customers (Olsen et al. 2003; Pracejus and Olsen 2004). Donation-in-kind refers to a non-financial contribution to the improvement of a social cause, such as donating products or services (Dean 2003), providing corporate volunteers (Peloza and Hassay 2006), and donating or making improvements to facilities (Bronn and Vrioni 2001).

Fig. 1
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Marketing decisions

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Any particular theme that emerged during the analysis was transcribed in the margins and then labelled with descriptive codes. To verify the reliability of the sorting and coding, the author used Lok (2010) and Miles and Huberman (1999)’s suggested approach of asking a colleague to sort and code a random sample of 20 interviews (roughly 21 %) using the same approach. Dividing the number of coding agreements by the total number of coding agreements and disagreements suggested that there was a reliability rating of 98.5 %. Although a large number of new insights emerged from the study, the author focuses only on the key areas under consideration here. The last stage is the analysis, where the author makes connections between the interpretations of the interview answers and the parallel literature. The author moves back and forth between the theory and data, analysing and comparing the data with the existing theory, developing insights to support new theory, verifying that the new theory matches the data, and returning to the theory for further revision. Given the space limitation, here, I only provide brief summaries of the interview data collected under each of these themes.

Findings and Analysis

This phase of the research examines a firm’s choices regarding its marketing decisions for these four types of CRM. Fig. 1 illustrates how the managers’ statements regarding CRM campaign decisions are categorised for the different types of CRM.

Campaign Duration

Duration, here, refers to the timeframe of the CRM programme, which can also be seen as the length of the relationship between the firm and the cause (see Table 2).

In terms of altruistic CRM, 82 % of the respondents suggest that many of this type of CRM campaign start with a one-off donation from a firm to an NPO, then expand into the longer-term, cross-sector collaborations once the campaigns become successful (77 % of the respondents). The reason for this kind of behaviour is that the firm did not intend to launch a CRM campaign in the first place. Firms may randomly support a few local NPOs on a one-off basis as a way to demonstrate their involvement in community initiatives. Once the marketing value appears, the firm’s management team starts to consider the possibility of re-launching this scheme as a CRM campaign and developing a longer-term collaboration with the NPOs.

For commercial CRMs, the result shows that the firms’ managers are in favour of short-term-based CRM campaigns (70 % of the respondents) and prefer to change their NPO partner regularly (79 % of the respondents). This is because a short-term CRM programme enables firms to react quickly to market conditions. In order to achieve a short-term outcome using a CRM campaign, as Hamiln and Wilson (2004) suggest, the focus of establishing the degree of “fit” between the product and the cause does have a significant effect on people’s evaluation of products. A temporary CRM programme also offers firms a quick, easy way to create a social image by targeting a particular consumer group with a particular preference for a specific cause.

Eighty-five percent of the respondents suggest that longer-term CRM programmes can provide a consistent brand image for their target audience and that the target audiences recognize them more easily. This can increase people’s confidence in the content of the message that a firm is trying to convey. The social CRM campaign adopts this concept by remaining in a long-term collaborative relationship with one or a small group of causes in a CRM campaign (79 % of respondents). The public had a clear preference for the continuous commitment of firms to social initiatives, and this commitment influences people’s favourable behaviour towards the firm. A long-term CRM campaign will help firms to gain legitimacy by demonstrating persistence in their engagement with certain social activities. This adds consistency to their CRM messages and makes their CRM programmes an efficient relationship-building tool that helps them to maintain the trust of their stakeholders.

The integrative CRM campaign has a large collection of separate, closely related projects that vary in terms of their length and aims to attract customers and stakeholders’ attention at the same time (90 % of the respondents). In this type of CRM, different lengths of campaign serve different strategic purposes. Eighty-seven percent of the respondents suggest that short-term advertising and sales-promotion CRM campaigns aim to attract the customers’ attention and influence their purchase intentions about a firm’s products. On the other hand, long-term collaboration with employee volunteers demonstrates their commitment to the social initiative and wish to strengthen the firm’s relationship with its stakeholders.

Geographical Scope

The geographical scope of the campaign refers to the “scope of reach” of the CRM message.

For altruistic CRM, the respondents suggest that companies do not plan them in the first place and make no attempt to design-specific messages (77 % of respondents),Footnote 1 and that the scale of an altruistic CRM campaign is usually small and regionally based (90 % of respondents). Given the advances in communication technology, some messages can become widespread among the public.

For commercial CRM, firms choose to use the universal approach for raising brand awareness in different locations (91 % of respondents). The findings imply that firms use the universal approach to commercial CRM to generate widespread recognition of the corporate brand. This is supported by Apostolopoulou and Papadimitriou (2004)’s suggestion that sponsoring a high-publicity campaign can increase brand awareness at a higher level. Managers believe that, if CRM programmes adopt a universal approach, then they can easily attract media attention and increase a firm’s brand awareness. At the same time, connecting with a large nationally recognized NPO also means that there are more opportunities to reach potential customers (70 % of respondents). This is because the firm views the supporters of NPOs as potential buyers. If a firm works with a large NPO that has a big donor base, it can gain a larger potential audience for its CRM campaign.

Although the universal approach provides an opportunity for a firm to improve its brand image and raise awareness about its social responsibility initiatives, however, the impact of widespread coverage is usually relatively weaker than a territorially focused message in terms of the audience’s relational attachment (67 % of respondents). The respondents suggest that firms will choose a territorial approach when designing social CRM campaigns. Ross et al. (1992) suggest that people have favourable attitudes towards firms that support locally based causes. The finding suggests that the territorial approach provides a concentrated message for a specific region, to which the local people usually find it easier to relate than to a universal one (70 % of respondents). The firms use the territorial approach, focusing on showing that they are able to make a difference in their local community through the implementation of CRM programmes. Collaborating with a local NPO can help firms to build deep connections with their local community.

In integrative CRM, a firm attempts to design CRM that has a strong appeal on both a universal and territorial basis. According to the respondents, this can be achieved through two approaches. The first approach is to develop different territorial messages under the wider scope of a universal campaign (87 % of respondents). The second approach is to collaborate with different, regionally based NPOs under the wider scope of a universal campaign (81 % of respondents). At the national level, the firm delivers a universal message about its CRM campaign though a mass media channel to spread the message about its social performance achievements to the public in order to gain greater brand recognition and awareness. At the regional level, the firm also creates and delivers regionally specific messages regarding its CRM campaign through a local media channel to strengthen its community relationships in different regions.

Cause Selection

Cause selection, here, refers to the type of cause that the firm chooses to associate with for the CRM campaign.

For altruistic CRM, the selection of the cause appears to be random, with little connection to the firm’s strategy (77 % of respondents). In order to achieve the desired outcome, researchers suggest that the selection of the cause should entail a careful consideration of different aspects of a firm’s business strategy (Kropp et al. 1999; Larson et al. 2008; Wu and Hung 2007). The findings suggest that, sometimes, a firm can also be rewarded for supporting worthwhile causes due to purely altruistic motives (64 % of respondents). This interviewee suggests that there are some risks involved when selecting a cause for a CRM campaign. The negative effects resulting from the misrepresentation of the cause or corporate image outweigh the potential benefits of a CRM programme. The association between a firm’s brand and the sponsor cause can reinforce either the positive or negative position of the firm. The interviewee suggests that firms can be punished by people, if the chosen cause reinforces the negative position of the firm and people perceive that the firm has only commercial intentions. The managers need to be aware of the fact that not all altruistic CRM will be successful.

In terms of commercial CRM, the findings of this research suggest that a firm tends to choose a popular cause that is widely recognized by people (such as a natural disaster) at a given point in time to raise the awareness and ethical associations of the brand (91 % of respondents). This comment shows that, if a firm selects a cause that is appealing to its target audience, then this can help it to increase its CRM performance, and vice versa. Lafferty et al. (2004) suggest that firms should choose a cause based on people’s familiarity with and acceptance of that cause. The selection of a popular cause can also help to establish an alliance with a highly visible NPO. The firm wants to use the NPO’s images to promote the ethical attributes of its products, because product endorsement by a highly credible NPO can be a powerful tool for influencing people’s perceptions of a firm’s products (73 % of respondents). Alliances between the firm and a highly visible NPO with a good reputation in the given field can create a convincing message for its audience in terms of the firm’s credibility and brand awareness.

Although collaborating with a popular cause can help a firm to publicize a CRM campaign, however, this also leads quickly to the accusation that the firm is only interested in generating revenue and neglects the essence of social involvement. For social CRM, firms tend to choose constituency causes that aim to stimulate a small group of stakeholders’ emotions regarding a specific social interest related to the firm’s affairs (70 % of respondents). The respondents suggest that the selection of the cause should be based on the expectations of the firm’s target stakeholder group. This paper refers to this cause as a constituency cause. In this sense, this type of cause may be relatively popular, but it may really matter to a firm’s target stakeholder audience. This will help to enhance the firm’s legitimacy in the eyes of its target stakeholder groups.

For integrative CRM, the selection of the cause needs to consider both the customers and stakeholders’ position on the given social issue (68 % of respondents). Several field experts have proposed a new marketing paradigm that extends the function of marketing from not only delivering the message and value to the customer, to also addressing the needs of the relevant people, groups, organizations, or systems that are affected by the firm’s actions; in other words, its stakeholders (Ferrell et al. 2010; Maignan et al. 2005; Smith et al. 2010). The exercise of integrative CRM adopts the same principle with regard to cause selection. Managers need to consider the effects of the cause in terms of its appeal not only to its customers, but also to its stakeholders.

CRM Implementation Strategy

The CRM implementation strategy refers to the selection of the funding mechanisms and styles used to execute a CRM campaign.

For altruistic CRM, there is no plan to use a particular implementation strategy, given the nature of the campaign. Representatives from these firms express that most of the communication with regard to altruistic CRM is done voluntarily through media coverage and word of mouth via news reporters, radio commentators, and the general public (91 % of respondents). It also means that the firms have no control over the content of the messages, nor are able to ascertain how they are perceived by the public.

For instrumental CRM, firms’ managers tend to choose the implementation strategy according to their firms’ consumer strategy. The findings of this research suggest that the sales-promotion campaign and sponsorship forms of CRM strategy (91 % of respondents), and image-based advertising campaign (88 % of respondents) are more closely associated with the instrumental dominant logic of CRM. CRM sponsorship and image-based advertising campaign strategies can help a firm to increase its brand awareness and recognition. They help a firm to target a certain specific audience group that is interested in that CRM campaign. Both implementation strategies have a strong influence on the campaigner’s image amongst the event participants and the people who care about the cause. These two types of strategy trigger people who care about this specific cause to associate an ethical image with the campaigner’s brand image. On the other hand, the sales-promotion strategy brings in immediate revenue. Instead of passing the financial benefits on to the promotional supporters, the firm offers donations to an NPO. People will gain a sense of contributing during the buying process (Olsen et al. 2003). In general, all three types of CRM implementation strategy emphasise shifting the consumers’ perceptions about the firm, with the aim of improving the firm’s profitability.

For social CRM, the most popular choice of CRM implementation strategy is donation-in-kind, especially seeking employee volunteer opportunities (85 % of respondents). The findings suggest that the donation-in-kind CRM implementation strategy appeared to be more effective in building the stakeholder relationship. The essence of this strategy is to contribute something that is noncash or very hard to quantify as a cash amount, such as management time, staff sharing, products, services, and so on. The respondents agree that it is an effective strategy for communicating to people the message that the firm really cares. This is also supported by Ellen et al. (2000), who found that donation-in-kind can enhance trust among customers and the community relationship. The findings implicitly lead to the conclusion that a donation-in-kind campaign helps a firm to establish trust within its stakeholder relationships.

For integrative CRM, firms use multiple CRM implementation strategies to meet both their customers and stakeholders’ needs (90 % of respondents). A company manager will face having to make a “set” of CRM implementation strategy decisions rather than a single one in an integrative CRM situation. A typical integrative CRM will include more than one CRM implementation strategy, which aims to communicate with multiple groups of people. It aims to involve the customers and stakeholders in value creation by using multiple CRM implementation strategies to communicate with them.

Discussion and Implications

The empirical evidence in this study adds to our understanding of how organizations attempt to use different types of CRM to reach their strategic objectives. This paper advances our understanding of CRM by: (1) expanding the definition of the different types of CRM; and (2) further exploring the marketing decision associated with each type of CRM. By doing so, this research makes several contributions.

Theoretical Contributions

The research contributes to the existing literature in several ways. First, although CRM has been widely discussed in the literature of various academic disciplines, however, its definition and description vary considerably. For example, the description of CRM is both explicitly and implicitly expressed as societal marketing (e.g. Sen and Morwitz 1996; Szykman et al. 2004), sales-promotion transactions (e.g. Olsen et al. 2003; Strahilevitz and Myers 1998), strategic social alliances (e.g. Berger et al. 2004; Till and Nowak 2000), strategic CSR (e.g. Lichtenstein et al. 2004; Porter and Kramer 2006), and so on. This paper advances our understandings of CRM by further distinguishing its organizing principle into instrumental and relational dominant logic. Under instrumental dominant logic, managers consider CRM as a commercial marketing campaign and emphasise its use to influence consumers’ purchase intentions. Under relational dominant logic, on the other hand, mangers regard CRM as a stakeholder relationship management strategy, focusing on its use in enhancing stakeholder relationships. The results of this study contribute to extending the CRM research, in that they further highlight the dual foci of the instrumental and relational approach in designing a CRM campaign. This research reveals how the different types of CRM based on the interaction of these two CRM logics impact on the way in which a firm designs a CRM campaign. Furthermore, this paper identified how different marketing decisions are made according to the different types of CRM. This contribution is important because it provides a comprehensive view about the different types of CRM and their associated marketing decisions.

Second, this research also contributes to the literature on stakeholder relationship management from the perspective of CRM. The recent movements regarding stakeholder marketing and social marketing, that aim to broaden the concept of marketing from its usage in merely communicating the customers’ needs to addressing multiple stakeholders’ concerns about the business, have attracted the attention of many researchers (e.g. Dickinson-Delaporte et al. 2010; Mish and Scammon 2010; Payne et al. 2005). Prior researches on this subject, such as that by Ferrell et al. (2010), argue that the customer perspective of the marketing concept and the stakeholder perspective of the marketing concept are not mutually exclusive, but that there is some overlap between them. Moreover, Smith et al. (2010) suggest that marketing should shift from its narrow focus on customers to include the stakeholders in the value creation process. The findings reported in the research extend this line of inquiry by highlighting how different types of CRM can help firms to address the demands of their customers and stakeholder groups. Specifically, the findings illustrate how the choices that the managers make under different types of CRM campaign can shift the focus of a CRM campaign from the customers to the stakeholders, and that it is possible to address both the customers and stakeholders’ needs by engaging in a single, comprehensive CRM campaign.

Third, our research contributes to the literature on CSR. Although this study does not focus on CSR strategy, our findings about the different types of CRM are nevertheless relevant to the CSR strategy literature, since they contribute to the broader debate regarding the use of corporate social initiatives for achieving a desirable outcome for the company. There is evidence that socially responsible firms have better financial performance than others (Barnett 2007; Luo and Bhattacharya 2006; Orlitzky et al. 2003). Following these empirical efforts, the theory that CSR could lead to the fulfilment of the firm as well as create a social benefit became more widespread and firms started to consider CSR-related activities as a potential business strategy. Many researchers view CRM as a combination of CSR and marketing (Bronn and Vrioni 2001; Maignan and Ferrell 2004; Varadarajan and Menon 1988). In this sense, CRM is not only about firms doing the “right thing” (CSR-related activities), but also about using marketing techniques to “tell” people about the ‘right things’ that the firm is doing. The results of this research show that a firm can choose different types of CRM in order to disseminate its CSR performance. This finding is important because it suggests that the firm should broaden its strategic consideration when planning CSR activities by including a plan for CRM communication.

Managerial Implications

This research has implications for CRM management, since it suggests that a firm can adopt two different approaches (i.e. the instrumental and relational dominant logics) when engaging in CRM, the combination of which generates four different types of CRM campaign (altruistic, commercial, social and integrative). The findings clearly show that some specific choices regarding the different dimensions of CRM decisions (i.e. campaign duration, geographical coverage, cause selection and implementation strategy selection) must be taken in order to create different types of CRM campaign. Corporate managers can control these decisions and therefore deliver different types of CRM campaign to suit a firm’s marketing needs. For NPO managers, this research documents a firm’s CRM decisions patterns (i.e. Fig. 1) regarding four different types of CRM campaign. These CRM decision patterns of the firm under different types of CRM campaign can be used as the guidelines to assist NPO managers when negotiating with the firms in their CRM alliance. By knowing what the firm wants from different types of CRM, the NPO managers will gain a better understanding of their own bargaining power when dealing with the firm’s manager. In general, there is no ideal type of CRM. A firm’s manager should choose the most appropriate type depending on the specific situation. For example, if the goal of the firm in a particular period is to generate additional revenue, then commercial CRM will be most suitable for this situation.

Public Policy Implications

This research has several public policy implications. The government offers incentives to encourage CSR activities (Albareda et al. 2008; Sarkar 2008). CRM, by allowing firms to publicize and capitalise on their CSR activities, becomes a popular format for firms to engage in CSR activities (Bhattacharya and Sen 2004; Maignan and Ferrell 2004). The findings of the research identify firms’ organizing logic when they launch different types of CRM campaign. The public policy makers can use them to design a proper incentive system (i.e. tax breaks) to encourage particular types of CSR activity. Moreover, the government has long considered NPOs as its partner in delivering a portion of public welfare policy (Gazley 2008; Smith and Lipsky 1993) and it lacks sufficient funds to support NPOs in an economic recession. A CRM alliance allows NPOs to access firms’ resources in order to continue providing public services (Berger et al. 2004; Liston-Heyes and Liu 2010). The research results can be used as guidelines for policy makers when designing public policy to encourage firms to collaborate with NPOs or training programs to coach NPO managers to deal with the firms in the CRM alliance relationship. For example, governments can offer tax incentives for firms that will establish long-term collaboration with NPOs.

Conclusion, Limitations and Future Research

In sum, this research highlights a firm’s behaviour under different logics of CRM and introduces four types of CRM (altruistic, commercial, social and integrative) based on the extreme values of the instrumental and relational dominant logics of CRM. It also explores how firms make different marketing decisions (campaign duration, geographical scope, cause selection and implementation strategy) under different types of CRM. By doing so, this paper addresses the knowledge gap in the CRM literature by expanding the definitions of CRM, and discovers how CRM strategies are developed for different types of CRM. As with all research, this study has limitations that must be considered and these can open up new avenues for further research. First, this research does not produce any quantitative measurements about either the instrumental or relational dominant logics of CRM. Further, research should explore the factors related to both types of CRM strategy logic, which can be used to examine the management approach of CRM empirically. For example, the researcher can first develop ways of measuring these two CRM logics and then use them to access the degree of mix (as a percentage) of the CRM logic mixture of a particular CRM campaign in relation to its performance. By adjusting the degree of the mix of CRM logic, the researcher can then determine the optimal level of the mixture of CRM logics for a particular CRM campaign. Second, due to the nature and scope of this study, the author cannot conclude whether one type of CRM campaign is better than another, or which type of company (cause, industry, etc.) is better suited to the use of a particular type of CRM campaign rather than another. In order to answer these questions, larger scale quantitative research is required. Further studies could analyse the impact of each type of CRM campaign in different situations. For example, a quantitative study could be conducted to study the effects of industry differences on CRM performance for different types of CRM campaign. Using multiple-group structural equation modelling, the researcher can examine the relationship among the type of CRM, CRM performance and the effect of industry differences. Third, self-reporting bias may exist. The interview questions are designed to engage in detailed discussions with the interviewees regarding their experience of CRM campaign design and the relevant decision-making. The critical themes related to each dimension of the marketing decision (i.e. the duration of the campaign) for the CRM are identified during the data analysis. Although the author has compared the answers from the corporate and NPO representative with the available public information (i.e. annual reports), some ambiguities still exist with regard to some of the jargon used by the interviewees. For example, the interviewees may claim that they have a long-term relationship via their CRM collaboration. However, they failed to specify what qualifies as a long-term relationship. The author suspects that the perceptions of a long-term relationship may differ from time to time so future researchers may consider exploring this issue further. Fourth, the study has potential bias towards the widespread CRM campaign. Other than the motive of firms’ commercial or social interest in CRM, other reasons may also affect firms’ choices regarding a widespread campaign. For example, the geographical scope of the CRM campaign could also depend on whether the business is multinational, national or local. Moreover, as this research only selected large NPOs, which are also more likely to partner firms under a widespread campaign, this research may have a possible bias towards considering a widespread campaign as a universal approach in CRM with regard to the geographical scope. Future research can further explore this issue by collecting data from different sized NPOs and comparing the findings with this research or conducting a large-scale survey and controlling the size of the NPOs during the data analysis.

In addition, future research opportunities may also emerge for different styles of CRM (see Table 7).

Table 7 Possible themes for future research directions
Full size table

To give some examples, for altruistic CRM, future research could assess the value of voluntary media exposure and word of mouth. Given that this is the primary way of communicating messages under this type of CRM, further research might explore the influence of word of mouth on CRM dissemination. For social CRM, future research might focus on finding more ways to design and organize this type of CRM. Some possible themes, such as finding appropriate content for the messages of social CRM to address different social issues, studying the social CRM strategy for territorial focus campaign appeals, and studying the social CRM strategy for the donation-in-kind CRM implementation strategy, may help managers to design better social CRM in order to communicate with the firm’s stakeholders and restore its legitimacy. For commercial CRM, future research can focus on finding different tactics for triggering customers’ purchase intentions in this type of CRM. Some possible themes, such as examining the consumers’ attitudes towards the firms’ behaviour with regard to choosing to collaborate with different causes in commercial CRM and studying the different tactics for sales-promotion-based commercial CRM (i.e. different formats, conditions and donation amounts), can help to explore consumer attitudes towards CRM further. Although researchers have made some headway in this area (e.g. Olsen et al. 2003; Pracejus and Olsen 2004; Strahilevitz 1999), much remains to be done. Finally, for integrative CRM, the future research might focus on identifying a balanced approach to designing a CRM campaign that would address both the customers and stakeholders. Some possible themes might be examining how to balance stakeholder and consumer interests, studying the cause selection strategy for integrative CRM, and exploring the effects of combining different durations and CRM implementation strategies. Despite the limitations and the fact that more study is needed of CRM, this research represents a step towards understanding CRM strategy in relation to the marketing decisions about campaign design.