Could a company actually help their bottom line by both reducing the prices and also giving customers a small amount of money to give to charity?
Doubtful, many would say.
But according to one local startup founder, this type of initiative represents a new digital innovation in the corporate philanthropy world, a sector that Goowi founder Augusto Sotelo says hasn’t changed much ever.
The InnoCité-graduated startup Goowi persuades companies to launch online campaigns on its platform and preselect charities of their choice from the startup’s database. After that the company lets its online customers choose a cause by giving them a small amount of money, usually $5 or $10, to donate. In the process, Goowi helps the company’s campaign “spark meaningful conversations” with their social media fanbase. Moreover, those companies typically provide updates on where exactly that money went and how it’s being used, which has long been an issue within donator retention.
But to accomplish the end goal a given company should first offer a discount on a product, for example, $10 off of a purchase on top of the charitable donation.
As crazy as it sounds for a company to pony up nearly $15 per customer, Sotelo said there are good reasons they go along with the plan. Ultimately, they could gain more customers and sales, and improve their reputation.
For Sotelo, there’s two factors at play here. Beyond advertising spending, a large company generally has already committed to giving away thousands of dollars to a given charity, so giving customers the option to give away that money piece by piece isn’t actually changing their financials much.
Second, he says to make a truly engaging campaign customers need more than just a discount or the ability to donate – they need both at the same time to forge an emotional connection to the company.
“The feeling of saving money and also knowing you’re contributing to a charity is exciting,” Sotelo told MTLinTECH. “And in one way or another, these companies are spending money on advertising. Our long term vision is businesses will realize that it actually pays off taking some of that money from boring Facebook ads and instead giving it to their customers for the charities,” Sotelo told MTLinTECH.
Two of Goowi’s clients are Teo Taxi and Telus. At last night’s EY Entrepreneur of the Year awards, Teo Taxi partnered with Goowi to offer people $10 off their ride and $5 to give to YES Montreal, a charity that helps Quebecers find employment and start businesses.
“Within minutes of posting that we got a ton of shares,” said Sotelo.
Meanwhile, through Goowi Telus is allowing its clients to donate their own money to a list of different products that could be purchased for Opération Enfant Soleil. Telus will match any donations up to $6,000. Clients can choose to donate money towards a new incubators, heating beds or displacement pumps for various newborn units in hospitals.
“Ultimately we think we’re empowering businesses to change the world through sales while revolutionizing corporate philanthropy by giving businesses a return on investment. We’re doing that by helping them engage their customers in different ways,” said Sotelo.
“When a brand empowers you to help the world by buying a product it establishes a very strong emotional connection and that translates into longer relationships, repeat sales and word of mouth marketing,” he said.
Sotelo’s story is an interesting one. For over ten years in Argentina he owned his own company, selling promotional products for marketing purposes like hats and t-shirts.
But the constant travelling took a toll on his marriage and he decided to take a one-year sabbatical. He volunteered at his childrens’ school, then at a few charities in Montreal like Kids Code Jeunesse and YES Montreal. But what hit Sotelo the most was when his son prodded him at grocery store check-out after he declined to donate a dollar to a charity.
Sotelo responded that he already had his own charities he liked to donate to. Back in the car he asked the boy who he would donate to if he had the chance.
“When he responded I was shocked. My son said he wanted to help stop war and my daughter said she would like kids to have access to sports. I thought to myself, what would have motivated them to think that? It was kind of profound.”
Returning home that night he found out that just five per cent of charity money comes from businesses, and most people aren’t aware of the companies who are doing it.
“A business writes a cheque and sends it by mail. The person in the charity receives it and deposits in the bank. Pretty much the only two people who know about it are those people. If you go to hospitals you’ll see huge walls with little names and pictures of donors and that’s it. Nobody knows about it. Nobody knows what happened or when it took place.”
One of his motivations for founding Goowi was to help businesses get much more out of what they’re doing for charities. They’re doing it through using that charity money to engage customers in an effort to establish emotional connections. And along the way, to give those customers a real sense of knowing where their donation went.
Ultimately, corporations like Air Canada and McDonalds do donate a huge amount of money to charities, and part of the problem might be what Goowi is trying to help: how many people actually know about it?