Tuesday, October 5, 2010

Pair Contributions with Purchases

Fulfill your social responsibilities as a retailer by making charitable contributions. To increase sales at the same time, announce to your target markets that you’ll donate a certain amount of money for purchases from your store. Building on University of Texas-Austin and University of Wisconsin–Madison findings from a study of 3,500 consumers, here are some tips about pairing contributions with purchases:
  • Limit how frequently you announce that you’ll be pairing a contribution to charity with the purchase of an item. Just as with price discounts, if it’s done too frequently, it becomes less likely to boost sales. But as long as you don’t do it too often, your promise of a charitable contribution of $1 for each item purchased at the regular price will produce a higher average percentage gain in sales than offering a discount of $1 off the regular item price.
  • Make the offer for moderately popular products and/or brands. The percentage increase in sales for items that are already selling well won’t be as great as with less popular items, so don’t make the offer for items that are already quite popular. But because we’re talking about percentage increases, also don’t make the offer for products and/or brands that are not selling well at all. A 20% increase in unit sales of 100 is much less than a 10% increase in unit sales of 500.
  • Make your offer of the donation for an item where you carry products with the same brand name in different product categories. By allowing the customer to feel they’re contributing to a worthy cause, you build in the customer a good feeling toward the brand they purchase. This good feeling spreads to other items in different product categories that carry the same brand name, so makes sales of those other items more likely.
  • For the most efficient sales increases, make the offer on a branded item in only one product category. Announcing that you’ll make the donation for items in three different product categories that carry the same brand name won’t triple brand attractiveness compared to the effect of doing it with a product from a single category. If you want to make the offer for three different products, do it for products in three different categories, each one carrying a different brand name.
Click below for more:
Introduce Unknown Products with Charity
Show Fair Pricing by Contributing


  1. Dear Bruce. I am a little troubled by these suggestions. Please let me explain why. The Pattycake Doll Co. sells dolls for children... and we donate 10% of our profits back to children's charities. Our customer does not have to change their behavior in our stores, and we do not ask them to donate. We do have a scrolling marquee at the bottom of our sites that publicizes this. (you can see an example at: http://www.PattycakeDoll.com.
    In the example above, it seems that the retailer is really getting a free ride, and is using the 'charity' as a tool to increase sales. If I read this right, rather than discount the item one dollar, which would go to the customer, the retailer charges full price, and then gives one dollar to the charity. So in my opinion, the retailer didn't give the dollar, he simply passed along the customer's dollar to the charity. Now of course, some would say that the retailer did in fact have a dollar less in the till, therefore it is their donation. But I personally feel that it is intent that counts in charitable gifting, (Maimonides 8 levels of giving again), and that the intent is what determines if this was charity from the retailer, or a ploy to increase sales. What do you think?

  2. I’d be comfortable classifying the suggestions in my post as a TACTIC to increase sales. I’m not sure I’d call it “a ploy to increase sales,” though, since that implies flimflam of the consumer. The intent of the retailer is quite clear to the consumer: Doing good while doing well.
    As to whether this qualifies as a ploy that the retailer practices on THEMSELVES, yes, it could become that. If the retailer believes that this pairing of contributions with sales COMPLETELY fulfills a self-determined obligation to help others in accord with Maimonides’ Laws of Charity, the retailer might indeed be flimflamming themselves. On the other hand, if implementation of what my blog post suggests becomes PART of the retailer’s program of charitable giving, I view that as a morally sound positive.
    Thanks for giving me and the other readers of your comment the opportunity to think this issue through, Peter. I recognize that your helping us in this way qualifies as a quite honorable act on the Maimonides scale.