Online commerce has become increasingly competitive, especially with the rise of do-it-yourself shop solutions such as Shopify and WooCommerce. Many online retailers are now looking for ways to differentiate themselves, increase loyalty, protect margins, build their brands and keep buyers coming back. One proven way to increase revenue and set you apart from the crowd is by accepting donations at your online store. Research has proven repeatedly that a donation program on your e-commerce site not only improves your brand image, but also increases revenue, customer retention and can also of course provide a lucrative tax deduction.
Reason #1: It’s Emotional, Not Rational
It has been shown that as much as 80% or 90% of consumer buying decisions are actually emotional based on brand, loyalty to a cause or other attributes versus purely rational thoughts around need. If you are selling a commodity product that is not unique, then you are selling mainly based on price and service. But adding a cause to your online estore and sharing your mission has been proven to enhance buyer loyalty. A Cone Communications and Echo Research study from 2013 found that 82% of U.S. consumers consider corporate social responsibility when they shop.
Reason #2: People Will Buy More While Donating!
It is interesting to note that both Amazon and EBay also regularly use checkout donations to reduce cart abandonment and increase sales. Buyers spend 26% more and retailers have 29% more sales when donation options are given. Here is more research from a past Cone Study supporting giving at the cart;
- 85% of consumers have a more positive image of a product or company when it supports a charity they care about.
- 83% of Americans wish more of products and services they use would support charities.
Reason #3: Builds Brand Loyalty
Consumers want to know what you stand for, and aligning yourself with a timely and product-relevant charity is a great way to achieve that. If it comes down to your brand of water shoes that helps clean the oceans vs one that doesn’t, well that’s a clear motivation.
- 80% of Americans are likely to switch brands (equal in quality and price), to the one that supports a charity.
- 47% of consumers will be more loyal to the company that supports a social or environmental issue close to their hearts.
Reason #4: Retains Existing Customers
Giving back improves a brand’s image in the community. It helps people to become more aware of your products/services. Donating is a great way to build emotional connections with your customers and keep them coming back. Giving to a timely or local cause (e.g. Hurricane victims, a local pet shelter) helps to differentiate the company from others in your market sector.
It is also interesting to note, that given the choice, consumers prefer that you take donations right off their e-commerce purchases rather than the company contributing at a later time directly. They also much prefer (2 to 1) that you make a long-term commitment to a focused project over time, rather than switching charities from month to month. Customers will stick around with shops who consistently align themselves with a charity for the long-term.
Reason #5: Increases Viral Social Sharing
Facebook is the most powerful social network for viral marketing. Making something get shared, or even go viral isn’t easy. However, charities that market themselves effectively know that telling a personal story that creates an emotional response is the leading way to get buy-in to a mission or cause. We have written more about this when we explain the 5 steps how to create an effective crowdfunding campaign. Aligning yourself with a charity makes for great content for your blog, and can vastly help expand your reach to new customers who may already support that charity, but have not bought yet from your estore.