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Seven Things Nonprofits Can Learn From Profits

From Media for Social Change: A Resource Guide for Community Groups (Revised edition, 1986), published by the Community Forum on Shared Responsibility, Toronto.


1. GET DOWN TO REALITY.
(It's No. 1)

In approaching a fund raising, membership student recruitment or communications problem, the first rule is to shed your cloak of virtue.

Look at yourself coldly and clearly. Business does it in an unambiguous analytical terms. So should so you.

Your organization is a product. Your donors, alumni members or students are consumers of that product.

Your organization fits into a product category: colleges and conservation organization are examples of two product categories, soap is another. Other organizations in your product category are your competitors. Now ask yourself some hard questions. How good is your product? How is it perceived by its consumers?

Is it filling a gap in its product category? What is your competition doing! How well are they doing it?

Answer these questions carefully. It is the beginning of a process called marketing.

2. MAKE MARKETING A WAY OF LIFE.
(Don't just do something, sit there)

Marketing is a mystical term. It is neither a luxury nor jargon. It is a disciplined approach to problem solving -- a process that allows you to think through a problem logically from point A to point B.

Hard questions need hard answers. And hard answers come from data. Look in the old files, talk to your staff people, talk to the individuals you service, talk to your competition. Build a frame of reference for your problem. Develop alternative solutions and then evaluate your alternatives before you act. No matter how urgent a problem is, if you sit there and think it through, your solutions will always be better.

3. LOOK AT YOUR PROBLEMS THROUGH THE EYES OF OTHERS.
(You may be a little nearsighted)

Marketing research is the essential ingredient in the marketing process. The best way to describe a marketing study is to say that it is an insurance policy.

You've probably seen the university that is spending $150,000 annually on recruitment of materials but not one dollar to find out whether the brochures, catalogues or posters will be effective in bringing new students to the school. But you'll never see Procter & Gamble distribute a new product nationally until it's been thoroughly concept tested, lab tested, and market tested. Because their bottom line is profit, the investment must be protected.

A study does several things. It validates (or invalidates) -- with numbers your hypotheses through the eyes of others. If you need a communications program, then it will tell you how to present yourself, what creative themes to use, what information is most important, least important -- these nuances may make all the difference when it comes to a successful solution versus one that fails or is only marginally successful.

4. NO ONE CAN BE ALL THINGS TO ALL PEOPLE.
(Find a need and fill it)

No product can be all things to all people. For instance Ivory Soap appeals to one market segment consistently-women who want a pure natural, utilitarian soap. Imagine Ivory trying to appeal to those who want a creamy soap, who want a coloured soap to match the bathroom, who want to feel sexy when they use it...ad infinitum. It becomes obvious that if a product tries to appeal to everyone, then it is likely to appeal to no one very much. Ivory has insured its place in the soap market by recognizing a consumer segment it can serve well. And because that segment is served well, it continues to buy.

The lesson for nonprofits is simple; locate your market, decide how to appeal to it and serve it.

5. FIND YOUR POSITION IN LIFE.
(And communicate it)

If you have located your market, you've found your position in life. But positioning shows. It is a presentation of your organization to the public-in speeches in brochures in films and slide shows, in your case statement, in your curriculum in your policy statement, at your conventions and meetings. It communicates what you have to sell that your competitor doesn’t. For example Ivory Soap is positioned to the segment we talked about earlier. All of its communications use fresh lively women, babies, soft imagery, and, of course, that famous line -- 99 and 44/100% pure. While Camay soap is positioned as lush, creamy, sexy soap. Its advertising uses beautiful models lounging in the tub preparing for an evening out. Each product has defined its market and reinforced its position through communications that are consistent and relevant.

6. YOU MUST COMPETE.
(Because if you don`t your competition will)

There's no getting around it. There's a finite amount of philanthropic dollars, board members and constituents available to all non-profit institutions. So you must compete. If you don't then your organization will suffer.

In the business world, people are always under pressure of fierce competition, price war and new product developments. They recognize the competition.T hey analyze its strengths and weaknesses and then develop responses which enable them to compete effectively. Sometimes they may offer a ``cents-off'' coupon as a premium. Or they may reposition their product as Bromo Seltzer did in vying with the giant, Alka Seltzer. Bromo Seltzer offered the one aspect that the competition could not. A speedier dissolve.

The same kind of thinking should be true of nonprofits. Maybe you can offer a reduced membership fee for a controlled campaign period...or try a new brochure... or offer one of your publications at a premium for joining the organization...or bus high school seniors to your campus for a weekend.
Now's the time to compete a little harder.

7.YOU HAVE MORE TO SELL THAN YOU THINK.

Almost every nonprofit executive has the fantasy of bringing his or her organization to a point where it can be self sufficient- not to have to rely on foundations, wealthy individuals or corporations. One of the best ways to become independent is to develop goods or services that could sustain your administrative and programmatic needs.

Business has been thinking like this for years. Only they call it extending their line. For instance Gillette sells razor blades and shaving cream. Their first product was razor blades. Through experience selling to the shaver, they came to understand his needs served him well and developed a reliable name. So when they came out with a new shaving product-cream- people felt confident buying from Gillette. And as the company continued to grow, the line kept extending - to various types of shaving cream and then on to developing related grooming products.

Nonprofits can easily adapt this thinking. Have you ever analyzed the salability of the goods and services you currently provides free? Perhaps you now give away a magazine that you could sell on a subscription basis. Maybe that last study your staff conducted can be sold to interested individuals or maybe you have contact with a unique list of people that can be bound into a directory and sold to the right market. Maybe you have experts on staff who can act as consultants for a fee. The alternatives are as endless as your ability to use the marketing process.

A little profit thinking in the nonprofit world? It's a business way of life.

(CX5008)

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