Transcript Mission Based Marketing - Association for Progressive

Mission Based Marketing
How your Not-For-Profit can succeed
in a more competitive world.
Presented
to the
Association for Progressive Communication
October 15 -16, 1998
by
Charles P. Sitkin, Consultant
in affiliation with Carnegie-Mellon University
Outline of Presentation
Mission-Based Marketing—What?
 Customers
 Competition
 Marketing
 Marketing Material
 Customer Service
 Financial Empowerment
 Final Words

Mission-Based Marketing
The tide is changing—the world of the
Internet is competitive
 You are now in a competitive world—Is
there still a need for NGO-specific
services?
 Dealing with this means being
Mission-Based yet Market-Driven

Mission-Based—Market-Driven

The Mission or the Market
– The market is always right—determines
success
– The market is not always right for you
– The mission should be the ultimate guide

Moving with the markets—maintaining
your mission
– Have the Mission visible—everywhere
– Use the mission statement constantly
– Use the mission in market/service decisions

Hold on to your Core Values
Successful Not-For-Profits
Meet wants not needs
 Treat everyone like a customer
 Have everyone on the marketing team
 Ask, Ask, Ask and then Listen
 Innovate constantly
 Don’t fear the Competition

Customers
Meeting Customer Wants
Huge difference between needs and
wants
 Target wants
 People have needs—people seek wants

The Customer is Always Right—Wrong!
The Customer is not always right—but
 The Customer is always the Customer
 The Customer may not be right for you

Competition
Competitive Intensity
Who Are your Competitors?

Internal Markets
– Board Members
– Staff

External Markets
– Funders: government, members,
foundations, donors
– Products/Services: fees, prices, charges
– Referrers: customers, suppliers, funders
Study the Competition
Do Not Fear Competition —Learn From
Them
 What do you know about them?
–
–
–
–

What Services do they provide?
What clientele are they seeking?
What value do they provide customers?
What are their prices
How Do you research your competition?
– Public Records, customer, and Board, Staff, and Volunteers

What are your competitors after?
– What people or things is your competition trying to take away
Be Better than your Competition
Pay attention to what customers want—
give it to them
 Be better than your competition in the
eyes of your customers
 Competing is not bad—not immoral
 Competing means being able to do
more Mission
 Tell customers how good you are.

Marketing
Marketing—A Team Effort
Everything that everyone in your
organization does every day
 Every action effects the entire
organization

Motivating Board and Staff
Talk about the reality of competition
 Talk about your mission
 List similar organizations that are now in
trouble/out of business
 Get comfortable with the idea of
marketing
 Get comfortable with the idea of
competition

Results of being Market-Driven
Happier markets—consumers and
funders
 Better image
 Retain your market
 More effective and efficient
 New revenue sources
 More financially stable

Results of Staying Service-Driven
Risk continuing to provide outdated
services
 Risk continuing poor relationships with
key funders
 Risk losing historically loyal customers
 Risk true, perhaps fatal, financial crisis

Change with the Market
The Marketing Cycle is never-ending
Needs flexibility
 Maintain the capacity for flexibility
 Be a Change Agent

Being a Change Agent
Show the Mission connection
 Go through change together
 Talk regularly about competition
 Point out changes outside the
organization
 Don’t wait for big changes
 Don’t criticize the Past—look to future
 Be patient!

Change in a Competitive Environment
Shorter attention span
 Louder advertisement and media
 Shorter product cycle
 End of annual cycles
 Less sympathy for Not-For-Profits that
can’t keep up

– Stability is no excuse
– Poverty-Chic is out!
The Not-For-Profit Marketing Cycle

The marketing cycle that works
– Marketing doesn’t start with a
product/service
– Marketing starts with the Market

Most Not-For-Profits have a marketing
disability
Marketing Cycle of a Not-for-Profit
1. Define/Redefine the Market
2. Establish what the Market wants
3. Shape and Reshape your
Product/Service
4. Se a Sensible Price
5. Promote the Product/Service
6. Distribute the Product/Service
7. Evaluate, Evaluate, Evaluate
8. Return to # 1.
Set a Sensible Price
Recovers all of your costs
 Adds a profit
 Meets the reality of the market
 People buy based on value.

Disability of Most Not-For-Profits
Have service oriented backgrounds
 React to their own training
 Knowing what people need—not
listening to what they want

Train yourself to listen for wants!
Ask, Ask, Ask and then Listen
First, you ask
 Second you listen
 Then, meet as many wants as you can.

Who are your Markets?
Identify and Quantify your Markets
 Segment your Market
 Focus on your target Markets
 Treat All your Markets like Customers

The Market of a Not-For-Profit

Internal
– Board of Directors
– Staff Members

Payers
–
–
–
–
–

Government
Members
Foundations
Donors
Users
Reference Sources
Focusing on your Target Markets
Segment your market
 The 80/20 Rule
80 % of your income comes from 20 %
of your customers
 The Strategic Plan Method

– Which markets do we want to grow?
– Which parts of our community are most
important to our mission?
Treat All your Markets as Customers
Customers, customers everywhere
 Barriers to the customer service
mentality
 Internal customers
 Funder or payer customers
 Service customers

Focus on your Core Strengths
Review the Markets
 Evaluate the Competition
 Look at your core competencies

– Do a SWOT analysis
– How do your Strengths and weaknesses
compare to your competitions’?
SWOT Analysis

Strength
A positive internal aspect of your not-for-profit that you can
control

Weakness
A negative internal aspect of your not-for-profit that you can
control, and plan for

Opportunity
A positive external condition that your not-for-profit does not
control, but of which you can take advantage

Threat
A negative external condition your not-for-profit cannot
control, but you can perhaps lessen.
Customer Service
Three Customer Service Rules
The customer is not always right, but
the customer is always the customer.
 Don’t sell services, solve problems—
from the customer’s perspective
 Customers don’t have problems, they
have crises

The Customer is always the Customer
Listen to the whole complaint
 Acknowledge and apologize
 Ask them what they want
 Never make problems you can’t keep
 Keep excellent notes
 Never assume a customer is happy

Regular Customer Contact


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

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All key markets should be offered the
opportunity to have input
Keep up on customers’ important issues
Tell them if things aren’t fixed immediately—
call YOU
Send a note thanking them for each gift,
payment, effort
If you guarantee—live with it
Check on quality
Always follow up with new customers
Turn Customers into Referrals
Referrals are not truly”free”
 Don’t be too eager with new customers
 Always ask permission to use a name
as a reference
 Remember to meet referrers’ wants
 Always call or write a note of thanks

Marketing Material
Not-For-Profits Marketing Material Problems

The marketing disability
– We know what you need—we don’t care
what you want
Tradition
 Penny-Wise—Pound-Foolish
 Public Relations vs. Marketing

Include in your Marketing Material
Your Mission
 Your Focus
 Brevity
 Connect Problems to Solutions
 Appearance
 References
 Sources for more information about you

Avoid in your Marketing Material
Jargon
 Inappropriate Photos
 Lack of Focus
 Asking for Money
 A history lesson
 Out-of-Date
 Boring

Different Material—Different Markets
Market
Board
Staff
Dono rs
Gov ern m en t
Fou nd ations
Me m bersh ip
Ser vice Recip ien ts
Refer ral Sou rces
Want
Ini tia l info r mation , ong oing
infor m ation
Ini tia l info r mation , ong oing
infor m ation abou t the
or ganiz ation
Ways to g ive , w hat ha p pens
to don ations , w ho to call
Prog ram q u alit y, avail abilit y,
re g ula tion s
Dem ons tration of exp er tise
and e x perie nce
Benefit s and costs of
m em bershi p
Ser vices and o u tcome s,
a nu mber to call
Po s sibl e Mate rial
Board orie ntatio n manu al,
ne w sle tte r
Staff or ien tation
m ateri als , ne w sle tte r,
m anage m ent orie ntatio n
S pecific p ie ce des igned
for dono rs
S pecific p ie ce—em p has is
on ou t com es, q u ali ty,
cer tifi cation le vels
Gene ral info rm ationa l
p ie ce, fu ndin g sp ecifi cs
S pecific p ie ce on valu e of
m em bershi p
Pie ce des igne d wi th targe t
grou p in m ind
Info rm ation abo u t prog ram
q uality a nd a rray of ser vices
A p ie ce de signe d for
p rofe ssion al refer rer
The Market Planning Process
Build on Common Ground
 Identify target markets
 Develop baselines
 Develop an asking schedule
 Develop a marketing plan

Financial Empowerment
Three Essential Philosophies
Your Organization is a Mission-Based
Business
 No one Gives you a Dime
 Not-For-Profit does not mean Non-Profit

Two Primary Rules for Not-For-Profits
Rule One:
Do More Mission
Rule Two:
No Money, No Mission
Ignore these rules at your peril!
Financial Empowerment

Measurable
– More revenue than expenses in at least 7
out of 10 years
– Cash operating reserves of at least 90
days
– At least 5% of total income from
endowment earnings
– Sources of revenue from non-traditional
non-governmental sources: business
income
Financial Empowerment

Management
– Shares its financial information widely,
practices bottom-up budgeting
– Use appropriate leverage

Mission
– Organizations supports their missions by:
» using rapid-response mission reserve
» Being financially flexible enough to
accommodate changes in service delivery
Final Words
World will always need Not-For-Profits!
 Special people form the philanthropic
cement for civil society!
 In ten years, today’s Not-For-Profits won’t
be needed!
 Organizations meeting future perceived
wants will be needed!
 You can be part of such Not-For-Profits!
 Ask, Listen, Respond!
