Transcript The Essence of Strategic Marketing for Nonprofits

Building Your Organization’s
Share of Mind & Heart: The
Essence of Strategic Marketing
SUNY Orange Institute for Nonprofit
Leadership and Management
4th Annual Nonprofit Leadership Conference
John Bassler, PhD - President, Know/Go NPD LLC
Karen VanHouten - Executive Director, Community
Foundation of Orange and Sullivan (CFOS)
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Elements of strategic marketing
• Organizational mission statement
• Strategic objectives
•Time-specific
•Measurable
•Plan for accomplishing objectives
• Offering (product or service)
• Clients and needs (target market)
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Elements of strategic marketing
• Who pays for the service?
• Other stakeholders
• Market segments
• Competition
• Differentiation and positioning
• Volunteers
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Elements of strategic marketing
• Promotion (marketing
communication)
• Delivery location(s)
• Pricing
• Offering(s): opportunities for
innovation
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Example: Community Foundation of
Orange and Sullivan (CFOS)
We connect people who care with causes that matter and we serve
people of all means.
To donors, CFOS represents an effective and innovative giving vehicle, one
that combines maximum tax savings with maximum flexibility and the
opportunity to make a difference right here at home in and around Orange
County… and beyond.
To other charitable organizations, CFOS represent the source of grants whose
sole purpose is to improve the quality of life in our region.
Perhaps most important of all, CFOS is the link between donors and other
charitable organizations, and between donors and those students who
receive grants from scholarship funds which are established through the
Foundation.
CFOS currently manages more 75 permanent charitable funds than for
individuals, families, businesses, and organizations that turn to us to help
fulfill their charitable dreams. And this number of funds continues to grow
as more people like you feel compelled to step forward as generous
participants in the vision of a stronger community.
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CFOS current marketing strategy
• Mission statement
To assist donors in achieving their charitable
intentions through the establishment of funds that
collectively create permanent endowments, and
thereby enhance the quality of life in the region.
• Objectives
•Grow pool of endowed funds under management
to $7 million by December 31, 2008
•$4.6 million at end of 2007
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CFOS current marketing strategy
• Offering
We offer individuals, businesses, and organizations the
opportunity to leave a legacy. Our dedication and
commitment is to focus on donor services - thus our
tagline of connecting people who care with causes
that matter. In doing so we support in perpetuity the
many charitable organizations and initiatives that
help make our region one of the finest places in the
world to call home. (Emphasis added.)
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CFOS current marketing strategy
• Clients and needs (target market)
•All sorts of individuals, businesses, and
organizations may have the desire to leave a
legacy
• Individuals who want to establish a memorial
• Businesses that want a vehicle for charitable contributions
• Nonprofits that want to establish an endowment
•And who want to avoid the administrative burden
of operating an endowment or foundation
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CFOS current marketing strategy
• Who pays?
Each endowment fund is assessed an asset
management fee.
• Other stakeholders
•Those whom we ask to support us so that we can
provide the services we offer to donors.
• Market segments
•(See “Clients,” slide 8.)
•Also: professional advisors
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CFOS current marketing strategy
• Competition
•Private foundations or endowments
•Neighboring community foundations
•Fidelity Donor Advised Funds
•Vanguard Donor Advised Funds
• Differentiation and positioning
•Simplified process for setting up charitable entity
•Donor involvement in grant making
•Wide variety of assets accepted
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CFOS current marketing strategy
• Volunteers
•Part-time administrative help
•Board members
• Set strategy
• Raise operating funds (and in-kind support)
•Committee members
• Events
• Financial oversight
• Awards of grants and scholarships
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CFOS current marketing strategy
• Marketing communication
•Web site
•Newsletter
•Newspaper insert
•Leave-behind encouragement cards
•Tri-folds
•Pamphlet
•Seed packets
•Bookmarks
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CFOS current marketing strategy
• Delivery locations
Not relevant for CFOS
• Pricing
1% of assets under management per year, payable
quarterly
• Innovation opportunities
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Developing or modifying
marketing strategy
• Analyze current situation
• Understand markets, customers, and
stakeholders
• SWOT analysis
• Segmentation and positioning
• Marketing mix
• Implementation plan
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Analyze the current situation
• Internal environment
• Resources
• Climate
• Relationships
• Keys to success
• Warning signs
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Analyze the current situation
• External environment
• Customers/clients/stakeholders—re-examine
• Who are they--current and potential?
• How do they use our products (services)?
• How do non-client stakeholders relate to us?
• Where do they purchase our products or use our
services?
• What is the context of their purchase or use?
• On what basis do they choose our brand v. others?
• Why do some potential customers NOT purchase from
us?
• Why have former customers defected?
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Analyze the current situation
• External environment (continued)
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Competitors
Economic change
Political trends
Legal/regulatory issues
Technological change
Socio-cultural trends
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Two types of nonprofit
competition
•Organization-level competition:
• Competition for clients, volunteers, and
resources
• Behavior-level competition:
• Need/desire competition
• Generic competition
• Format competition
• Offering competition
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Understand markets,
customers, and stakeholders
• Analyze markets
• Broad definition of market and needs
• CFOS: Who might be interested in outsourcing
endowment management?
• Customer needs and behavior
• Market-research tools
• Stakeholder needs and interests
• Market-research tools
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Getting information about
customers and stakeholders
• Observation
• Self-reports, diaries
• Interviews
• Focus groups
• Surveys
• Media coverage
• Organization Web sites
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SWOT Analysis
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Internal Strengths
Internal Weaknesses
External Opportunities
External Threats
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Strengths--internal
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Financial resources
Brand recognition
Cost efficiencies
Management talent
Operational excellence
Superior quality
Alliances
Engaged, loyal employees
Talented, committed volunteers
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Weaknesses--internal
• Financial limitations
• Lack of market awareness
• High costs
• Inexperienced management
• Operational deficiencies
• Quality problems
• Lack of partners
• Uncommitted employees
• Insufficient number of volunteers; wrong skills
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Opportunities--external
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Growth in need for services
Strategic weaknesses among competitors
Access to new technology
New distribution channels (e.g., Internet)
Interested potential partners
New sources of capital
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Threats--external
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Market decline
Emergence of a new competitor
Changing client needs
New technology threatens obsolescence
New distribution channels (e.g., Internet)
Loss of a key supplier
Demographic shifts
Economic disruption
Political turbulence
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SWOT matrix
STRENGTHS
OPPORTUNITIES
(match to
opportunities)
(capitalize on
them!)
WEAKNESSES
THREATS
(apply resources to
convert to
strengths)
(neutralize or
protect against
them)
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Market Segmentation
• Goal of segmentation: create identifiable groups of
customers such that within each group, customers’
likes, needs, tastes, and market behavior are similar,
but are different from those in other groups
• External criteria for successful segmentation:
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Segments are
Segments are
Segments are
Segments are
identifiable, distinguishable, and measurable
substantial
accessible for marketing communications
responsive
• Internal criterion for successful segmentation:
• Firm can tailor marketing strategy to each target segment
(What does this mean?)
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Bases for segmentation
• Behavioral
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Benefits sought
Product usage intensity
Product use occasions
Buying process (very important for B2B)
Price sensitivity
• Demographic
• Geographic: region, urban-rural spectrum
• Psychographic
• Personality
• Lifestyle
• Motives
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Differentiation and Positioning
• Differentiation: create recognizable
feature and benefit differences v.
competing offerings (branding)
• Give customers a compelling reason to choose you
• Positioning: manage customers’
perceptions of the product or service
• Uniqueness
• Desirability
• Believability
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Differentiation and Positioning:
A Fort Worth museum example
• Kimbell Art Museum
• Modern Art Museum of Fort Worth
• Amon Carter Museum
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Marketing mix, take 1:
The four P’s of marketing
strategy
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Product
Price
Place (distribution/delivery)
Promotion
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Product strategy
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Features, benefits, related services
Quality and design
Packaging and labeling
Product development and management
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Pricing strategy
• Price elasticity (= customer price
sensitivity)
• Value perceptions
• Margin objectives
• Competitors’ pricing strategies
• Channel partners
• Transient elements (discounts)
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Distribution strategy
• Channel partners’ responsibilities
• Channel hierarchy (e.g., Dell v. Compaq)
• Selection of channel partners
• Competitors’ strategies
• Customers’ preferences
• Logistics
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Promotion strategy (IMC)
• Advertising
• Public relations
• Events
• Sponsorships
• Personal selling
• Especially important in organizational sales
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Marketing mix, take 2:
Tailor the mix to each
segment
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Product
Price
Place (distribution/delivery)
Promotion
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Optimize your marketing strategy
• Get the information you need
• “Testosterone-driven” decision making
is a recipe for disaster
• How many of you know—really know—
what your customers want and how
well you’re doing?
• Or are you making assumptions based
on your own beliefs and preferences?
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Marketing mix, take 3:
The seven C’s of marketing strategy
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Customer—you can solve his or her problem
Central user—may be different from the customer
Competition—what are they up to?
Company—do you have the needed capabilities?
Context—you need to know the environment
Collaborators—you always need help
Commitment—are you willing to support the
offering?
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The “Anna Karenina” Principle
• Tolstoy’s novel begins: “Happy families are all alike;
every unhappy family is unhappy in its own way.”
• Translation: in order to be happy, a marriage must
succeed in many different respects.
• For most important things, success requires avoiding
all of many separate causes of failure (Jared Diamond,
Guns, Germs, and Steel).
• For all organizations, strength in all seven factors is
required for competitive success.
• This is an empirically demonstrable claim
• You can’t compensate for weakness in one area with strength
in another
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Strategy Implementation
• The best strategy, if not well executed, is worthless
• (Conversely, good execution cannot rescue a bad
strategy!)
• There are three key elements:
• 1. Test the strategy for internal consistency
• Every component must support the chosen targeting and
positioning strategy
• 2. Monitor execution to be sure the plan is implemented as
designed
• 3. Establish performance targets and measure results
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What if you’re a small
organization?
• Get volunteers to help develop and execute a
marketing program
• Use board members to help:
• Get client/stakeholder information
• Promote the organization
• Recruit business marketers to the board
• Market research doesn’t have to be expensive
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What if you’re a small
organization?
• HOWEVER...
• In many cases it takes the nagging of
someone like a consultant to get the
organization’s top management to give the
time required to develop a good marketing
plan.
• It’s very easy to respond to daily urgencies at
the expense of strategic thinking.
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Resources--books
• Andreasen, Alan R., and Philip Kotler. Strategic
Marketing for Nonprofit Organizations, 6th Ed. Prentice
Hall, 2003.
• Wood, Marian Burk. The Marketing Plan Handbook,
2nd Ed. Pearson, 2005.
• Clancy, Kevin J., and Peter C. Krieg. Counterintuitive
Marketing. Free Press, 2000.
• Andreasen, Alan R. Marketing Research that Won’t
break the Bank. Jossey-Bass, 2002.
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Resources--people
• Jane Daniels, volunteer-management consultant
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Zebra Advisors, LLC
Mohegan Lake, NY 10547
[email protected]
914-471-5545
• Paola Gentry: project director, Families First NY
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Expert on funding for management development
Poughkeepsie, NY 12601
[email protected]
845-452-1114 x3101
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