Lawrence Jackson explores some common misconceptions about marketing in nonprofits and suggests ways the sector could benefit from a more rigorous approach.
The importance of marketing was highlighted in a 2007 social experiment by the Washington Post (www.youtube.com/watch?v=LZeSZFYCNRw). Joshua Bell is one of the world’s best violinists. For 45 minutes one chilly January morning, he played Bach on a Stradivarius worth $3.5 million at the entrance to Washington DC subway station. Over 1,000 people passed by but only seven stopped to listen and he collected a paltry $US32.17.
It is very likely commuters would have been awed by Bell’s performance had they been given cues like a sign advertising his credentials or a velvet rope creating a sense of occasion.
As this anecdote illustrates, marketing matters. Yet the practice is frequently misunderstood, especially in nonprofits where it is often seen as the domain of the business sector and thus not entirely relevant.
In reality, marketing is simply the process that facilitates an exchange. The term denotes much more than just the visible aspects of advertising, selling and promotion. It involves active management of your organisation’s product or service offering and contrasting this with your market need, size and structure. You need to understand how your customer will view your service and how to make it unique before undertaking distribution, pricing and promotion activities.
Myths and misconceptions
Many not-for-profit managers and executives believe marketing is only used to sell things to people that they do not really want or need. The 2001 study Non-profit Marketing: Just How Far Has it Come by American nonprofit marketer Don Akchin highlighted that:
1. Nonprofit organisations tended to perform one or two core marketing functions instead of adopting a comprehensive marketing philosophy.
2. When asked about “marketing” needs, the most cited were fundraising, event planning, public relations strategy, media relations, marketing strategy, and publications – so mainly concerning resource development or promotions.
3. When asked to rank various marketing-related responsibilities, marketing strategy was only rated as the top choice by 10% of the participants, compared with 53% who chose fundraising.
4. In terms of skills sought, nonprofit managers indicated high ratings on ability to write press releases, produce publications and write grant applications but a low interest in learning more about their “market” through formal market research techniques such as focus groups and surveys.
Nonprofit marketing today
A 2009 study by Sara Dolnicar and Katie Lazarevski at the University of Wollongong assessed the current state of marketing practice in nonprofit organisations internationally. From a sample of 136 respondents from the United Kingdom, United States and Australia:
1. Nonprofit managers indicated their belief that the most important marketing activities are promotional in nature.
2. Only a small proportion acknowledged the importance of marketing research and strategic marketing.
3. Only one fifth of marketing staff were formally marketing trained.
4. Organisations did not differ substantially in their use of marketing.
Overall, the study was consistent with marketing guru Philip Kotler’s assertion made in his numerous articles and text books that nonprofits have an organisation-centred mindset rather than an outward ‘market’ or constituents focus.
The key challenge: managing two kinds of ‘customer’
In regular businesses, profit is the obvious motive and the customer rules. For nonprofits, however, there are two ‘markets’ or ‘customers’: the people charities assist, who usually do not pay for services, and those who fund its activities, driven by altruism.
Another interesting thing about marketing, as Kotler has noted, is that all organisations engage in it whether they realise it or not. If you are already doing it, you might as well do it properly! Below are Kotler’s initial suggestions to help introduce marketing into your organisation:
1. Appoint a marketing committee
2. Organise task forces to carry out an institutional audit
3. Engage specialist marketing firms when needed
4. Hire a marketing consultant
5. Hire a director of marketing
Critical questions to develop your “marketing orientation”
The following critical questions, also adopted from Kotler, can help your organisation consider and frame your marketing activities.
1. What trends are affecting your cause/situation (Environmental analysis)
2. What is your primary market? (Market definition)
3. What are the major market segments in this market? (Market segmentation)
4. What are the needs of each market segment? (Needs analysis)
5. How much awareness, knowledge, interest and desire is there in each market segment concerning your organisation? (Market awareness and attitude)
6. How do key publics see you and your competitors? (Image analysis)
7. How do potential clients/customers learn about your organisation and make decisions to engage your services? (Consumer behaviour)
8. How satisfied are current customers? (Consumer satisfaction assessment)
1. What are your major strengths and weaknesses in capabilities, programs and facilities? (Strength/weakness analysis)
2. What opportunities are there to expand your financial resources? (Donor opportunity analysis)
1. What businesses are you in? (Business mission)
2. Who are your customers? (Customer definition)
3. Which needs are you trying to satisfy? (Needs targeting)
4. On which market segments do you want to focus? (Market targeting)
5. Who are your major competitors? (Competitor identification)
6. What competitive benefits do you want to offer to your target market? (Market positioning)
Professional marketing has arguably been the last formal management discipline adopted by nonprofits. But the need to sustain operations – particularly when more charities are vying for donor dollars – would be better met by a fuller understanding of the true definition and function of marketing as well as introduction of formal marketing skills, resources and functions.
Lawrence Jackson has over 14 years experience as a social marketing, fundraising and philanthropy professional. He is the principal of Catalyst Management, a not-for-profit and corporate social responsibility consultancy. He has worked with organisations such as The University of Sydney, Vision Australia and the Royal Institute for Deaf and Blind Children.