Recently, I have talked with two small businesses which are linked to social or charitable organisations. In one case, the aim of the business is to drive revenue for the charity. In the other, the social purpose is partly designed to generate leads for the business.
It is not unusual for a charity to run a business or to have commercial goals. Oxfam have a highly successful chain of second-hand book stores and Barnardo’s run vintage furniture stores. Comic relief own and commercialise the intellectual property rights to the PG Tips monkey. In all three of the above examples, these activities are run as commercial businesses with professionally trained managers. These businesses are run on commercial lines with the profits benefiting the charity. The idea of the charity shop run by enthusiastic volunteers with little or no business experience is a worn out cliché.
However, there are several prominent challenges which face individuals who wish to market a charitable enterprise beyond those experienced by purely commercial enterprises:
- The nature of the target audience: For a commercial business, marketing activity is focused on consumers of the offered product or service. Non-profit organisations need to market to a wider group of stakeholders including; public bodies such a local authorities; potential donors, sponsors and volunteers; commercial customers; beneficiaries of the charities fundraising or services; and celebrity advocates. A marketing strategy designed to maximise commercial profits may not sit well with other stakeholder groups and the non-profit organisation may have to develop a differentiated marketing strategy which emphasises different aspects of their work to different stakeholder groups. Having multiple target audiences makes it more difficult to develop strategies which satisfy both commercial customers and charitable givers.
- Incompatibility between commercial goals and attempts to change behaviours: Charities and non-profit organisations often have the goal of changing social attitudes or face tackling taboo subjects. Running commercial income generation schemes may directly oppose such goals and make the collection of accurate data more difficult.
- Often the benefits of a non-profit enterprise are difficult to derive. Rare illnesses or conditions such a high blood pressure may be invisible to many in the general population and it may be difficult to achieve ‘cut-through’. Attempts to change behaviours may have positive reinforcing outcomes with the public but equally those outcomes may be negative. A non-profit organisation promoting a cause which may result in little benefit to the majority of the population may find it difficult to run a commercial arm.
- Consumer indifference: Consumers may find it difficult to contribute to causes to which they are indifferent or where they see no personal benefit.
- Target audience attitude: The target audience of a non-profit organisation may be required to make a 180 degree shift in attitude if the organisation’s goals are to be met. For example, the elderly may not wish to accept their increasing infirmity.
- Adaptability of Product/Service: In the private sector, a product of service may be adapted to suit different customer groups. For example, pocket calculators were originally designed for engineers and scientists but were adapted to meet the requirements of other groups such as schoolchildren. Altering your offer in the charity sector in such a manner may be much more difficult. If you cannot alter your ‘product’ much more pressure may be placed on the other parts of your marketing mix e.g. price or promotion.
- Target Audience: The target audience for your services may not be able to understand your message or your ability to promote your services may be limited. For example, if you are trying to raise AIDS awareness in Africa your intended audience may be illiterate. There may be cultural or traditional barriers to your work. For example, in developing countries there may be strong beliefs and reliance on traditional healers. You may need to change widely held beliefs for your organisation to succeed.
- Intangible Benefits: If the benefits of a charity are intangible, it may be impossible to express them in traditional media presentations.
It is clear that traditional marketing theories and practices can, and are, used by charities and non-profit organisations but in planning your marketing strategy, the above challenges must be at front of mind. Only then can such marketing activity succeed.