Marketing is the Mission: Marketing for Tax-Exempt Organizations

So what is Marketing? 

Many people view Marketing as advertising…making Leprechauns jump out of soap or a Junior Darth Vader win the Super Bowl. Others associate Marketing with selling …going viral with a pet rock on You Tube, or getting hot deals on used cars from some really nice salespeople!! And some simply think of Marketing as a day at the grocery store.

But Marketing is far more than advertising and sales, and using the best practices and tools of marketing can be just as effective for tax-exempt organizations as it is for large corporations. 

Not for Profit Development Departments use highly sophisticated marketing tools to identify, qualify, and reach target donors.  But marketing can and should be leveraged by your whole organization to support your core mission. It’s the job of everyone, starting with the Executive Director, and including the employees delivering the service, and even the receptionist who sets the initial tone of your organization to your clients.

Marketing consists of a suite of business tools, ranging from market research to competitive positioning to buzz marketing to social media, many of which can be used by your organization.

But most of all, Marketing is a Core Business Value, a leap of faith, a firm belief that if your organization excels at serving your customers, you will thrive.

Marketing can be broken down into Five Key Marketing Processes:

• Strategic Marketing
• Driving Revenue and Utilization
• Retention and Customer Loyalty
• Product and Service Development
• Channels of Distribution

Strategic Marketing

One definition of Strategic Marketing is “structuring the organization to excel at meeting the needs of our target customers”.  “Structuring” implies a proactive design by management and the board.  The architecture should be designed to excel, to be the best at meeting target customer needs.  And that implies really knowing what those needs are: really listening, formally listening via surveys and focus groups.  But it also provides a means to be the best, and that means a laser focus on your target customers.  If you focus, through specialization, you can be the best…effective and efficient.

Choosing your target market is critical.  How wide or narrow is the scope?  The specialization must be on customers, not your services.  My good friend had a terrible ski accident leaving him a quadriplegic.  He had to go through ten or more agencies to assemble the services he and his family required to serve his many needs.  Boards and Executives do have a choice in designing their organization.  Choose a direction in which you can win, and structure your entire organization to win that particular game of serving your specifically chosen target clients.

A recent Harvard Business Review Article by Bradach, Tierney and Stone looked at The Rheedlen Center for Children and Families in New York City, which provided services to seniors, the homeless, and children.  They narrowed the focus of their mission to the 3,000 children, from birth to age 18, living in the area, with the goal that these specific children should have demographic and achievement profiles consistent with those found in an average U.S. middle-class community.  They changed their name to Harlem Children’s Zone, dropped their seniors and homeless programs, and have grown from a $7 million budget serving children in 24 blocks to a $75 million budget covering 100 blocks and over 10,000 children.

So who are your customers?  Your users?  What about donors?  Is your community your customer?  How about your State government?  One of the key challenges in the tax-exempt world is that you really need to look at all of these when making your choices.  For instance, if you view the government as your customer, you may choose to go into the outsourcing business, structuring your program to excel at meeting that government’s agencies’ specific needs, resulting in winning a contract to privatize their services.

Driving Revenue and Utilization

Driving revenue and utilization is a marketing process, and will be critical as revenues from the government decline.  Traditional tools like advertising and direct sales are often too expensive for narrow markets, so small to mid sized tax-exempts need to consider turning to guerilla marketing techniques.

An agency serving the teen population with multiple services was trying to increase utilization, seeking referrals from coaches and teachers, and paying “influencers” to hang out in video arcades.  Yet a careful evaluation of the organization showed that they had plenty of clients, but most clients were only using one of their many services.  A cross-selling program was a cost-effective way to drive more revenue.

Another agency is now investigating using valet parking, as the lack of parking is a barrier to clients using their services.  Managing the appointment function can be key if no-shows are an issue.  Streamlining provider paperwork can add capacity, which can increase billings and utilization.  Do these actions sound like traditional marketing programs?  As long as you can profitably increase revenue and utilization, it can help you achieve your organization’s objectives.

Retention and Customer Loyalty

Customer retention and loyalty is a critical marketing process.  It’s harder to fill the pond if you have a hole in the dike.  And if your client is not satisfied, are you fulfilling your mission?  Do you measure satisfaction and retention?  You may find that the best way to meet your utilization goals is to stop losing customers.  Do you have a formal quality process to assure that problems never reoccur, improving satisfaction and lowering significant costs of rework?

One loyalty strategy well known to higher education is affinity groups: make your client a “member”.  This is a core value of social media, and is particularly effective if your organization provides regular valuable information.  How often you “touch” your client can significantly impact retention.  The more services they get from you versus other agencies, the less likely they are to stray to the competition.  Good strategic marketing to assure you meet all relevant client needs is the foundation for retention and loyalty.

Product and Service Development

Developing new and improved products and services is a core marketing process.  Unmet client needs are your source for developing new or improved services.  A formal service development process will assure that your organization excels.  Look for where your customer has to make compromises, as these trade offs are an opportunity for breakthrough change.  For instance, if they now need to travel long distances for quality specialized help, a mobile unit may let them have their cake and eat it too!

The form of your service is only part of the product.  Quantity, time, and place are critical as we move to a 24/7 economy where clients want one stop shopping with services now distributed in the mall.  Subway is everywhere…even in Kmart.  Some profit-driven businesses may find your presence symbiotic, opening up your services to new clients in new venues.

Channels of Distribution

The final key marketing process is channels of distribution.  Channels can drive utilization and add value to the service.  Nursing homes have added senior independent living communities to channel clients into their nursing homes.  Effective homecare providers now bring the services that were once too costly back to the home, supported by mobile x-ray and testing services that help make that possible.  So channels help drive demand, and they also become an important attribute of the product itself.

Marketing IS your Mission

Executives and board members struggling to survive might consider leveraging these marketing tools.  Take a page from Harlem Children’s Zone, redefining your organization to excel and expanding with a rejuvenated business model.  With change, there is opportunity.  If you start with the client as king, your mission becomes more clearly defined, and your focus drives your effectiveness and efficiency.  Marketing IS your Mission.