Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Social Enterprise Marketing Presented by: Sutia Kim Alter Virtue Ventures LLC

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Social enterprise turns the traditional social service model on its head! Major cultural shift from “need and handout” to “want and buy”

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 What is a Market?

Market All the people who have a specific need or want and are willing and able to purchase service or product to satisfy that need.

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 What is Marketing?

Marketing Planning and executing strategies to reach customers.

SE Marketing Considerations Educational marketing or outreach Market development Barriers to reaching clients through traditional marketing vehicles: Literacy, language, location, topography, etc. Communications /PR efforts to educate internal/external stakeholders impacted by SE: Community, donors, public, etc. Budget and time constraints Who pays

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 What are Market Forces?

Market Forces All things outside of your control that can influence your enterprise: Weather Politics Economy Competition Infrastructure Suppliers & buyers Law Technology

Market Research Social Need & Market Failure Social problem enterprise is trying to mitigate People impacted by social problem Opportunities Barriers Industry dynamics Demand Market Segments & Size Trends Competitors

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 When are you finished with market research?

Never…. Need system for listening & taking action to feedback Market Enterprise Customers and markets are dynamic

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Best way to really learn about your market?

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Start selling something Test market

What Scojo learned…

Marketing Plan Target Market Objectives Marketing mix: 4 Ps Product Promotion Price Place Sales Plan

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 “I don’t know what the key to success is, but the key to failure is trying to please everyone.” - Bill Cosby Target Market

SE Customer can be Confusing! Social Enterprises have several stakeholders they often view as “customers.” Clients are “beneficiaries” of social enterprise services or social impact. Target market are those buying social enterprise products and services.

Market Segmentation Social enterprises may have several customer levels

Know your customers Their wants Preferences Likes and dislikes Habits Lifestyle Demographics … ALL the things that motivate them to make a purchasing decision

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 What’s in a name? Identity Imagine Identity Imagine

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Your marketing message is not your mission Why will a customer buy your product or service more than once?

Marketing message Should motivate customers to purchase your product or service. The promotional message can emphasize particular benefits: “Convenient one-day service” “Always fresh” A message can also exploit a market niche: “Serving Washington Area New Mothers" It can also be more subtle, triggering a customer's emotions or self-image: “Entrusted senior care professionals” "You deserve a break today” “Peace of mind for you and your family”

“Baking with a difference” All-natural bakery products from scratch. We mix small batches of fresh, premium ingredients and finish each product by hand to create irresistible desserts. Rubicon stands for more than fabulous desserts: we are part of a nonprofit organization, Rubicon Programs, that helps individuals in the San Francisco Bay Area overcome economic and social hurdles. Rubicon provides training, housing, employment and support services to people in need. You can feel good about buying Rubicon products because you in turn support your community.Rubicon Programs

Objectives linked to strategies Objective Marketing Strategy Mix Increase market share in X county by 5% in first 1st quarter. Introductory membership to X county residents for 25% discount Price Reach 200 new families in Vietnamese community in 2007 Launch culturally appropriate Vietnamese language translation clinical practice Product Expand clinical services to Y & Z rural areas including A,B, C border towns Introduce mobile clinical unit which will circulate along border Place Increase infant immunization 25 % among immigrants babies. Aggressive multi-lingual campaign using flyers, and community information meetings to encourage immunization. Promotion Example: Community clinics for un/underinsured

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 One objective MUST be a sales target—units and/or $ Marketing objectives are aligned with social mission and financial objectives

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 "Cheat me on the price but not on the goods." — Thomas Fuller Product Strategy

Product Market Matrix Income related to Social Service Medium mission relevance; medium risk Income related to Social Service Medium mission relevance; medium risk Income from extension of Social Service High mission relevance; medium risk Income from extension of Social Service High mission relevance; medium risk Existing Product Existing Market New Product Existing Market New Product New Market Existing Product New Market Income from Social Service Highest mission relevance; lowest risk Income from Social Service Highest mission relevance; lowest risk Income not related to Social Service Low mission relevance; High risk Income not related to Social Service Low mission relevance; High risk

Customers buy benefits Community Clinic Cooperative Rural Pharmacy

Product Lifecycle         Try Brand Differentiate Reinvent or kill Reinvent or kill Sales Time

How does your product stack up?

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 The codfish lay 10,000 eggs, The homely hen just one; The codfish never cackles To tell you what she's done; And so we scorn the codfish, And the homely hen we prize. Which demonstrates to you and me That it pays to advertise. - Toronto Globe Promotional Strategy

Promotional Vehicles Print media Broadcast media Direct mail Tradeshows Merchandising displays Gifts & premiums Special offers Billboards Information meetings Public relations Telephone directory Brochures Posters/Flyers Cross-selling Referrals Personal sales Informal marketing Web

#1 Marketing Vehicle

Promotional Plan

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 "When it comes time to hang the capitalists they will compete with each other to sell us the rope at a lower cost." - Vladimir Lenin Price Strategy

How much will you charge? “Price Ceiling” “Price Floor”

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Most common price strategy challenge for a social enterprise?

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Inability to pay

Break even 0 0 Sales & Costs # of Units Sold Profit Loss

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 Understand the REAL cost of your services income = revenue Understand how you might be subsidizing your price Use subsidies wisely

Subsidies Years Enterprise Revenue Social Expense Business Expense Breakeven AFTER Social Costs Breakeven AFTER Social Costs Breakeven Before Social Costs Social Subsidy Enterprise Revenue Subsidizes Social costs Enterprise Revenue Subsidizes Social costs Profit For biz & program investment Profit For biz & program investment

Employment SE Subsidies Volunteer time ED + time on SE Wage premium Wastage Lower employee productivity Time spent on employee personal problems/social programs Higher insurance rates Supervisory staff (i.e. job coaches) turn over Time for SE fundraising

Social Enterprise Conference October 30-31, 2006 Social Enterprise Conference October 30-31, 2006 "If you can't reach your customers you can't stay in business." - anonymous Place (distribution) Strategy

SE Distribution The place (distribution) strategy articulates how you will get your products or services to your customers. Distribution strategy is often a key for social enterprises that serve clients with barriers to ACCESS: Markets Healthcare Jobs Information

Distribution - Eyeglasses

SE Marketing Pitfalls Confuse marketing message and mission Failing to assess demand Assuming customer loyalty can be built on social good instead of quality Build it and they will come – failure to market Lack of operational capacity/acumen - inability to deliver on basics Failure to listen to customers/watch the market & incorporate feedback Inappropriate marketing vehicles for reaching customers Confuse “payer” and “user” Confuse clients and customers

SE Marketing Practice Creative/unconventional marketing approaches Take business to clients – emphasis on distribution Price and payment of services based on clients’ abilities to pay or third party payer Quality, Consistency, Reliability are king Brand Test market new products Vigilant about setting price Keep your eyes on the prize Flexibility and responsiveness Social benefit + Mission leverage in other marketing