Ian Bruce CBE, DSocSci President, Centre for Charity/Nonprofit Effectiveness, London Successful relationships with Donors and Beneficiaries - using Relationship Marketing 21 st Annual Lodestar Conference

How do we build successful relationships with Donors and Beneficiaries? Staged relationship marketing plan Tools Practical examples of how to use the tools Encourage you to identify your areas of interest and priority

What is relationship marketing? Charity/nonprofit relationship marketing is meeting customer needs and wishes through building a mutually beneficial long term relationships Bruce 2013

We can apply this marketing theory and practice to: Services Campaigning/lobbying/public education Fundraising

VOLUNTARY ORGANISATION CUSTOMERS Bruce: 2005

VOLUNTARY ORGANISATION CUSTOMERS Bruce: 2005

TYPE OF PRODUCTS GOODS SERVICES IDEAS

EMPOWERMENT – example of a beneficiary product Goods Idea Service Bruce: 2005

Fundraising proposition to a donor is fundamentally an Idea product The fundraiser takes the product or offering to the beneficiary and turns it into a fundraising idea product aimed at the donor and makes it as tangible as possible Bruce 1998

ProductCustomer (goods, (beneficiaries, services, supporters, ideas). stakeholders, regulators).

But how do you “sell” your product to your customer, be they donor or beneficiary? And how do you keep on doing so over the years? This where RELATIONSHIP MARKETING comes in “meeting customer needs and wishes through building a mutually beneficial long term relationships”

RELATIONSHIP MARKETING PLAN Establishing relationships Strengthening relationships And then maintain and develop through: Customer appreciation and recognition Relationship strategies

RELATIONSHIP MARKETING FOR DONORS AND BENEFICIARIES Establishing relationships (product, segmentation and targeting, people) Strengthening relationships (Market research, spotting problems and encouraging feedback, service recovery QUALITY) Customer appreciation and recognition Relationship strategies: financial, social and structural bonding (including memberships)

Strengthening relationships Reliability: consisting of the ability to perform the promised service dependably and accurately. Responsiveness: consisting of the willingness to help customers and to provide prompt service Assurance: consisting of the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy: consisting of the provision of caring, individualised attention to customers. Tangibles: consisting of the appearance of the physical facilities, equipment, personnel etc Berry and Parasuraman (1991)

RELATIONSHIP MARKETING PLAN Establishing relationships

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RELATIONSHIP MARKETING PLAN Establishing relationships Strengthening relationships

RELATIONSHIP MARKETING PLAN Establishing relationships Strengthening relationships And then maintain and develop through: Customer appreciation and recognition

..

..

..

RELATIONSHIP MARKETING PLAN Establishing relationships Strengthening relationships And then maintain and develop through: Customer appreciation and recognition Relationship strategies

..

..

Strengthening relationships Reliability: consisting of the ability to perform the promised service dependably and accurately. Responsiveness: consisting of the willingness to help customers and to provide prompt service Assurance: consisting of the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy: consisting of the provision of caring, individualised attention to customers. Tangibles: consisting of the appearance of the physical facilities, equipment, personnel etc Berry and Parasuraman (1991)

RELATIONSHIP MARKETING FOR DONORS AND BENEFICIARIES Establishing relationships (product, segmentation and targeting, people) Strengthening relationships (Market research, spotting problems and encouraging feedback, service recovery QUALITY) Customer appreciation and recognition Relationship strategies: financial, social and structural bonding (including memberships)

RELATIONSHIP MARKETING WILL BRING YOU MORE SUCCESS Action the points on the last two slides and beneficiaries and donors will give you More Loyalty More Support More staff and board satisfaction

RELATIONSHIP MARKETING WILL BRING YOU MORE SUCCESS Action the points on the last two slides and beneficiaries and donors will give you More Loyalty More Support More staff and board satisfaction

Thank You!

Two Schools of marketing, now merging? Transactional marketing Relationship marketing

MARKETING PERSPECTIVES –TRANSACTION vs RELATIONSHIP MARKETING Transaction Marketing focuses on maximum customer recruitment and satisfying needs in the transaction – created out of physical goods marketing (FMCG) Relationship Marketing focuses on customer retention and building a long term relationship – created out of the rise in B2B marketing and services marketing

The Non-Profit Marketing Framework Bruce 2005

How do customers judge service quality? ( Bruce, p 68) Reliability: consisting of the ability to perform the promised service dependably and accurately. Responsiveness: consisting of the willingness to help customers and to provide prompt service Assurance: consisting of the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy: consisting of the provision of caring, individualised attention to customers. Tangibles: consisting of the appearance of the physical facilities, equipment, personnel and communications material Berry and Parasuraman (1991)

So How does Non-Profit Marketing differ from Commercial Marketing? demand Sensitive issues Invisible benefits Benefits to 3rd parties Public scrutiny Multiple publics Limited budgets Huge expectations Strategy restrictions Culture conflict Often negative

Why are Non-profits not automatically Customer Orientated? Often are monopolies Demand outstrips supply Beneficiaries too weak to make their voices heard ‘haves’ can develop a patronising attitude towards ‘have nots’ professionalism and professional distance impact of belief action orientated, research a luxury consumer rights may be seen as alien to mission Concentration on too few beneficiaries, poor services to the masses amelioration can lead to acceptance of the status quo and that the beneficiaries’ predicament is their ‘fault’

Where are the target markets…. Who and where:- Beneficaries - users, the general public Supporters –advocates, purchasers, volunteers, donors Stakeholders – including the internal market Regulators – charity commission, Companies House, Health Authorities, Police

Other Player (Competitor) Analysis COMMERCIAL SECTOR STATUTORY SECTOR VOLUNTARY SECTOR INFORMAL SECTOR What is the key competitor Information that you need to Inform your marketing? How will you get this information?

Non-Profit Strategy Choices Market leader Market nicher Market challenger Market follower Kotler and Andreasen:1991

Non-Profit Positioning The sum of those attributes normally ascribed to it by the consumers – its standing, its quality, the type of people who use it, its strengths, its weaknesses, and any other unusual or memorable characteristics it may possess, its price and the value it represents. Harrison (1987),

8 Points Of The Non-Profit Marketing Mix PRODUCT (goods, services or ideas): consisting of quality features, name, packaging, services, guarantees. PRICE comprising price, discounts, allowances, credit. PROMOTION consisting of advertising, personal selling, intermediary referral, customer referral, sales promotion, public relations, coalition building. PLACE consisting of distributors, retailers, locations, inventor, transport.

8 Points Of The Non-Profit Marketing Mix PEOPLE consisting of personnel (training, discretion, commitment, incentives, appearance, interpersonal behaviour and attitudes) and other customers (including behaviour, degree of involvement and customer-to customer interaction). PHYSICAL evidence consisting of environmental factors such as furnishings, colour, layout and noise level; facilitating goods; tangible clues. PROCESS consisting of policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flow of activities PHILOSOPHY consisting of philosophy of the charity as a whole, and philosophy to be applied to the specific product