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The Contrasting Mindsets of Nonprofit and For-Profit Marketers

There’s generally a big difference between the skill sets of for-profit and nonprofit marketers. Quite simply, for-profit marketers aim to encourage people to buy. Nonprofit marketers encourage people to give– and those two things are pretty darn different, and these tasks often require contrasting skills and mindsets.

For-profit marketing is much more tried-and-true than nonprofit marketing and for some obvious reasons. Below are the circumstantial truths for-profit markets often rely upon in order to ensure success (or at least the likelihood of it).

 

In for-profit marketing, more often than not:

1. There is a set price for goods and services as determined by the market. For-profit companies set prices of goods and services relative to the supply and demand for a good. In other words, companies set prices at an equilibrium point where they can get the most amount of money for a good without losing business because the price is too high. Nonprofit donations, while they often tend to be tied to the health of the overall economy, do not have this set price (or a set “ask”). We can say, “It costs $125 to buy a costly college textbook for an aged-out foster youth,” but nonprofit marketers and fundraisers actually hope that individual donors give more money than that. In short, there is no fixed price to end individual transactions– making the transaction a tad more difficult to market in a traditional sense. Therefore, nonprofit marketing is often limited, as they cannot say “give us $100 dollars, and we will give you tangible good X.” … which leads us to point #2 below. By contrast, the amount of money pursued by nonprofit marketers depends upon knowledge of individual donors/donor base rather than market value of a good.

 

2. The actual goods are tangible and/or measurable: “I will give you product X for amount Y.” Often a private company is directly promoting a specific product or service (“buy this shampoo”), while a nonprofit organization aims to promote awareness of a social cause and through that, the organization’s individual programs (“alleviate homelessness by giving to our organization”). Because nonprofit outcomes are not always measurable, it creates a problem with the “X in exchange for Y” mentality that for-profit marketers bank upon when attracting customers. For instance, what’s the set price for curing cancer? Making a donation to a nonprofit organization means making a contribution to solving a bigger problem. It’s not a measurable, quick-fix exchange with customer satisfaction guaranteed. In fact, sometimes the donor doesn’t even directly benefit from the service provided by the organization– and even more contrary to for-profit marketer-mentality– that’s often the point. I would argue, however, that both sectors have the same aim when generally promoting their brand- but the promotion of the actual goods/services is different because what is being “sold” often cannot be quantified.  Nonprofit marketers must promote programs (often with unmeasurable social outcomes) through awareness of social causes.

 

3. Goods are purchased by a consumer, and for the consumer’s use. For-profit marketers can rely on the sexy concept of direct ownership which is a thing with extreme value in a capitalistic society. Take a look at traditional messages behind for-profit marketing campaigns: If you drink Gatorade, you could become an Olympic athlete. If you buy a BMW, you’ll be suave and sophisticated. Buy Proactiv, and you’ll have flawless skin like Jessica Simpson. Not even Wal-Mart’s roll-back prices platform translates directly to nonprofit organizations that aren’t selling consumer goods. Nonprofit marketing is different. Nonprofits are often tasked with marketing programs that benefit people who are not the donor. Of course, many nonprofits offer great perks and publicity for big donors, but that doesn’t often directly compensate for small-scale donations. Even folks donating to their own community centers face a free-rider problem that for-profit marketers don’t need to deal with in their message. Namely, even if you donate to an organization you participate in, the benefit you receive is still diluted among other community center users (the money doesn’t come directly back to you– see point #2). The key to nonprofit marketing? Telling stories, tugging heart-strings, making people care about something. Nonprofit marketers must appeal to donors by promoting goods/services that benefit people other than the donor alone.

 

4. One-way transactions are frequent- and they work. This section offers what I believe is the biggest fundamental difference between nonprofit and for-profit marketing: though it’s often the aim, for-profit marketers do not need to build personal relationships– often because it’s for-profit companies that sell things we need to buy like food and shelter. In fact, consumers would no doubt find it annoying to be very personally courted by their television, toilet paper, and fabric softener companies by name (how creepy). No doubt companies would invest more in building personal relationships if they could (and indeed, many do), but it would/does take a tremendous amount of resources on the part of the company. Thus, companies must prioritize– and, due to sector differences, for-profits and nonprofits prioritize these relationships differently. Most companies don’t need personal, two-way relationships in order for people to buy their products, and they can rely almost exclusively on building a trusted brand to make products and the company feel personal. In other words, for-profit marketers focus on one-way transactions; they state a price, and consumers buy the product at that price with minimal actual company interaction. Nonprofit marketers must also build a trusted brand, but conversation and relationship building are key to securing donors.  This difference lies at the very core of nonprofit verses for-profit marketing mentalities. To state it dramatically: a for-profit marketer will come off more like a used-car salesman if she or she  does not fully understand the way that relationship-building in nonprofits  function. Nonprofit marketers must facilitate two-way interaction between the organization and potential donors.

 

5. User experience with the good/service fuels repeat customers. Because consumers purchase a good or service from a for-profit company for their own use, the buyer is in a position to recall their experience with the brand and decide if they want to purchase the item/service again. In nonprofit organizations, donors are similarly more likely to give again if their first experience was a positive one. Considering that for-profit goods are usually measurable, for the user’s own purpose, and delivered for a set fee, a private company customer is in a position to buy again based on their perception of the good and how it meets their individual needs. Nonprofits must rely on the customer’s positive relationship with the organization (because the donor doesn’t always receive a tangible good that they can judge). What does this mean for the difference in nonprofit and for-profit marketing mentalities? For-profit marketers focus on the good. Nonprofit marketers focus on the cause and the relationship. Nonprofit marketers must think ahead of a one-time transactions, speak to bigger issues, and  put quality and care into two-way communications. In nonprofit organizations, experience with the organization fuels repeat donors.

 

Despite these differences, many similarities obviously still stand. Marketers in both sectors are promoters and benefit from being savvy in traditional marketing skills and methods (partnership, buying ads, tracking web stats, advertising, guerilla marketing, etc). While both nonprofit and for-profit marketers are promoters with the goal of enticing buyers/donors to award funds to an organization or company, the bottom line of what is being promoted is different, and thus the mentality and specific aims of these marketers must be different.

Many nonprofit marketers must be skilled in balancing both nonprofit and for-profit angles of marketing. Museum marketers and those working in other nonprofits earning commercial income from revenue-producing activity must be knowledgeable in both marketing skill sets. They are promoting both a social cause, as well as an excludable, rival good (like tickets to a nonprofit theater performance or museum entrance). Having a nonprofit marketing mentality certainly does not necessitate a lack-of for-profit marketing savvy and vice-versa. However, hiring managers should note– for the sake of their organizations– that the mentalities fueling both sectors are different in regard to marketing. If a marketing position requires knowledge of both types of marketing, then hire someone who can summon the proper skills set at the proper times. Resourceful marketing, after all, requires a strategic plan-of-attack. How wasteful it may be for a (previously successful) marketer with a for-profit background to step into a nonprofit organization and spend funds simply buying up excessive Facebook ads (one-way methods) when they should be on social media or connecting with potential donors in a more personal way (two-way methods).

Here’s a (maybe crazy) idea: as for-profit companies continue to evolve toward nonprofit-like practices and relationship-building increases in value to private companies, it just may be the nonprofiteers who are sought after for high-power for-profit positions across sectors.

Photo credits to issnaf.org (base image) and Hugh Macleod

Posted on by colleendilen in Branding, Community Engagement, Marketing, Museums, Nonprofits, Public Management, Words of Wisdom 1 Comment