Dr Brian's SmartaMarketing 2

Smarta Marketing Ideas for Smarta Marketers

Category: Not-for-Profit

The Benefits of Socially Responsible Branding

Adding Cause to Branding

The benefits of being perceived to be socially responsible are varied and many. Understandably brands want to be perceived as socially responsible. Being associated with a good cause is a quick way for a brand to be gain the tag of being seen as ‘socially responsible’. This shows the brand to be responsible and caring and these are indeed good qualities for a brand to have. While some brands are inspired by a genuine sense of social responsibility many brands look at the image of being socially responsible as helping in building brand stature. The conscious employment of resources by a brand to aid charitable causes in order to develop image, associations and identity benefits is called cause related branding.

There are 5 main reasons why brands associate with charitable causes other than from a socially responsible perspective:

Builds brand preference: Marketing sense states and some research studies confirm, that ceteris paribus, consumers would prefer buying a brand that is associated with a good cause than from other brands.

Justifies a premium: Consumers often do not mind paying a premium for a brand that is known to be generous to a well-known charity as consumers feel that the brand deserves the premium. The knowledge that a part of the money paid to a brand is going to a good cause adds to the positive emotional component of the brand.

Reduces negative connotations associated with the brand: Liquor and tobacco brands often associate themselves with causes as a means of negating a part of the disrepute associated with their industry.

Provides the brand with desirable values: Brands that are seen to possess a very commercial and greedy image may wish to develop a softer image by showing a softer nicer side by donating to charitable organizations.

Useful for raising money: Brands that plan to approach the money market for raising money from the public often show the warm side of their personality by publicly supporting charitable causes. Investors who are not doing extensive research on the brand may invest because they believe a brand with good intentions can be trusted.

As is obvious from the advantages mentioned above, cause related branding has a lot to offer brands and therefore this route is being used by many brands. There are several successful examples cause related branding working wonders for brands it must be understood that a poorly developed cause strategy will lead to no little or no benefits for the brand. The days when a brand could merely tie up with a well-known charity and earn brownie points are over and the intricacies involved in making cause related branding work are worthy of careful consideration.

In branding, adopting a strategic perspective is critical. In cause related branding it becomes even more critical as the process of establishing an association with a cause takes significant investment of time, effort and money. Reaping the benefits of the association takes time and delinking from a cause can have strong negative repercussions for a brand and the involvement of the highest echelons of management need to be involved in decisions involving cause related branding.

There are three levels of decisions that brands need to look at and the implications of each category of decisions is to be understood before planning for any kind of cause related branding:

Deciding the category: There are a wide range of categories of causes ranging from care of deprived children to restoration of dignity of seniors. Categories are wide and can encompass a wide range of sub categories. Within the cause category of care for senior citizens there are sub categories addressing issues such as care for abandoned elders, medical treatment of senior citizens, etc. It is important to choose the right kind of category and sub category as a prelude to deciding a relevant issue to back within this category.

Deciding the specific issue: Categories of causes consist of different issues. Issues are specific such as programmes to aid restoration of dignity of senior citizens that feel deprived of dignity following their old age. Focussing on specific issues is important for brands as it helps fine tune the values that flow from the association.

Deciding the specific institutions: Unless the brand is willing to create a trust that handles the responsibilities of the cause it will have to depend on institutions to run the operational aspects involved in the execution of cause related activities. Aligning with an institution that caters to a specific cause can provide a brand with strong associations however there are times when brands need to ensure that they are not overshadowed by charities that are stronger brands than their sponsors.

These are some of the aspects that need to be studied before a brand decides to associate with a charitable cause.

What is the relevance of the cause to the brand’s consumer segment?: Association with a charitable cause does not immediately mean that consumers will immediately hold the brand in high esteem. Consumers must find the cause relevant to their value system before the brand receives any approbation. For example: Not all consumers may be equally supportive of a cause that looks at providing food and shelter to immigrants/refugees. These consumers may be more supportive of causes that benefit their countrymen.

How different is it?: Many people are inured to causes and even associations with a good cause like Cancer Care may neither draw much attention to the brand or to the cause nor would the association be very memorable. Finding a cause that is relevant and yet different would help in enhancing the memorability of the brand and cause. For example: A trust that looks after veteran entertainers suffering from terminal diseases can be seen as a worthy cause to support as it appreciates people who once entertained and gave others happiness.

Can the cause be owned?: It is normally difficult to own a cause as this would require immense investment of resources. A niche cause like the one mentioned in the above example may not require huge investments and may not see many other brands supporting this cause. The task of guarding the cause associations may not be very tough nor may the cost of running such a trust be very high.

Will it hold enduring relevance with this segment?: Some causes are contextual. These causes appear to touch a sensitive chord with consumers and then suddenly seem to lose their appeal. Often charities in India catering to cyclone victims suddenly find their support waning in the wake of a fresh new tragedy in a different part of the country. Public sympathy often veers towards the more current tragedies.

How will the relationship be positioned?: The nature of the brand’s relationship with the cause can influence consumer perceptions of the brand. A brand that extends it relationship beyond the financial support to also provide investments of time and talent would most likely stand to gain greater credibility from the relationship than would a brand that only provides money. Brands that appear to only offer financial support may be seen as ‘forced’ or ‘insincere’ and this could in some cases prove counterproductive.

Controversial issues: Brands need to be careful while handling causes associated with controversial issues. For example: A ‘euthanasia’ support foundation campaigning for change in legislation towards euthanasia may be seen by some as a worthy cause but association with this cause may lead to the brand supporting it being embroiled in controversy at some stage of its association if public opinion suffers from the occasional mood swing. While some brands court controversy through short term associations with controversial causes this could be risky as well as counter productive as the issue could turn ugly and taint the brand or it could grow far bigger than the brand.

Cause related branding works best when it is driven by the core values of the brand. Like anything else that is forced, cause related branding could prove counterproductive if it is not a ‘natural’ facet of the brand. When it is not ‘natural’ to the brand then the cause related activities are de-prioritised and lose focus often with corresponding effect on the brand.

In an increasingly cynical world, the value of genuinely sensitive acts is extremely high. There are several cries for brands to show greater responsibility and to share a small part of their wealth with the less privileged. The current economic strife created by schizophrenic brands that show dissonance between their different actions has led to lower levels of consumer belief in brands. Cause related branding performed with genuine intent can help restore consumer trust and build brand equity

Like this short article?  Please comment.  And have a look at other articles  in our sister blog http://smartamarketing.wordpress and checkout the smartamarketing posts on SlideShare. (http://www.slideshare.net/bmonger)

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(Really) Valuing Customer Feedback

Brian Monger

The biggest obstacle to knowing what customers really think about us is fear.

Many fear what their customers will say so the don’t ask and run from real feedback that appears to be critical.  This is very apparent in the way many firms think of  Social Media

We fear they’ll tell us our product stinks, and that we’re horrible people

Yet most organisations never hear that type of painful feedback. Successful organisations with strong word of mouth and customer devotion use customer feedback to drive their marketing strategies, product development and customer service expectations.

The less successful approach is to proactively gathering customer feedback or waiting for it arrive on its own. Research firm TARP has found that for every person who complains, there are 26 who do not. That means if you have 1,000 customers and 100 of them complain, another 260 may have quietly dumped you, never to call again. To know what customers are thinking, you need to ask.

Organisations that operate as feedback machines make improvements to their operations quickly and efficiently.

10 Rules:

1. Believe that customers are not fools and possess good ideas

How often does someone in your organisation respond to an innovative idea by saying, “Our customers don’t want that.” Asking customers to participate in your problem-solving and idea generation is not an act of weakness.

2. Gather customer feedback in every situation and at every opportunity

Every customer interaction is an opportunity for feedback.

3. Focus on continual improvement

As Peter Drucker once said, a business has two purposes: marketing and innovation. Enlist the aid of your highly affiliated, passionate customers to help you improve your business.

4. Actively solicit good and bad feedback

Try asking “what is the one thing you would change or improve about your experience with us or our product?”

5. You do not have to spend a lot of money doing it

Short, regular surveys deliver better response rates and allow you to react rapidly to issues raised. Solve one or two problems at a time, not everything at once. Tell your customers how their feedback directly contributed to your changes.

6. Seek real-time feedback

Call 8-10 customers every day.   (this takes some skills – I can help you get them)

7. Make it easy for customers to provide feedback 

Employ multiple input points: in person, email, Web sites, point-of-purchase cards or receipts, conferences and the telephone.

8. Leverage technology to aid your efforts

Programs like SurveyMonkey.com makes it very easy to gather feedback via a Web-based survey. It (among others) is fast, efficient, and inexpensive. It automatically tabulates data and doesn’t require a techie to launch. Your data is virtually complete within 48 hours of sending customers a link to the survey.

9. Share customer feedback throughout the organisation

Responsibility for customer feedback extends beyond the marketing department. Ensure that everyone in the organisation knows what customers are thinking by sharing customer feedback; product and service decisions will be better informed as a result.

10. Use the feedback to make changes – quickly

You may not be able to move a mountain in a day, but you can make it easier to climb by making a path.

How Well do you Know your Customers?

How well do you really know your customers?

Doyou know the answers to these questions?

— What is really important to the customer?

— What is the customer’s connection with the product?

— What does the customer really want?

— How are customers motivated to buy?

— How do customers talk about the product?

To achieve successful differentiation in the marketplace, the complete picture must be captured.

The key is to understand the customer (their wants, needs, motivations, emotions and values) and evaluate the marketplace (looking for gaps, opportunities and unmet wants and needs) before embarking on the development of a new product concept or product extension.

Understanding the voice of the customer

Understanding your customer means understanding the your offer (product – both goods and services) through the consumer’s eyes — this means placing more emphasis on the consumer’s words than the opinions of management, R&D, engineering, marketing and all other “internal” folks.

Understanding is accomplished by:

  • focusing on root wants/needs/benefits of usage; and
  • understanding consumer language.

Understanding what your customer seeks as the important benefits

Understanding root benefits resides in the following questions:

  • What need(s) does the customer wish to fulfill with the product?
  • What problem is the customer attempting to solve through use?
  • What benefits does the customer wish to receive?

Developing Marketing Strategies for Not-For-Profit Services

Dr. Brian Monger

The process of developing strategies in the not for profit sector are the same as those for services in the profit sector, identifying opportunities, defining target segments, positioning the service, developing a marketing mix, and evaluating and controlling service delivery.

Identifying opportunities for not-for-profit services

Research of not for profit service organisations customers’ (described alternatively as donors, subscribers, or contributors) and non-customers will often reveal potential new services for attracting additional revenue. For example, not many people were aware of the Sudden Infant Death Syndrome (SIDS) until Red Nose day was launched

Define target markets for not-for-profit services

Not for profit organisations must identify target segments for their efforts, from the standpoint of identifying both clients and donors. Thus, schools and universities identify donor targets from their alumni list based on income, age, and past history of donations.

Target Segments

Various segments exist in the not-for-profit organisation’s target segment. They all exchange a “payment” to receive the organisation’s value offering. One typical Target segment is contributors – those individuals and organisations who supply funds to the organisation. The contributor’s objective is to help the NFP organisation complete its mission rather than to consume the primary service offering. In general, they exchange donations for some sort of psychological return (like feeling good)

Positioning not-for-profit services

The importance of positioning services in the not for profit sector can he seen in recruitment advertising for the armed forces.

Marketing mix for not-for-profit services

Like other service firms, marketers of not-for-profit services must develop a mix of brand, advertising, distribution, and pricing strategies to attract funds and deliver services to clients.

Brand identity

The Red Nose campaign conducted by SIDS has, effectively, given this appeal a brand identity, symbolised by the red noses worn by people and attached to motor cars. This branding has created high community awareness of SIDS and a focus for the fund-raising activity.

Advertising

Advertising is used by not for profit organisations to influence both donors and clients. Given decreasing government funding, a number of not for profit organisations public service advertising (see Chapter 17 )and direct-mail for attracting sponsorship, contributions, and donor funds.

Personal Selling

Not for profit agencies use personal selling to attract funds from larger donors. Personal selling is most effective where there is a concentration of donors, such as corporate sponsors. Many NFP’s employ business managers, whose main role is to attract funds. These business managers frequently call on key organisation executives to negotiate sponsorships and other types of donations.

Distribution

Unlike for profit firms, distribution strategies for not-for-profit services are usually directed to both donors and clients. Increasing the number of locations where donations can he made can stimulate contributions.

Pricing

Most not for profit firms do not expect to do more than recoup costs, if that. For example, most of the social agencies provide free or low-cost services which are subsidised by grants and their fund-raising activity.  Not for profit organisations must also take account of the other investments incurred by their users. This can include waiting time, inconvenience, discomfort, and the psychological costs involved. Minimising such costs helps to attract more customers.

Production or Sales Orientation

The nature of NFP organisations often results in a strong production orientation because social marketers tend to have strong beliefs in the righteousness of the cause. Not-for-profit organisations stand to gain by being consumer oriented instead of production or sales oriented.

Marketing for Not-For-Profit Service Organisations

Brian Monger

The emergence of organised marketing efforts in not-for-profit organisations deserves special attention.  Marketing principles are applicable to both profit-seeking and not-for-profit organisations.

Not for profit institutions represent a significant part of our economy. The not for profit sector accounts for over 20 per cent of GDP in Australia. There are over 100 000 not for profit organisations in Australia.  Institutions such as universities, museums, charitable organisations, cultural centres and religious institutions are not motivated by profit-maximising goals in providing services to the public.

The nature of not-for-profit services

Types of not for profit organisations:

  • Cultural (for instance, museums, operas, and symphonies).
  • Knowledge oriented (universities and colleges, schools, research organisations).
  • Philanthropic (foundations, charities, welfare organisations).
  • Sporting and recreational organisations
  • Social causes (environmental, consumer, feminist groups).
  • Religious (churches and religious associations).
  • Public (city, state, federal services; quasi-governmental services such as Australia Post and the various state instrumentalities such as for electricity, gas and water).

Slow acceptance of marketing in NFP organisations?

The reality is that not-for-profit organisations (like everyone else) have used marketing for centuries.  Charities have sought donors and sponsors, politicians have tried to sell their ideas universities have actively tried to recruit students, and foundations have sought out appropriate causes. These activities differ from marketing only in the terminology used. Theatres might speak of “audience building” not “promotion to increase sales”.

There has been a tendency by many not-for-profit organisations to eschew “marketing” because of its traditional association with a “commercial” profit motive. In avoiding the use of marketing theory, these organisations also forgo the benefits they might gain – customer orientation, integrated strategies, long-term thinking, and better performance and funding.

The emergence of a marketing orientation

Many not for profit organisations have adopted marketing techniques and have employed marketing managers or business managers to both attract funds and sell their services. Charitable organisations such as the National Heart Foundation use advertising to create community awareness of the dangers of heart disease and the Royal Guide Dogs Association uses direct marketing techniques for revenue generation.

Difficulties in marketing not-for-profit services

Developing marketing strategies for not-for-profit services can be difficult because of several characteristics of such services.

First, non-profits market to multiple publics since they must attract resources from donors as well as allocate resources to clients. Marketing to donors is different from marketing to customers.

A second characteristic of non-profits is the use of multiple exchanges of resources in dealing with donors and clients. Charitable organisations must deal with individuals, corporate contributors, and government agencies in trying to attract funds. They then have to allocate funds to projects ranging from public education campaigns, research and patient welfare.

A third characteristic of not for profit companies is that they are more likely to he influenced by agencies such as governments, lobbyists and other publics than are organisations with a profit centred focus.

Another reason it is more difficult to market services in the not for profit sector is that many not for profit organisations are trying to change people’s behaviour by selling ideas, such as trying to influence people not to drink and drive (TAC), not to drop litter (‘Keep Australia Beautiful-). Such goals are beneficial to society, but represent either inconvenience or added cost to individual consumers. Trying to convince people of the dangers of smoking, drinking, or drug abuse is difficult because these actions are often habitual, and, a marketing strategy is more likely to be effective when it reinforces current behaviour than when it attempts to change it.

Finally it should be remembered that some NFP marketing strategy has meant cannibalisation of other NFP orgs. The problem in getting the consumer to choose “us” sometimes means others NFP’s loosing market share (OK in the commercial world but harder in the NFP sector?).

NFP support is created through understanding what the market wants and feels and being able to give it to them.

Still another difficulty in marketing not-for-profit services is that what they have to offer is often more vague than services for profit. The benefits of air travel, telecommunications, or bank services are easier to convey than the benefits of religion, culture, or knowledge. Often the level of awareness of the activities of not for profit organisations is often low.

Finally, marketers of not-for-profit services may find it harder to control their promotional campaigns. In many cases, not for profit organisations must use space and air time that is donated by media and thus have no say as to when their ads will be shown or heard.

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