Tips on Using Marketing Theory to Stabilise and Grow your Income

Olof Williamson was a Senior Consultant at NCVO, looking at the latest thinking on funding, finance and public services. Olof has left NCVO and his posts have been retained for here for reference.

On 21 September we launched our exciting new publication The Art of Raising Money: using marketing theory to stabilise and grow your income.

After the launch I caught up with the guide’s author Professor Ian Bruce CBE to talk about how marketing can be used for income generation in voluntary and community groups.

Getting started

First of all, I asked Ian how to get started in raising new income using marketing techniques:

Ian_Bruce_2Ian: “Professional charity fundraisers have been using marketing for several decades, but it is still a new thing to apply marketing to the wider concept of income generation.  However, it is very helpful to use marketing in all the different income streams such as gifts and donations, grants, contracts and trading.

“First of all you need to get an idea of how desperate the need is to generate more money.  Establish whether your colleagues, board etc are inherent optimists or pessimists – they might tell you they are desperate but actually have healthy reserves in the bank.  Or they might be fairly relaxed while the organisation is slipping into an ever-more perilous financial state.  If you and other responsible people internally regard the situation as desperate then the best action is to consider where costs can be cut before you begin to bring in more income. This is simply because it takes time to raise more income.”

Quick actions

So once you’ve decided you need to raise more income, what can you do to quickly bring in money?

Start_pic_small2“The quickest way to bring in new income is to do more of what you already do well.  If you have good relationships with regular donors, try to enhance those to bring in more.  If you are selling a successful product to a local authority, you could expand it to cover more people in the area.

“From a marketing point of view, this means you are working with your existing product and market.  It’s tempting to dive straight into developing entirely new products in an exciting new market, but this is the more risky strategy in the short term.  Stick with what you know, at least initially.”

Realising your relationships

If you are working with your existing funders and customers you may feel there is not much more you could do with them to generate income.  How can you make the most of existing relationships without overdoing it?

Handshake_2_0“This is where relationship marketing comes into its own.  This means creating stronger bonds between your funders and your organisation.  The highest level is the social bond – invite funders to see your service in action, help them meet some beneficiaries and make them feel valued by you.  For social enterprises working with customers, make them feel part of a group, and that they are getting more than just the service from you.”

Knowing your customers

And for people who have already done lots of marketing in the private sector, what is the main thing that is different when you’re marketing in the voluntary sector?

“The biggest difference is that in commercial marketing the person who pays is normally the same as the person who consumes.  In non-profit marketing the person who funds the activity is often different from the person who consumes.  That means you are dealing with two different customers and they both have different needs and wishes that could be in tension.  Having good relationships with both is vital to resolve these tensions.”

 


The_art_of_raising_money_2_copyRead more like this:

The Art of Raising Money: Using marketing theory to stabilise and grow your income is available to purchase from NCVO

Professor Ian Bruce CBE is President and founder of the Centre for Charity Effectiveness at Cass Business School, London.

Online Resource

CASS Business School’s Centre for Charity Effectiveness also manages Knowhownonprofit, the online place for nonprofit people to learn and share what they have learnt with others.

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