Increasingly, successful nonprofit organizations are distinguishing themselves by how they have adapted to these four marketplace trends that are defining our times.
Customer ROI: Networking Is Valued but Not Enough to Maintain Member Loyalty
In every member survey of the hundreds I have overseen, the member benefit that always ranks as the most appreciated is networking. But this can give a false sense of security to organizations whose members know they can easily find networking opportunities with like-minded people online or with any number of self-organizing groups.
Membership organizations that do the best are those that have “stickiness,” meaning they offer their members products and services that help them advance in their careers. This could be anything from finding their next job to obtaining promotions in salary and responsibility. These organizations are less concerned about attracting and keeping members than tracking the return on investment they provide their members through metrics like sales and attendance figures.
This business-like approach of offering measurable market value is distinctly different from the club-like sense of belonging that previous generations of nonprofit organizations sought to project.
If nonprofits are succeeding in attracting customers then they know they are doing something right—and if those same customers figure out that it is less expensive for them to join as members than to continue to purchase at non-member prices, then so much the better. Membership sells itself in these nonprofit organizations, which provide valuable and unique services through transactions where ROI can be measured by both the seller (the nonprofit) and the buyer (the member).
From Sponsorship to Partnership: Changing the Nature of Corporate Involvement
Similar to member involvement, the nature of corporate involvement in and with the nonprofit community has changed from being “sponsors” to being “partners.”
Corporations have found that doing good is good business and being perceived to do good is even better than advertising. So corporations have moved their promotional dollars around and are spending less on advertising and more on what is now considered corporate social responsibility (CSR) programs.
CSR budgets are much more important than advertising budgets and are typically controlled by the CEO’s office rather than the advertising and marketing departments. These budgets are handled differently than the sponsorships of prior years. Rather than simply writing checks, corporations are increasingly seeking a place at the table with their nonprofit partners in deciding how their funds will be used. They are also seeking a measurable ROI—what are they getting for their money? Could this expenditure produce better ROI elsewhere? Nonprofits that have failed to pick up on these trends over time have found themselves with diminished revenues and indifferent sponsors.
The Need to Serve a Greater Purpose
This trend has played right into the hands of the nonprofit community, yet many have not appreciated it or capitalized on its significance. The millennial generation is now the largest generation in the workforce—outnumbering the long-dominant baby boomer generation. Millennials believe in putting their time, efforts, and money as employees and customers into organizations and causes that serve a greater good. This is for real, not for show.
Inward-looking organizations don’t do as well as outwardly focused ones in part because of this new generational trend and in part for the simple reason that inward-looking organizations don’t perceive the dangers of the external changes coming at them until it’s too late.
The Growing Role of Data
Nonprofits have an advantage over for-profit companies because of their ability to gather and analyze data from their members. When used aggressively and intelligently, such data can provide useful career benchmarks for salaries and comparative growth trends by job and industry sector. Some, like the Conference Board, have found exceptionally creative ways of using their data—which, in their case, they brand and sell as the “consumer confidence index,” a data point that has an impact on government policies and stock markets each time it is released.
Over the past decade, customer relationship management (CRM) software has grown exponentially to become easier to use, more capable, and less expensive each year. Today, even cash-strapped associations can afford the tools they need to turn raw data into the kind of valuable intelligence that can be used to track trends and produce valuable benchmarking publications that will become new sources of revenue.