Leader in Email Marketing Doesn’t Do Email Marketing

I went to a panel discussion last week about email marketing strategies. When the Chief Marketing Officer of Constant Contact was asked about subject lines and increasing email open rates she replied “I don’t know how to get attention with email. We don’t use it.” Which struck me as odd because (1) Constant Contact is arguably the most recognizable name in email marketing and (2) if she’s not an email marketing expert, why was she on the panel?

I think I have an answer for mystery #1. I’m still not sure about #2. As a leader in email marketing, Constant Contact has very strong opinions about how it should be used. From their standpoint, it’s for relationship building, not for acquisition. So, when she said they don’t use it, she didn’t mean they don’t ever use their own product. They use it to distribute a “Hints and Tips” e-newsletter, for example. They just don’t rely on it to attract new business. Instead they use pay-per-click advertising, banner ads, and a lot of education (Webinars, in person seminars, etc.).

It’s refreshing to see a successful business with a powerful tool that isn’t using it to hammer everything in sight. Email isn’t new anymore, but thanks to companies like Constant Contact, it is a newly available tactic for millions of small businesses and nonprofits. The hammering is getting pretty loud. For example, the 2008 eNonprofit Benchmarks Study found that on average the nonprofit partners in the study sent more than four emails per subscriber per month. If I try hard enough, I can think of reasons why a constituent might want four or more emails per month, but they certainly don’t apply to everyone.

For another example, look at your inbox. Another of the panelists, Michael Katz from Blue Penguin Development, pointed out that when he started his business writing email newsletters the biggest objection he heard from potential clients was that their customers didn’t use email. Today, the biggest concern is that their customers already get too much email. His suggestion was to pick a very narrow subject and speak to a narrow audience so you know you’re newsletter gets to the top of the pile.

Here are some suggestions from me:

1. Before planning an email marketing campaign, ask yourself what you want to accomplish and if email is the best way to do it.

2. Before you launch your email campaign, be sure it’s integrated with all your other communications – website, letters, phone, in person, etc. Although there may be many people from different departments involved on your end, from your audience’s perspective you have one relationship, one personality and all your communications should reflect that understanding.

3. Before writing email content, ask yourself what your audience wants. The more the email is about them and the less it’s about your agenda, the more likely it is to get read.

Happy emailing!

Is There Too Much of a Good Thing in Mass?

Last Friday I attended my first meeting of the Nonprofit Consultant’s Network (formerly CNEN). Geeta Pradham, Director of Programs at The Boston Foundation, gave a little preview of a soon-to-be released study on the financial health of the nonprofit sector. The full report will be released on June 11 at The Boston Foundation’s event “Passion and Purpose – Raising the Fiscal Fitness Bar for Massachusetts Nonprofits.” From what I saw, the news is not good (especially for someone like me looking to land a job in this sector).

I’ve heard it said many times before that Massachusetts has a very high concentration of nonprofits (14% of employment, vs 7% nationally). I’ve even heard it said that the number of nonprofits in Massachusetts has grown to an unsustainable level. Unfortunately, The Boston Foundation’s analysis of more than a decade’s worth of 990 data may support this grim conclusion. More disconcerting than the doubling in the number of nonprofits since 1989 is the trend of revenues not keeping up with spending or even inflation.

After the presentation of preliminary results, there was a lively discussion among the attendees of the possible causes, effects, and solutions to challenges facing this sector. Here are some of the highlights:

• Lack of investment in capacity and infrastructure. (This discussion reminded me a bit of my economic development background and all the debates about what a community needs to be supportive of start ups.)

• Where will the leadership come from (or who is to blame)? Board of Directors? Major funders? Consultants? What about the constituents being served?

• Concerns about the rush to rely on consolidation. Mergers should be done for mission fit, not just financial necessity and nonprofits need to learn to cooperate more effectively.

• A human resources gap is expected as experienced professionals retire. (This one I liked as I’d like to solve that problem for someone.)

• The sector is so broad and complex, how can you make any generalizations about it?

How can you indeed. We'll see what the numbers have to say on June 11.

Taxation and Representation

The New York Times recently published an article called “Tax Exemptions of Charities Face New Challenges” about local, state, and even federal governments questioning the tax-exempt status of nonprofit institutions. The article claims the tax-exempt status of charities costs local governments $8 billion to $13 billion annually. I’ve always found estimates like this very dubious. It doesn’t take into consideration any of the benefits nonprofits provide. Besides, if local governments all flipped a switch and took away the tax exemptions tomorrow, it’s not clear that they would get all that money. It’s not like the private sector always pays taxes either. For the promise of more jobs and sales tax revenue, large corporations can negotiate tax abatements and even tax payer funded financing and capital improvements. One retailer, Cabela’s, relies so heavily on this strategy they had to put a disclaimer in their annual report, according to this article.

The New York Times story centered around a court case in Minnesota where a daycare center was deemed not charitable enough and will now have to pay property taxes. However, there are plenty of examples closer to home. With Massachusetts facing a budget crisis, tax-exempt nonprofits are getting closer scrutiny. State legislators are considering imposing a 2.5 percent annual assessment on universities with endowments of more than $1 billion, like Harvard’s which has reached $35 billion.

But it’s more than just an issue of budget shortfalls. As nonprofits strive to be more “business-like” and create more consistent revenue streams with earned income, there is growing confusion over what it means to be a nonprofit. What does this have to do with marketing? Well it’s really a branding question. What does the nonprofit brand mean? How is a nonprofit daycare center or hospital different from its for-profit counterparts? Lots of questions, no simple answers.

For example, I pay what I consider to be a ridiculous amount of money (even with insurance) for mostly adequate medical services. Until I got a fundraising letter in the mail, I did not know the clinic where my doctor practices is a nonprofit. At that point, it was too late for them to define their brand with me. Corporations spend billions on their brands and yet brand identity isn’t really determined by a color, or slogan, or ad campaign. It’s the sum of experiences your audience has each time they encounter your brand – each client, employee, donor, etc. Ultimately, you don’t define your brand, your audience does. So what can an organization do? Set an easy-to-understand target and make sure everything it does is consistent with that brand identity. That's easier said than done. Marketing is hard work.

There is still a question of whether the nonprofit community can, or even should, have a cohesive brand identity. How much does a small, volunteer-run, start-up have in common with a large, hundred-year-old hospital or university? I’m keeping my eye on the Massachusetts Nonprofit Network. One of the stated goals of this new organization is “Build the public image of the nonprofit sector … to increase the valuing of our sector and its clients by the general public, policy-makers, and the state legislature.” It will be interesting to see how that effort unfolds.