Sometimes, It's Better to Take Your Best Guess

In my last blog post (which was an embarrassingly long time ago) I talked about the importance of market research to nonprofits. So, you can imagine my excitement when the University of Michigan Alumni Association sent me an email saying they want to know what I think. I was actually looking forward to taking the online survey and felt a little pride at what a sophisticated alumni association I belonged to. Well, pride does go before a fall. What a disaster it turned out to be! Yuck!

It started by showing me various pieces of mail and asking me to rate my likeliness to open each one. It then asked me to rate how appealing I found one particular envelope. (There was no option for I couldn’t care less about your stupid envelope.) Then the fancy software program asked me to highlight in green the parts of the envelope I liked and highlight in red the parts I didn’t like and then explain each one. It didn’t get any better from there. It was only my researcher’s curiosity that kept me going to the end of the survey.

They didn’t really care what I thought about my alumni association, they just wanted to know the best way to sell to me. From having implemented direct mail programs myself, I know that expert direct mailers experiment and test every possible detail from the color of the envelope to the stamp to the greeting and more. By sending a slightly different package to different segments of the mail list they learn what works and what doesn’t. It’s an expensive, laborious process that is hard to get right. So I can sympathize with anyone wanting to short cut the process. But this project was ill conceived from the beginning for two key reasons:

1. While it’s true, for example, that a blue envelope may get you more donations than a yellow one, it’s not because people have well thought out opinions about the color of envelopes. It seems to me that these decisions operate on an irrational, sub-conscious level. There’s plenty of research that shows people are not good at accurately predicting their own behavior.

2. More importantly, every communication you have with your constituents, including surveys, influences their opinion of you. If you tell me that you care about my opinion and ask me to spend my precious time answering your questions, you'd better be asking me about something that I care about or I’m going to wonder why you’re wasting my time.

Yesterday, I attended a workshop on “Fund Development” with a consultant named Simone Joyaux that I really enjoyed. She talked about a lot of things but the theme that came up time and again was that most development efforts do things backwards. They are focused on themselves and not on the donors. It seems that “donor-centered” organizations are as rare in the nonprofit world as “customer-centered” companies are in the corporate world. This acutely myopic project shows that my alma mater is no exception. (Simone would not be surprised; she’s a rabid Michigan State fan.)

The next time I get a survey from U of M, I’m still likely to take it because I am a freak who collects surveys as a hobby. But I wonder how many other alums will be less likely to open their U of M emails after this experience.

Why Not Just Ask?

There is a lot of talk of borrowing for-profit marketing tactics to promote nonprofit causes. Not everything the corporate world does is transferable, but many organizations have benefited from applying marketing expertise in nonprofit settings. One of the most valuable and, sadly, least borrowed marketing tactic is market research. For example, Marketers Making a Difference met with Cambridge Cares About AIDS to discuss their new name. I’m not announcing any spoiler, I don’t actually know the new name. We helped them think through how to launch their new identity.

One of their chief concerns was how to choose a name that matches their current and future identity without alienating their most important historical supporters. I asked if they had asked their key supporters for input on the new name and they said they had not. What a great idea? Why not ask your most influential supporters for their opinion? You will probably end up with better ideas and you make your key supporters feel important.

I think that nonprofits overlook this kind of opportunity for input all the time. Market research can be a long, complicated, and expensive project or it can simply be making a few phone calls. Don’t be afraid to pick up the phone. Nonprofits have an advantage over corporations in that your constituents are much more likely to want to talk to you. You already have a head start. If you want to get some “quick and dirty” input, here are some pitfalls to avoid:

* Sample bias – don’t assume that all constituents are alike. Some input can be worse than none at all if you talk to only a few people and assume that they represent everyone. Think about who you are talking to and what segment of your constituents they do and do not represent. Use your one-on-one conversations to develop theories that you can test on a wider audience.

* Interviewer bias – the answers you get can be influenced by who’s asking the questions. It’s human nature to want to avoid hurting someone’s feelings or to look important in front of other important people. So, if you want input on your volunteer programs, you might not want your director of volunteer administration asking all the questions.

* Ignoring input – if you’re going to start asking for input, be prepared to use it. This doesn’t mean you have to do everything someone tells you to, but it does mean you have to be prepared to hear and respond to news you may not like. Also, take credit for it when you do make a change in response to constituent feedback. Make sure your supporters know you are being responsive.

Be Careful What You Ask For

I was recently talking with a small, grassroots organization working on affordable housing. (Affordable housing in Massachusetts? What a concept!) He told me about his public relations nightmare. He circulated a press release about rising housing costs. A reporter from the local paper called and but didn’t want to talk to him. The reporter wanted to interview clients from member agencies that were directly impacted and he needed the contacts that same day. Unfortunately, grassroots guy was taken by surprise. He didn’t have any such contacts lined up and had to scramble to get some or risk loosing the story opportunity. Unfortunately, the person he was able to get on such short notice had a skeleton or two in the closet and made for an unfavorable story.

It’s easy to see how a grassroots organizer who is the head of public relations, volunteer coordinator, fundraiser, chief cook, and bottle washer could be caught off guard. But, for anyone who is experience in working with the media, this situation was completely predictable. If you’re going to court the press, you have to be prepared for success. With respect to this story, this means two things:

Lesson 1: If a reporter calls you, he or she will always be on deadline. That means you will have a very narrow window of opportunity to respond. If you don’t give them what they need in time, you could loose the story. What’s worse, they will remember your organization as unresponsive and may not consider you at all for the next story opportunity. The good news is that if you are well prepared you will be remembered as a reliable source and it will give you an edge over competing sources of news. First, the journalist’s schedule is not a mystery. Daily, Weekly, and Monthly publications all have their own rhythms. Many publications produce a media calendar and some of them list story deadlines. You can also just contact the publication and ask, probably the editor. They appreciate it when you try to make their life easier. Second, be available. Make sure they have your cell phone or pager number and return calls right away. Also make sure other key players in your organization are ready to respond promptly.

Lesson 2: Journalists don’t want to write about just dry facts. They want someone to quote and the closer to the center of the story the better. That often means they won’t want to talk to you. If they are writing about a lack of affordable housing, they will want to talk to someone who was directly affected by a housing crisis. Before you send a press release, think about who the journalist may want to interview and try to get them lined up in advance.

These two lessons aren’t all there is to know about working with the media, but if you take them to heart you will definitely improve your odds.

Good News/Bad News

At the intersection of the “enlightened self interest” of newspapers, corporate sponsors, nonprofits, and entrepreneur Greg McHale comes a new online service called “good2gether.” This service offers a platform for nonprofits to enter information about their cause, events, volunteer opportunities, etc. Through good2gether’s partnerships with media outlets like local newspapers, this content makes it way next to articles on their websites. For example, if there’s an article in The Boston Globe about heart disease, content from the American Heart Association could display right next to it. The service launched in June on Boston.com (the website for The Boston Globe) and is rolling out nationwide. Currently, more than 1,600 nonprofits from across the country are signed up.

What’s in it for the media partners? Well, it’s common knowledge that most “news” is bad news. When people read about a problem that engages them emotionally they want to know what they can do about it. People become frustrated being presented with all problems and no solutions. The nonprofit content offers solutions to the problems raised in news stories and makes readers feel better about the publication. But what really catches the media’s attention is the income potential. The “Do Good Channel” where the nonprofit’s information is displayed on their site can be sponsored by corporations looking to enhance their image or promote their Corporate Social Responsibility programs. Newspapers are hurting and this new source of income is really what catches media outlets’ attention.

What’s in it for nonprofits? Well, if you’ve already got all the website traffic and media coverage you want, maybe nothing. Otherwise, it could be a valuable way to attract more supporters among people who are interested in the topic (or they wouldn’t be reading the related article). The service is free, but does require a time commitment. Just like a website – the more fresh, compelling content you add the more it will do for you. Right now it may look like extra work but if it’s as successful as Greg McHale says it will be, it could actually save time in the long run. For perspective, my friend Lori Tsuruda, president of People Making a Difference, likes to compare the job of keeping online volunteer postings current to playing the carnival game “Whac-A-Mole.” Just when you think you’ve got them all updated, another one pops up. If good2gether infiltrates enough media outlets, you could enter all your organization, volunteer, event, and related information in one place and have it appear in multiple outlets. McHale has a good track record. He’s also the founder of cMarket – the online auction service for nonprofits. So, he just might make it huge. If not, Good2gether still offers a low cost way to spread your message.

The good news is, even if you never use this service, there are a couple of important lessons to take from it. The bad news is, it’s easier said then done. Lesson 1: Meet people where they are. If you’re trying to get attention, talk to people about what interests them. Be current. Be relevant. Too many organizations are essentially talking to themselves in their external communications. Also, look for opportunities to reach people at a time and place where they will be open to hearing your message. McHale calls this being “discoverable.” Lesson 2: Offer good news with bad. In other words, don’t be depressing. Any time you talk about a problem, let people know what you’re doing about it. Even if the situation is bleak, present a ray of hope.

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.