Charities have valuable lessons to teach commercial marketers

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Focus on effectiveness, long-term thinking, openness and behavioural economics has proved a successful strategy, says Richard Madden, planning director at Kitcatt Nohr Alexander Shaw.

Like an old Harry Enfield character, I do a lot of work for charity, but I don’t like talking about it. I worry that my commercial clients will somehow see it as evidence that I’m going soft in my old age.

The usual argument is that charities have a lot to learn from the commercial sector. But the more I work for charities, the more I realise that the reality is often the other way round.

Commercial marketers do have a point. It’s undoubtedly easier to sell the idea of saving a doe-eyed puppy than it is to find a new way to promote yet another parity-priced ISA.

Also, working for charities is no bed of roses for an agency planner. They tend to have the kind of complex internal structures and, frankly, Kafka-esque cultures that would give a P&G brand manager apoplexy.

I have a real issue with their language, too. The emphasis on positivity and political correctness has become so ingrained that charities sometimes risk losing sight of the very need they were originally set up to serve.

However, agencies ignore the third sector at their peril. True, they’re currently hit hard by cuts in direct government grants, but in the longer term, The Big Society agenda will inevitably shift responsibility from the state to the voluntary sector. Maybe, just maybe, some of that vanished COI budget will shift the same way.

But, to get back to my main point, what are the things that commercial clients can learn from the charity sector?

The first may be rather surprising to some – it is an obsessive focus on effectiveness. Charities take return on marketing investment very seriously.

Partly, this is because of the transparency of financial reporting that is required of them. But trustees pay a big part, too. For once, these are non-execs with real teeth who act as genuinely powerful internal critics.

This focus on effectiveness is only likely to increase. In the US, there are already several ’compare-a-charity’ organisations that evaluate the efficiency of charities to inform potential donors. Fundraisers take their ratings as seriously as car makers do the JD Power report.

Just imagine shareholders having this level of insight into the efficiency of your marketing department.

The second lesson that many charities can teach commercial marketers is the habit of long-term thinking. For example, banks often pay mere lip-service to the idea of lifetime value. Net present value of product sales usually seems more important to financial providers than the downstream value potential of the customer.

For charities, the reverse is usually true. The measure of success of an acquisition programme is rarely immediate income, but rather securing future value potential: potential that may include income from legacies maturing decades later.

The next learning may strike some commercial marketers as utterly bizarre. When I first started working for charities, I was shocked by the extent to which fundraisers were keen to share their thinking, and – up to a point – their strategies with their peers in other charities.

If you are especially keen, you can go to an annual conference in Amsterdam (actually in an industrial estate just outside Rotterdam’s dockyards) where, for a small fee, charity marketers reveal all – a little like the denizens of that city’s red light district.

True, it lacks the entertainment potential of Cannes, but it’s infinitely more informative.

Focus on effectiveness, long-term thinking, openness and behavioural economics has proved a successful strategy

I can’t imagine the same happening in the automotive, FMCG, retail or financial sectors. These industries preserve the myth of proprietary strategies and unique insights. Yet they happily ignore the fact that the rapid and incestuous turnover of marketing staff and agencies usually means that any secrets are of the completely open variety.

You could call charity marketers’ openness naive, but I think it’s a sign of maturity. A little like the Darwinian explanation of social collaboration, it is evidence of individuals sacrificing a little to enable the species as whole to flourish.

Finally, there is the lesson that I find most impressive.

Last year was surely the year of behavioural economics. The IPA, in particular, led the charge in trying to understand the benefits its insights might hold for marketers.

However, charity marketers have known the principles of behavioural economics for years – and have successfully embedded them into their fundraising tactics.

When giving, the return value exchange is usually entirely emotional. Or, to quote Samuel Johnson, “The true measure of a man is how he treats someone who can do him absolutely no good.” The challenge this poses a marketer is stark indeed.

As a result, fundraisers were the first to embrace the principles of behavioural psychology first identified by Robert Cialdini and others. You know those little pens charities send you in their mailings? That’s the principle of reciprocity at work. The carefully chosen suggested amounts on the donation form? That’s the principle of the mid-price rule. And those survey mailings that always seem to be followed up by a request for support? That’s the principle of consistency.

So there you have it. Whether or not you have charity in your heart in 2011, it may pay you to have a few of its lessons in your head.

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