The UK voluntary sector

Topics: BusinessMarketing

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Last updated: April 16, 2019

1 IntroductionThe UK voluntary sector is a highly crowded and competitive one.

In 1999, the UK had nearly 200,000 registered charities with a minimal growth in the levels of donations (Charity Commission, 1999). While the introduction of the National Lottery in 1994 certainly has had a significant impact on the smaller non-profit organisations (NPO), since it is in direct competition for the pound in people’s pockets. Green Nature North (GNN), which is a well-established UK based regional animal and conservation charity operating in Northern England, has experienced difficulties in increasing revenue in recent years to fund their activities due to the reasons mentioned above.The growing competition between NPOs working in the same field means that there are frequently several charities competing for the same funds and offering similar services. Fundraising has become a dominant issue. It is crucial for GNN to have a clear mission and a means of differentiation in order to ensure survival and generate more revenue in the future.In section 2, this report aims to develop a well-integrated direct marketing and e-marketing plan to raise a sufficient level of income through voluntary donations to safeguard the organisation’s future, both in the short (12 months) and in the long term, with emphasis on:* Customer retention and acquisition strategies by successfully developing profitable and mutually beneficial relationships with donors;* Identifying new target markets/customers and their characteristics;* Development of new creative “direct” communications campaign designed to appeal to the new target market;* The application, and possible integration of a variety of different fundraising techniques (direct mailing, Internet, ect.

)In developing the plan, the Loyalty Ladder concept will be applied, and the uses and limitations of this model will briefly discussed in Section 3. Afterward, in Section 4 Nielsen’s criteria for effective web design will be employed to assess the key components of three selected charity organisations’ web sites according to revenue generating, relationship building and web sites as such. Comments on the adequacy of Nielsen’s 1999 criteria will also be presented in this section.2 Marketing Strategy and AnalysisFundraising in the UK is amongst the most sophisticated in the world and the task of raising donations – particularly by direct methods – is becoming harder and harder as the level of competitive activity increases. While levels of street donations have fallen, many charities increasingly aim at establishing long-term relationships with their donors. A strong brand can help to establish such a relationship.

To develop a well-known, trusted brand and to optimise fundraising efforts based on a respected brand, the charities need to understand consumer behaviour better (Kotler ; Andereasen, 1996). Insights into donor profiles and patterns of individual charitable giving are particularly necessary (Schlegelmilch et al., 1997).2.1 Donor Market SegmentationSocio-demographic variables (age, gender, education and income) are important factors influencing donors’ behaviour (Sargeant, 1999), hence they are the principal criteria employed in this report to segment the target market for GNN.2.1.

1 The Influence of GenderData from the Charities Aid Foundation indicated that females were more likely to contribute to environmental issues and animal protection. However, the gender split in the GNN membership 68:32 men to women. Effective methods should be used to recruit new female members in the future. Concerning forms of giving, women more often bought charity products and donated goods such as clothes or furniture, which might be traced to the caring female role (Gilligan, 1982) as well as to a still generally stronger household-orientation among women; whereas men prefer to carry out volunteer work in charitable organisations. Men primarily buy as well as volunteer to sell raffle tickets (Schlegelmilch et al., 1997). Gender had no significant impact on amount donated and frequency of charitable giving.

2.1.2 The Influence of AgeElder people are significantly more likely to donate to street collections and in response to a direct mailing. This seems attributable to the minimal physical effort required for them to make a donation (Haibach, 1998). On the other hand, younger persons, who can be expected to be more at home with IT and to have less spare time than their older counterparts, are the group most willing to donate via the Internet (Sargeant, 1999).Age has a positive impact on the likelihood of assuming financial responsibility for a project, and on contributing goods (e.

g. clothes or furniture). Age also has a significant positive influence on both amount and frequency of charitable giving for older people can be expected to have more time at their disposal.2.1.

3 The Influence of Education and IncomeHigher educated people are more likely to support environmental and animal protection. Also higher education led to a significantly greater chance of being a member of charitable organisation paying a regular membership fee and of assuming (financial) responsibility for a project; whereas lower education results in a significantly higher probability of giving at street collections. Additionally, education positively influences the amount of donation.Similarly, the higher their income is, the more likely people were to donate to environmental and animal issues. And income also positively affected the chance of being a member of a charitable organisation paying a regular membership fee and of assuming (financial) responsibility for a project, and of giving in response to a direct mailing.

Higher income people are more likely to donate in greater amounts however less frequently in charitable giving because persons of higher social status are likely to have less spare time to deal with such issues. They may prefer to pay higher amounts less often or possible make regular payments by automatic bank transfer.2.1.4 SummaryAltogether, donors (women, men, older people and individuals of higher or lower social status respectively) prefer to give to charities that are relevant to their individual sphere. Additionally, there should be a likelihood of benefiting from the services of an organisation. Further, people tend to prefer to donate in a way that involves the lowest possible or at least the most justifiable cost – in financial, physical, and psychological terms (Kotler, 2002).

2.2 Fundraising StrategyThe principal of the strategy is to respect the customer as a friend in order to build long-term relationship and loyal support, through:* Establishing the different market segments and understanding their characteristics;* Interactive communication methods to understand the customers in need of the organisation’s services;* Innovative use of database technology to create an efficient and effective direct marketing driven fundraising programme.2.2.1 Recruiting customers* Continuous learning from the previous direct mailing achievements to find the prospects should be targeted and the kind and level of gift which should be requested, consequently, more accurate profiling information on customers will be available.* Based on these information it is possible for GNN to target the postcode for household delivery and identify publications readership profile for loose inserts, which most closely matched that of current customers. The response rate can be increased.* Continue to develop the organisations most successful mailing pack, and to locate and test new sources of prospects.

* Use warm and enthusiastic invitation to people and share GNN’s aims on animal and environment protection with them. To make them feel good and important to be involved in the mission.2.2.

2 Customer Retention* Understand the reasons that the customers may choose never to give again.* First time customers are thanked promptly and warmly by the organisation – within 48 hours – and receive some brief information which introduces GNN and explains what will happen next. The prompt response will be more impressive while the gift is still fresh in customers’ minds.* Welcome the members into the organisation’s sanctuaries as friends* Move the first time members into a programme of “warm” mailings, which would be an appropriate letter with the organisation’s bimonthly newspaper – Squirrels’n’Seals. A friendly letter with their first newspaper acknowledges them as newcomers, welcomes them to the newspaper and explains what they will find in it.

* Every edition of Squirrels’n’Seals which the member receives should includes the opportunity for the member to indicate when and how they would like to hear from GNN – including the option of indicating that they do not want to hear from GNN again.* Each letter should acknowledge what stage their relationship with GNN is at.* Take every opportunity to publicise the GNN’s free phone number on mailing packages. The members are encourage to call named people in the office with queries or comments – a friendly group photo shows the faces behind the names.* Send out reminders to members that their yearly membership is about to lapse, and advise them that without renewing their membership they will in future hear from the organisation just twice a year, at Easter and Christmas.

They will be told that this is in order not to waste the value of their first gift. Once the lapsed members are contacted only at Easter and Christmas, the response rates are expected to be higher.* The use of the most up-to-date database technology is critical throughout this welcome process. With using advanced database technology, it is possible to track and monitor how small groups or individuals are behaving, to respond to people’s preferences and to communicate with particular groups at different times.* Reciprocal mailing which is about the organisation answering the member’s needs, not solely about what the supporter can contribute.

* Members both existing and new should be asked to positively indicate that they do not mind their details being passed onto other third parties. This shows the respect to the customers’ wishes.* Letters should be tailored and personalised to recognise individual customer communication preferences, their status as a member (newcomers, lapsed members, regular members, hard-core members, etc.). Lapsed members should be held as a separate file segment and periodic attempts should be made to reactive them.* Deal with complaints properly.

All criticisms and questions should be answered fully.2.2.3 New Target Market – younger members (12-21 years)* Use both direct mail and telephone regularly to welcome schools to the sanctuaries, especially the schools within ten-mile radius of them.

* Put up posters around the schools.* E-marketing – email and mobile phone text messaging – not only is it cheaper and quicker than sending a piece of direct mail, it also exploits a medium particularly used by younger people. Use cold and warm e-mailings to attract younger supporters.* Giving educational events to young boys and girls concerning the animal and environment protection. Raising awareness before the event through website and email.* Launch an e-marketing campaign – team up with other organisations’ website (e.g. fashion for girls and sports for boys), the younger members can receive email or mobile phone text messages containing sports/fashion news from these organisations.

2.3 E-marketing StrategiesThe current GNN’s website were not using effectively for fundraising, it should be changed to increase the amount of online donations. Aside from being visually stimulating, which initially draws people to a website, the site should have interesting content and be run with the intention of having visitors return.* Use a range of domain names – GNN originally just has .org, .com and .

net extensions are to be added to make it easier for people to find the site.* To provide sufficient information however make the site easy to download and simplify the navigation, so that people who are not particularly web savvy could easily download and find the information they wanted.* Introduce a “splash page” that visitors see first, which has a clear list of “quick links” for different sections of the site, and at the very top a “membership register” button, so that with just one click prospects are straight through to the register box.

* Find a corporate sponsor who donates a few pence every time a visitor clicks.* Offer an easy link so people can email a friend to get them to visit the site.* Offer links to/from sponsors sites* Feedback can be encouraged, using online questionnaires* Launch attractive events with detailed information about it. Update it regularly.* Build up a good database which the organisation can send emails that are both personalised and customised to meet needs of different customer segments. Also cost of sending emails is significantly cheaper than snail mail.

The organisation should to disclose upfront where and how e-mail addresses are going to be used.* Force a dialog between the visitor and the website. Send announcements of relevant updates to the website to visitors. Allow easy feedback from audience, providing the opportunity to improve, better meet needs/wants and develop relationships.* A member’s forum/BBS can be provided, it is a good way to attract and retain members.2.4 SummaryIn this section, some basic customer retention and acquisition methods are presented, which intend to respect the customer as a friend to build long-term relationship and loyal support.

As aforementioned that younger people are more likely to use mobile texts and contribute through Internet, the e-marketing campaign is planning to be launched when GNN come to an agreement with other organisations websites. Finally some e-marketing strategies are addressed which can be integrated with direct marketing strategies to sustain the objectives of the organisation.3 Ladder of LoyaltyAn easy way to think of marketing is as the process of getting customers to climb the loyalty ladder. The customer loyalty ladder illustrates the benefits of relationships marketing and the importance of establishing a balance between keeping customers and seeking new customers (Figure 1).

As they ascend the ladder, customers become more loyal and their value to the organisation increases.Figure 1 Loyalty ladder (Source: Trivers, 1996)On the bottom of five rungs are all the people who fall into the target market. Various forms of promotion such as flyers, loose inserts, direct mailings, etc. can be used to reach these people.

They are suspects because they may or may not be interested in the product or service offered. There are two key strategies which can turn these suspects into prospects:* Know the characteristics of customers – their location, age, ethnic backgrounds and socio-economic status.* Promote the organisation through a variety of fundraising techniques to reach the target groups in order to plant the name of the organisation on their list and guide their step onto the next rung.Suspects take a step up the ladder and become prospects when they respond to the promotional material. Usually they do this by phoning for more information, walking into offices or interacting in some other way. They have expressed an interest in the services by taking action.

Once a prospect show the smallest interest, it is important to offer them adequate information about the organisation, or offer a closer look such as invitation or an open day to visit the sanctuaries.When prospects subscribe to the organisation, they become customers and move up the next rung of the loyalty ladder. Positive feedback will foster loyalty in customers. The greatest threat at this stage is that the organisation will take their customers for granted.

A customer who does not feel welcome can easily be gone or tempted to go elsewhere. Generally a dissatisfied customer will not complain, more likely they will move away taking with them poor word-of-mouth. The key strategies here are:* Develop a satisfying relationship with customers. Use the organisation newspaper to keep people informed about what had happened in the organisation and what will happen in the future.* Seek complaints. People will become more loyal after their problems been properly solved.

Getting new customers is expensive – it costs six times as much to get new customers as it does to get existing customers to return. So it is fairly important to get existing customers to come back over and over again, to take another step up the ladder and become clients. Clients keep coming back year after year because they believe in the organisation’s ability to consistently meet their needs and solve their problems.To move customers up the ladder try the following strategy:* Treat them as close friends.* Get them involved with the organisation to help on projects.* Ask them personally to act as a focus or trial group for new ideas.

Ask them for their advice.* Individuals may represent the organisation by taking part in special events. Such things strengthen and develop two-way relationships by building trust and sharing information.When clients become advocates, they start telling their friends about the organisation and why they should also join in the organisation. They strongly believe in what the organisation is doing and the quality of the service. Now strategies are needed to maintain the strong relationship.* The key with this group is to pay attention to them, to nurture the relationship with them on a continuing basis. Information and involvement are the strategies here.

* It is important to keep telling them that the organisation remember and value them.It takes constant effort to keep moving customers upwards. The two main reasons why a rung on the ladder will stay stagnant are neglect, simply failing to nurture, and ignorance, failure to recognise that the rungs of the ladder exist.4 Web DesignIn this section, three charity web sites – World Society for the Protection of Animals (WSPA www.wspa.org.

uk), Scottish Society for the Prevention of Cruelty to Animals (Scottish SPCA www.scottishspca.org) and WWF-UK (www.wwf.org.

uk) – are selected to compare with Nielsen’s Criteria (1999) for effective web design to identify the key components which would contribute to a successful revenue generating, relationship building and web site.* All the three websites have their name and logo on every page and make the logo and link to the home page. It is convenient for visitors to return to the home page on one click.* All the website are substantial in content that they provide search for visitor to look into the information they want easily.

* All the websites have straightforward and simple headlines and page titles that clearly explain what the page is about.* Structure of these websites pages facilitates scanning.* They all use thumbnails of product photos on product family pages and link the thumbnails to bigger ones, to ensure that visitors can have fast access to the family pages and also can get as much detail as visitors need.* The basic frame of these websites is similar to each other, and also similar to other big websites.These components conform to Nielsen’s effective web design criteria and facilitate usability. These form a user-friendly site which can help to build up good relationship with users/customers, thus increase fundraising. There are also other key elements that would contribute to a successful revenue generation:* A clear list of “quick links” on every page for different sections of the site, and at the very top a “donation” button, so that users can go straight to the donation page by single click.

* “email this page” button is offered so visitors can email a friend to get them to visit the site.* regularly updated news and events to inform visitors of the new changes in the organisations.* Links to/from sponsors websites.* Easy to download or online membership application form.* Combination of interactive tools and added value content.Basically speaking, most of the Nielsen’s 1999 criteria are right, however, the ninth criterion – ensuring that all-important pages are accessible for users with disabilities, especially blind users – seems unrealistic in today’s web design.

Those designers that play a sound file may make it highly annoying and intrusive when played in a multi-person environment.More criteria should be considered nowadays:* Contact information on every single page or the page that provides contact information is very easy to find.* Good performance with peak traffic.* Use interactive technology to enable personalisation.* Advertising banner should not intrude users surfing.

Avoid slow advertising.* Pop-up window should be of appropriate size, and should not obscure the original page. The number of pop-up windows should be limited.

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