This goes right to the challenges of NPOs
deciding that their financial salvation lies in glomming a for-profit model
onto their mission work.
You must be competitive in quality and price. With rare
exceptions, people are not going to buy an inferior product or pay more for it
just to support your mission. And, if they are willing to do that, then
why go to all the trouble, expense, and risk of launching a for-profit business
venture? Obviously, they support your work. Just do a better job
with your individual giving program and ask them for a donation. Then you
can stay focused on what it is that you do best.
Fear of "hard sell" sales techniques is another challenging
issue. There is a distinct culture clash between nonprofit and for-profit
approaches to business. So, when NPOs try to be for-profits but are
uncomfortable using those more aggressive or more commer cial methods, they
find themselves at a competitive disadvantage. And, if they end up with
folks inside the organization who are comfortable with using these techniques,
they often find internal culture wars.
I'd recommend a long, hard assessment of whether or not product sales can truly
replace your traditional fundraising efforts.
Good luck with whatever you decide.
Scott B. Leff, Associate Director
Bayer Center for Nonprofit Management at Robert Morris University
I react pragmatically. Where the market works, I'm for that. Where the
government is necessary, I'm for that. I'm deeply suspicious of somebody who
says, "I'm in favor of privatization," or, "I'm deeply in favor
of public ownership." I'm in favor of whatever works in the particular
case. -John Kenneth Galbraith, economist (1908-2006)
>>> "Deborah Hostetter" 07/29/10 3:21 PM >>>
Everyone made excellent points regarding the
challenge you face. The
Sandler program is outstanding; my sales rep unfortunately thought some
segments didn't apply so we had to do some de-selection. You must be
able to differentiate your product from your competitors in either of
two ways: 1) it actually is and you can prove it, or 2) you can create
the perception that it is better by truly understanding what your
customer wants/needs in that product category. What problem will your
solve for your customer? Ask them vs. presenting the feature/benefit
Speak to their needs using your product as the solution tool.
You may find that you can resolve an issue as a vendor that no one else
addressed and the sale of your product is a by-product of our efforts.
ONLY when you know your customer perceives the value in the product can
you introduce the 'by the way, by working with us you also help ......'.
I recently attended a business development training program for a new
business enterprise. A representative from Wells Fargo emphatically
made the point that a Not-For-Profit must first meet the criteria set
forth by the customer. When that need is met, the social enterprise has the
chance to tip the scale via its mission.
If you lead with the mission, the customer will think your organization is
fully subsidized and therefore, your product should be essentially free. I've
had to educate our customers for a long time.
When you act like a serious business serving the customer, you and your product
will be taken seriously. If you lead with, "We are a
not-for-profit" the last three words are all your customer will ever
-------original message --------------
Sent: Monday, June 28, 2010 2:48 PM
Here are comments that address the following request from Paula
"For those organizations involved in selling their products and
what are some good resources that take into account the distinct needs
social enterprises? As a staff member involved in the transition from
traditional nonprofit fundraising to product sales as our primary
generation model, I'm finding it challenging to get up to speed. I
found any resources or training which takes into account the
additional/different sales needs of social enterprises, or adaptations
sales products that are meant for social enterprises.
For example, the fact that our product sales support
the mission of the organization seems to be an important selling point,
I'm not sure whether it's more compelling than the quality of our
and how it stacks up to other products marketed by for-profit entities.
Also, I'm reluctant to use "hard sell" sales techniques for fear of
offending those who previously supported our organization through
and have had difficulty in concisely articulating the different funding
model to those who want to support us. Simply put, some will buy the
product because they want to support our mission, and this is now the
way to do it, while others will buy the product because it's the best of
kind in relation to our competitors. Our sales are not where I want them
be, but I'm having a hard time diagnosing why and knowing the best ways
address the problem, without any background or expertise in sales.
How have those of you who now do a lot of sales work in your social
enterprises become successful?"