Is There a Different Between For Profit and Non-Profit From a Marketing Point of View?

For those who always read the last chapter in a book first, the answer is there is no there is no difference between for profit companies and non-profits.

For the rest of you please read on.

In one of my postings titled Why Marketing Products and Services Are The Same, I discussed why, from a marketing point of view, products and services are the same.  I contend that the same is true about for profit and non-profit organizations.   As I always like to say, the recipe is the same but the ingredients are different. 

First of all, there are definitely some differences between for profit and non-profit. The major differences are:

  1. From a legal/tax basis they are viewed and handled differently.
  2. There are differences on how certain parts or groups within the organizations must behave and/or how they are governed. One example is how board members are organized and their compensation.
  3. Probably the biggest difference is the money side.   How “revenues” are generated and what one can do with the “profits”.

Now why are for profit and non-profit the same from a marketing point of view?  Let’s look at the major marketing functions and see why.

Product or service research:  One must do a Marco/ micro segmentation for both for profit and non-profit to truly understand one’s targeted customers.  For a non-profit that has a single cause the audience will be very specific.  And, one must know the targeted customer’s”pain points” so you can develop the appropriate product /service/message to address the correct segment with your existing product/service/message.

Product or service introduction/offer:   What is the compelling offer today that would make your customer buy or donate?   You must provide all the necessary marketing support and collateral to address this.  Again, there is no real difference between for profit and non-profit.  The difference urging people to contribute to the Jimmy Fund today is not at all different from urging people to buy my software package.

Value:  In a guide that we offer titled, “How to Create a Value Proposition” the key point is do you have a value (Value= benefit- costs) that first, addresses a need, second is unique, third is compelling and fourth, is there value in the eyes of the potential customer?  I should stress even in non-profits, if you don’t articulate a value, why someone would donate to or join your organization.   What is that “ROI” from a customer’s perspective…understanding that it may be emotional and intangible vs. tangible?

Off/online Marketing:   Another point I always make is, it is not a question of which marketing tool to use BUT what is the appropriate mix!   If for example, a nonprofit is focused on the homeless, then there is a high probably that the homeless themselves will not have Internet access and thus blogging is not the answer, but it might be for the corporate sponsors that you have or are seeking.  To address the homeless, the marketing strategy might be to have posters at shelters, parks or other public places. Point is different media/methods for each audience.

Generating revenues:  Again, each type of organization needs revenue, be it from the sale of a product or service or a donation for a nonprofit.  These revenues come from some form of leads, which again must be generated using marketing tools that fit the firm/organization, aimed at keeping a funnel or pipeline full of prospects.

So, keep in mind whether it is for profit or non-profit, one still needs a strategy goals and a marketing plan to be successful.  The only difference is, the recipe is the same but the ingredients are different. 

RHL 5/27/11

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