A tailored approach
September 2009
A recession does not mean the end of marketing investment, says Gill Nunn
Finance directors and marketing directors are not often allies in any sector, including the not for profit, and during a recession when budgets are tight relationships can worsen. However this need not be the case and as a sales and marketing specialist with a finance background I know that there is value in looking at the arguments on both sides when reviewing how to deal with some of the challenges presented by the economic climate.
‘Discretionary’ spending cuts
Across the board budget cuts by finance will antagonise all directors. It is far better to review spend in all areas looking for cost savings that are mutually agreed. Traditionally recessions are times when 'discretionary' areas are cut, often including staff training and development and marketing and advertising amongst others (
see 'Making the right cuts' in
Caritas, issue 21, August 2009).
Money can and should be saved in these areas but thought should be given to the longer term damage that radical cuts could bring. Marketing must show a return on investment and the challenge for marketing at all times is to agree and monitor realistic metrics that show that their activities are income generating. At a time when budgets are tight often smaller scale marketing pilots to prove the value of a particular type of activity or call to action will help sell (or not!) the case for larger scale spending and reassure colleagues that money is being put to good use.
Income generation
Not spending at all on marketing is of course an option but stop to consider the potential impacts. Money spent in the past has helped to develop and reinforce your brand: more people know about what your organisation does and the value that it adds through your marketing, whether through direct or e-mail campaigns, advertising or mail-drops to name a few. Stopping altogether at a time when competition for scarce donor resources is fierce could be foolhardy and take years to recover from, and remember every recession has to end, even this one!
Reminding donors that the need is still there, and even increased in some cases, for the support and services offered by your cause is vital. For example, at Centrepoint, the young person's homelessness charity where I am a trustee, we learned a valuable lesson from our last Christmas campaign. Pro-bono market research with potential and existing donors had told us that awareness that homelessness was still a major issue had declined and that often there was a view that those needing help and support were homeless by choice. A surprising lesson but one that we heeded and the campaign brief was changed to reflect this: make people aware that homelessness is still a problem and make it clear why young
people become homeless. A strong and clear campaign resulted and exceeded budget, making the finance director particularly happy.
Donor engagement
Continuing to contact your regular donors becomes even more important: if donors are choosing between causes why should they choose yours? Donors will ask themselves which charity needs their money the most? Who will use their donation wisely and can show how they use the money to address the needs of recipients? Communicating with and involving your donors should be prioritised at all times, not just during a recession. And every new donor that comes on board should be thanked, made to feel welcome and become part of a regular communication cycle.
I do not subscribe to what I call inertia marketing which works on the basis that if you don't contact a regular giver then their regular gift will continue in perpetuity. Many third sector organisations have found out to their cost that the opposite is true and if you are fearful of making an increased ask, say upping a £1 0 donation to £20 try a small pilot
exercise that explains why an increase is needed and how you will spend it wisely.
To do all of this you should ensure that your donor database is fit for purpose: it should be up to date so actioning any change of addresses is critical alongside encouraging donors to keep you up to date with their contact details. This will ensure that the all important return on investment from marketing campaigns is met. Significant (10 per cent +) return rates on direct mail signal a time for an overhaul.
Pro bono
And finally what can be done for free? Companies may be happy to help by allowing their marketing or research staff to help pro-bono as we found at Centrepoint. Advertising space is often free last minute, whether as space in magazines or newspapers or billboards. And the media is always looking for a good story: do you have one to tell about the increasing need for your services or a particularly special story about someone who has been helped? The key to all of these is to call up and ask: don't be bashful, they might even say yes!
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