Knowledge Peers

New business landscapes are emerging for charities

As 2012 austerity drives begin and generating revenues becomes an acute challenge for charities, supporter acquisition, revenue streams and looking at trading in new ways are all going to be undoubtedly key themes for the coming year.

From the vantage point that Visceral Business has as change strategists and developers of social capital value, for charities and commercial organisations, we’re involved in creating new social engagement business models that eliminate the ‘for profit’ or ‘not for profit’ conundrum by simply being ‘beyond profit’. These ‘beyond profit’ user-led social business models can make a tremendous difference to charities as they reconcile the challenges ahead and seek to improve operational performance.

The Child’s i Foundation, for example, of which I’m privileged to also be a Trustee, has a cost of donor acquisition rate of 19%, compared to the average standard of around 30%. It uses retailing channels like Shopify to develop event experiences online that give supporters a real stake in the charity that enables them to see the charity as a work in progress, happening in front of their eyes.

The joys of benchmarking

I can no longer deny it, I am a complete saddo. Because I like benchmarking. Give me a thick book of dense statistics on the fundraising programmes of different charities and I am very happy. At each of the organisations I have been fundraising director, one of the first things I have done (after finding money to invest in growth of course) has been to sign up the organisation to the Fundratios study or the Donorcentrics scheme or, if it’s WWF, both.

Funnily enough, each time I have left a charity, they have stopped participating in these studies. Which can only lead to one of two conclusions. Either I am completely mad or these organisations are missing out on something. Hmm, don’t answer that one...

Getting boards to understand the need to invest

I’ve been in the voluntary sector quite a while now, long enough to have seen certain issues come around again and again. One of the hardy perennials that charities still seem to agonise over is whether, and how much, to invest in fundraising and marketing.

Each time I have joined a new organisation as Fundraising Director, I have discussed with my trustees the issue of investment. It has been interesting to see how much attitudes differ on this subject between boards. I have some responses which question the need to spend any money at all promoting the organisation. “Isn’t this money we should be spending on the work?” as one charity’s board member asked me.

What will shape business in 5 years time?

At a recent Knowledge Peers gathering we had some debate and discussion on what will shape business in five years time. Inherently these tend to be more “strategic” influencers and, with the help of our network, we ran a research poll asking executives to rank their top 5 opportunities and threats in the longer term horizon. If you want to read through the full results and commentary take a look at our Survey Results.

Do you tweet?

At the Fast Growth Club ‘Raising your Profile’ event last week, Yvonne Fuchs of The Branding Workshop asked a question - what works best for SMEs, new media/social media or traditional PR?

In my experience traditional PR/marketing now works in conjunction with Social Media.  Traditional PR was very much about “I will tell you”, where as Social Media is more about engaging with the end user and asking for their opinion, rather than the traditional one-way traffic.

21st Century Philanthropy - The importance of showing impact

As the UK economy recovers from one of the deepest worldwide recessions and steep cuts in government funding begin to bite, 160,000 registered charities as well as countless tiny community groups are trying their best to help the poor, sick, disabled, old, young and others, not to mention causes as wide as the planet itself.  Charities are having to compete for the donor pound against other discretionary spending – as well as each other. 

In exchange for making tough choices for their donations, donors are developing high expectations of their chosen charities, including the donations that charities should accept, as shown by the outcry over the Royal British Legion‘s decision to accept the proceeds of Tony Blair’s memoirs.  Donors increasingly want accountability. 

How are charities responding to this trend?  In a number of ways:

It’s amazing what history can do…

In common with the national press, the last week has seen the marketing press suddenly becoming obsessed with the Royal Wedding. ‘Will brands gain from their links to the “big day”?’ and ‘will brand Britain receive a much needed boost?’ are the questions being asked.

Is all publicity good publicity?

Many companies have interesting stories to publicise. Company founders can be hugely important in telling those stories. Consider Amazon. CEO Jeff Bezos is an accomplished showman. In 1999 he personally delivered an order of golf clubs to Amazon’s ten millionth customer, a man in Boston, whilst Bezos’s most famous stunt is probably the tennis match he played with Anna Kournikova at Grand Central Terminal in New York in 2003 to publicise the tennis star’s new range of sports bras available on Amazon (‘only the ball should bounce’). 

The best Cheapflights stories always related to new features on the website such as: a ‘telephone cheat sheet’ which gives you directions on how to ‘speak to a human’ in easy steps; a travel checklist for all the things you need to do before you go; and an analysis of the additional fees increasingly imposed by the airlines for, for example, baggage, fuel and choosing your seat. All these stories received wide exposure. 

Not all our efforts were successful. When Heathrow Terminal Five opened, we sent a team to the terminal to celebrate the opening and, of course to publicise the website. Little did the team know that the £4.3bn Terminal Five was in a state of total chaos. Flights were cancelled, baggage was delayed and even check-in came to a halt. To add to passenger fury, none of the electronic announcement boards functioned either. It was amidst these scenes of anarchy and passenger fury that our enthusiastic and well-motivated PR team arrived. 

Viral marketing is a two-edged sword. The internet - with its blogs, social networks and rapid transmission of information - is not a one-way street which can be ‘controlled’. ‘Google Alerts’ is a free way of tracking what is going on, although its coverage is not universal. There are a number of paid tracking services which are available in order to provide a fuller picture. 

A major risk to any marketing effort is that adverse publicity or comment may appear in search results for your company or brand. So watch out for that and deal with it if and when it does happen. Respond positively and if the coverage is inaccurate, try to ensure that the commentator publishes a retraction. Failing that, make sure that your side of the story is heard fully. 

Recently, the chief executive of Groupon, the rapidly growing online coupon provider which is now apparently worth $25 billion, had to apologise to Japanese customers for a New Year's deal gone terribly wrong. In a subtitled video message uploaded onto YouTube, the company's founder and CEO acknowledged that the company had "really messed up" and outlined steps it was taking to rebuild its tarnished image in Japan. 

The blunder that prompted Mason's apology involved a deal for delivery of "osechi," which is a traditional New Year's meal. Unfortunately, some of Groupon’s customers who paid 10,500 yen ($127) for this particular bargain were left feeling like they had been duped. Many of the 500 osechi sets sold arrived late, while others' meals were in "terrible condition". Groupon Japan admitted the sets didn't match the picture or description provided by the restaurant, Bird Cafe, which was overwhelmed by the volume. 

Angry customers took to the Internet, posting pictures of the underwhelming delivery on message boards, triggering a slew of criticism and bad publicity for the company. 

Mason attributed the latest misstep to similar growing pains that the Chicago-based company has felt in the U.S. "We created Groupon to help enrich people's lives by bringing new exciting experiences to them," he said. And, in a damaging finale he added, perhaps remembering the indigestion caused by the culinary disaster of the spoiled meals: "So when we do the opposite, as we have in this case, it really hurts." 

David is the author of ‘Net Profit: How to Succeed in Digital Business’ (John Wiley)www.netprofitbook.com and the former CEO of Cheapflights Media.

Does your company need a personality?

Quite a lot of the businesses that I work with ask me for my opinion on the use of Social Media. Whilst I love what it can do, I do fear that a lot of businesses rush into it simply on the basis that they feel it is the current ‘must-have’ in any business plan; a bit like the need for a “.com strategy” 10 years ago. 

Before answering the questioner I usually ask how well they know their business model; 

• Who are their highest earning customers? and 

• Is the business cash flow positive? 

Those that can answer this neatly and precisely deserve an answer to the Social Media question and those that can’t need to be encouraged to prioritise a little more. 

Once past this little hurdle I can then ask, “Does your business need a personality?” as that is what I believe Social Media does for you. It can generate revenue as a result of having a personality but usually it is more about how you connect with your customers and the outside world i.e. the personaility that your business portrays. 

In a nut shell, here is my view on the current three principle social media tools; 

Twitter – some industries use it a lot e.g. the events industry, others don’t. Great for spreading branding messages, news and offers. Spend some time following others in your industry first before setting some guidelines as to how your business should use it. It needs to be updated at least daily. It’s quick fire and instant but requires constant attention to create an ongoing personality 

Facebook – essentially a branding presence. Link your Twitter messages to appear on both platforms at the same time. A useful place to add some photos of your product, Awards parties and staff pictures. Can also create a forum for debate and to gather feedback on ideas. Needs to be updated at least weekly. Has a longer viewing time frame than Twitter so allows you to develop your business’s personality over time. 

Blogs – possibly the most time consuming but also one of the best ways for a CEO to create the business’s personality – whether they actually write it or not! Keep the pieces short and too the point and make it easy for readers to see examples by embedding links. 

A few final words of warning though; 

• these tools take time and effort to be effective; 

• whatever is posted is online for perpetuity; and 

• don’t lose sight of your underlying business model. 

Matt Honey

 

Not so Fast

I’m talking to a lot of businesses just now who tell me they are so sick of “tip overload” they barely dare look at the side of their Frosties box in the morning, for fear of yet more helpful hints on how to ensure their business survives this recession. And why they ask me, do so many of these suggestions come from the very bankers that most entrepreneurs think a) started all this mess in the first place and b) couldn’t run their way out of a paper bag let alone a business! Argh... I hear your groans of frustration! 

Well you know what guys, I’m with you on the whole “who are these bankers to think they know best” stuff but then I think over what I’ve seen in some of the businesses I’ve dealt with recently. There have been plenty where I've found little evidence of entrepreneurs taking these “best practice” ideas very seriously at all. 

If I were to say to you that having a clear and well communicated business strategy at this time is vital, you would snort derisively. If I said it’s critical that the business also boasts structure, staffing and systems that underpin and can support delivery of that strategy - you’d be gesticulating rudely and heading off to the 19th hole as fast as your legs would carry you. 

But not so fast....because in my experience as both an entrepreneur and business trouble-shooter, you would be amazed how many companies – large and small - do not have the basics working on the ground. Strategies are frequently fuzzy and badly communicated to staff, structures are not fit for purpose, staff have been recruited in the likeness of those on the Board who wield the most power, and systems are poo-pood as something for wimps. I find boards that don’t have a clue what’s going on at the coal face and whole armies of accountants preparing Board papers in near splendid isolation from the reality of the day to day numbers. 

So my challenge to you, Growth Businesses of Britain, is to go back and ask yourself some key questions: 

1. Could any member of my staff articulate our business strategy to a visitor in fifteen seconds and understood what that means on the ground? 

2. In the last 12 months, have I looked at the business structures from a “white sheet of paper” point of view? 

3. Did we genuinely go through a proper process when we hired that last bloke in sales or did we just go on what Tom said because he just seems to know everyone in the industry? 

4. Am I confident that monitoring of systems and procedures has been as robust lately? Or have we been cutting corners recently to win those new contracts? 

If you can’t honestly answer YES to all of the above questions then I guess you have some homework to do. Don’t worry though, I’ll be back to bend your ears on these and other exciting aspects of business management in future blogs (that is unless the Police catch up with me on those old charges!!) ...and in the meantime.... 

Cut down on the Frosties, all that sugar is bad for your concentration! 

Lisa Porter