Social Enterprise Marketing Presented by: Sutia Kim Alter Virtue Ventures LLC Social Enterprise Conference October 30 -31, 2006
Social enterprise turns the traditional social service model on its head! Major cultural shift from “need and handout” to “want and buy” Social Enterprise Conference October 30 -31, 2006
What is a Market? Social Enterprise Conference October 30 -31, 2006
Market n All the people who have a specific need or want and are willing and able to purchase service or product to satisfy that need.
What is Marketing? Social Enterprise Conference October 30 -31, 2006
Marketing n Planning and executing strategies to reach customers.
SE Marketing Considerations n Educational marketing or outreach n n Barriers to reaching clients through traditional marketing vehicles: n n n Literacy, language, location, topography, etc. Communications /PR efforts to educate internal/external stakeholders impacted by SE: n n Market development Community, donors, public, etc. Budget and time constraints Who pays
What are Market Forces? Social Enterprise Conference October 30 -31, 2006
Market Forces All things outside of your control that can influence your enterprise: n Weather n Politics n Economy n Competition n Infrastructure n Suppliers & buyers n Law n Technology
Market Research n Social Need & Market Failure n n n n n Social problem enterprise is trying to mitigate People impacted by social problem Opportunities Barriers Industry dynamics Demand Market Segments & Size Trends Competitors
When are you finished with market research? Social Enterprise Conference October 30 -31, 2006
Never…. Customers and markets are dynamic Enterprise Market Need system for listening & taking action to feedback
Best way to really learn about your market? Social Enterprise Conference October 30 -31, 2006
Start selling something Test market Social Enterprise Conference October 30 -31, 2006
What Scojo learned…
Marketing Plan n Target Market Objectives Marketing mix: 4 Ps n n n Product Promotion Price Place Sales Plan
“I don’t know what the key to success is, but the key to failure is trying to please everyone. ” - Bill Cosby Target Market Social Enterprise Conference October 30 -31, 2006
SE Customer can be Confusing! n n n Social Enterprises have several stakeholders they often view as “customers. ” Clients are “beneficiaries” of social enterprise services or social impact. Target market are those buying social enterprise products and services.
Market Segmentation Social enterprises may have several customer levels User Purchaser Influencer Clinical services (indigent) Patient Donor Government policy Elder services Senior Clients’ children Competitors Child health Pharmacy Laboratory services Child Parent Competitors Patient Insurance Pharma Companies Public Clinic State Government policy
Know your customers n n n n Their wants Preferences Likes and dislikes Habits Lifestyle Demographics … ALL the things that motivate them to make a purchasing decision
What’s in a name? Identity Imagine Social Enterprise Conference October 30 -31, 2006
Your marketing message is not your mission Why will a customer buy your product or service more than once? Social Enterprise Conference October 30 -31, 2006
Marketing message n n Should motivate customers to purchase your product or service. The promotional message can emphasize particular benefits: n n n A message can also exploit a market niche: n n “Convenient one-day service” “Always fresh” “Serving Washington Area New Mothers" It can also be more subtle, triggering a customer's emotions or self-image: n n n “Entrusted senior care professionals” "You deserve a break today” “Peace of mind for you and your family”
“Baking with a difference” All-natural bakery products from scratch. We mix small batches of fresh, premium ingredients and finish each product by hand to create irresistible desserts. Rubicon stands for more than fabulous desserts: we are part of a nonprofit organization, Rubicon Programs, that helps individuals in the San Francisco Bay Area overcome economic and social hurdles. Rubicon provides training, housing, employment and support services to people in need. You can feel good about buying Rubicon products because you in turn support your community.
Objectives linked to strategies Objective Marketing Strategy Mix Increase market share in X county by 5% in first 1 st quarter. Introductory membership to X county residents for 25% discount Price Reach 200 new families in Vietnamese community in 2007 Launch culturally appropriate Vietnamese language translation clinical practice Expand clinical services to Y & Z rural areas including A, B, C border towns Introduce mobile clinical unit which will circulate along border Place Increase infant immunization 25 % among immigrants babies. Aggressive multi-lingual campaign using flyers, and community information meetings to encourage immunization. Promotion Product Example: Community clinics for un/underinsured
One objective MUST be a sales target—units and/or $ Marketing objectives are aligned with social mission and financial objectives Social Enterprise Conference October 30 -31, 2006
"Cheat me on the price but not on the goods. " — Thomas Fuller Product Strategy Social Enterprise Conference October 30 -31, 2006
Product Market Matrix Existing Product Existing Market Income from Social Service Highest mission relevance; lowest risk Income related to Social Service Medium mission relevance; New Product Existing Market Income from extension of Social Service High mission relevance; medium risk Income not related to Social Service Low mission relevance; High risk medium risk Existing Product New Market New Product New Market
Customers buy benefits Community Clinic Features Benefits Cooperative Rural Pharmacy Features Benefits Evening and Convenient; weekend hours reduces lost hours wages Generic drugs Economical Sliding fee affordable Based in community Convenient; accessible Qualified doctors Quality; peace of mind Member insurance Lowers stress; worry free Preventative healthcare Higher quality of life Sells basic Healthier; health/hygiene fewer illnesses products
Product Lifecycle Sales Differentiate Try Reinvent or kill Brand Time
How does your product stack up?
The codfish lay 10, 000 eggs, The homely hen just one; The codfish never cackles To tell you what she's done; And so we scorn the codfish, And the homely hen we prize. Which demonstrates to you and me That it pays to advertise. - Toronto Globe Promotional Strategy Social Enterprise Conference October 30 -31, 2006
Promotional Vehicles n n n n Print media Broadcast media Direct mail Tradeshows Merchandising displays Gifts & premiums Special offers Billboards n n n n n Information meetings Public relations Telephone directory Brochures Posters/Flyers Cross-selling Referrals Personal sales Informal marketing Web
#1 Marketing Vehicle
Promotional Plan Vehicle Reach Product #1 Fit Frequency Cost
"When it comes time to hang the capitalists they will compete with each other to sell us the rope at a lower cost. " - Vladimir Lenin Price Strategy Social Enterprise Conference October 30 -31, 2006
“Price Ceiling” How much will you charge? “Price Floor”
Most common price strategy challenge for a social enterprise? Social Enterprise Conference October 30 -31, 2006
Inability to pay Social Enterprise Conference October 30 -31, 2006
Break even Sales & Costs Profit Loss 0 # of Units Sold
Understand the REAL cost of your services income = revenue Understand how you might be subsidizing your price Use subsidies wisely Social Enterprise Conference October 30 -31, 2006
Subsidies Profit For biz & program investment Social Subsidy Breakeven Before Social Costs Enterprise Revenue Social Expense Breakeven AFTER Social Costs Business Expense Enterprise Revenue Subsidizes Social costs Years
Employment SE Subsidies n n n n n Volunteer time ED + time on SE Wage premium Wastage Lower employee productivity Time spent on employee personal problems/social programs Higher insurance rates Supervisory staff (i. e. job coaches) turn over Time for SE fundraising
"If you can't reach your customers you can't stay in business. " - anonymous Place (distribution) Strategy Social Enterprise Conference October 30 -31, 2006
SE Distribution n n The place (distribution) strategy articulates how you will get your products or services to your customers. Distribution strategy is often a key for social enterprises that serve clients with barriers to ACCESS: n n Markets Healthcare Jobs Information
Distribution - Eyeglasses Method/market Rural Urban Factory poor Workers Mobile vans X “Vision Guardians” X Micro-entrepreneurs X Chemist Partner NGOs X X X Chemists X Direct sales X X
SE Marketing Pitfalls n n n n n Confuse marketing message and mission Failing to assess demand Assuming customer loyalty can be built on social good instead of quality Build it and they will come – failure to market Lack of operational capacity/acumen - inability to deliver on basics Failure to listen to customers/watch the market & incorporate feedback Inappropriate marketing vehicles for reaching customers Confuse “payer” and “user” Confuse clients and customers
SE Marketing Practice n n n Creative/unconventional marketing approaches Take business to clients – emphasis on distribution Price and payment of services based on clients’ abilities to pay or third party payer Quality, Consistency, Reliability are king Brand Test market new products Vigilant about setting price Keep your eyes on the prize Flexibility and responsiveness Social benefit + Mission leverage in other marketing
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