In Part 1 of this two-part series, I covered the elements of a basic business plan for nonprofit organizations. Small to midsize businesses would also find the information useful, with some minor modifications.
Here, in Part 2—the Marketing Plan—you'll gain the ability to develop the marketing strategy and tactics of your business plan, fully complementing your overall business strategy.
1. Executive Summary
Provide a description of your organization. What is your status—nonprofit, tax-exempt, small business? Whom do you serve, what is your purpose and what are your challenges? This section gives an overall summary of who you are, what you do and where you're going.
2. Situation Analysis
Give a brief description of your current situation. Are your services/products needed and by whom? If you have results of any research (yours or available statistics), state what you've learned as a result. What are the benefits of your organization's mission? How do you meet the market needs currently? What is the value of your organization in the long term?
3. Services/Products Offered
What services or products does your organization offer? Whom do you serve, specifically? Identify your target markets and the percentages they represent of the overall people you serve. Identify the groups you serve: young, old, male, female, professionals, low-income, etc. How do your clients/members/donors benefit from these services/products?
Here's an example:
ABC Employment Services provides employment-based services to people who want a job—those who are unemployed, recently laid off, have been on welfare or are ex-convicts. ABC assesses clients' abilities, strengths and skills, and then assists them in their job search or provides the necessary training to help them gain the skills they need to find a job. Services offered include:
- Assessment Services
- Job Development & Placement Services
- Return-to-Work Services
Clients gain increased self-confidence as a benefit to this program, with 80% finding a job within six months. Job retention rates are relatively high, with 50% of our clients staying on the job for two years or longer.
Target Markets:
- Unemployed/laid off: 70% (40% male, 60% female; mean age 37)
- Coming off welfare: 10% (20% male, 80% female; mean age 32)
- Ex-convicts: 20% (97% male, 3% female; mean age 29)
4. Market Analysis/Segmentation
This section will help you analyze your markets in more detail. By the time you complete this analysis, you should be able to develop the most effective marketing tactics to optimize your results, based on the limited resources you may have. Many nonprofit organizations and small businesses that fail to go through this exercise can easily spin their wheels trying to reach too broad an audience.
Focusing on targeted market segments should help your organization get a bigger bang for your buck. Once you build more revenue or support, you can add segments or build on your existing ones.
Identify your market segments in more detail. Who are they? Which B2B (business-to-business) or B2C (business-to-consumer) segments do you serve? Which groups refer your services/products to your clients/customers/members? These are called your referral sources. Complete a similar chart identifying your market segments and referral sources.
Some examples:
| Market Segments | Market Segments | Referral Sources | |
| Internal | Board of Directors; Volunteers; Staff members | Other board members, volunteers and staff | |
| Payers | Government agencies (be specific); United Way funds; Corporate partners; Foundations | Annual donors; Planned giving donors; Members | |
| Services/Products Identify specific services/products you offer | Clients (user fees) |
Market Geographics
- Which geographic area do you primarily serve?
- What is the total population of this area?
- Market Demographics
- What percentage of the population in this geographic area does your potential target market represent?
Identify the number of potential clients/members/donors/customers/partners in each of your market segments. If you know the breakdown, identify male/female, education, ages, professions, income, company information for B2B, etc.
Market Psychographics
- What kind of habits do your potential clients/members/donors have? For instance, where do they get their information (e.g., television, newspapers, magazines, Internet—be specific if you know the details)?
- What are your target markets' primary motivations for buying your services/products or supporting your organization (e.g., look good, be altruistic, personally affected, practice corporate social responsibility)?
- What are their emotional triggers?
- What do they value?
State as much as you know through research, or estimate based on anecdotal information. Acquiring this information through scientific means enables you to make more effective choices later on when developing your Communications Plan.
Market Perceptions
- Are your market segments aware of your organization? Identify any market research results that show what percentage of your market segments know about what you offer.
- Of those who are aware of your organization, what are their perceptions?
- What is your reputation in each of the segments?
Market Needs
- Why does your organization need to exist?
- What void are you filling?
- How many can you serve each year? How many do you turn away because of lack of resources, funds, etc.?
Market Trends
- What are the significant market trends that affect your organization?
- What are the economic factors affecting what your organization offers?
- What are the market demands or interests?
- What are the trends for charitable giving to your organization—corporate, foundation, or government support?
- Is there an increased awareness of the need for your services/products?
Market Growth
- Have your services/product sales/memberships grown in the past three years? By how much?
- If your organization is strictly a fundraising organization that allocates grants, has your donor support grown and by how much? From which revenue sources has this occurred?
- What are your expectations for growth in the next 2-3 years?
- In which areas do you expect this growth?
5. SWOT Analysis
A complete SWOT analysis (strengths, weaknesses, opportunities, threats) will be most valuable. You may not get consensus on everything, but it's helpful to list the main points in each section. Enlist input from your board of directors, key volunteers, staff (at various levels) and senior management.
Be aware that there may be resistance to this exercise at some levels, as internal people may see this as an exposure of their weaknesses or inabilities. Yet this is exactly why this is so valuable. If all parties can see this as an opportunity to grow and improve results, then spinning this positively will enable your key stakeholders to learn from it.
Under each category, I'll provide a couple of examples as a sample starting point:
Strengths
- The organization has a solid donor base of 20,000 annual givers, representing an average gift of $52.
- The organization's X service has a solid reputation in the Y community, making us a prime service provider. We now have a wait list of Z number of clients.
Weaknesses
- The organization has outgrown its existing "head office" building and staff are cramped for workspace.
- Three of the organization's upper management have been with the organization for over 15 years each. As dedicated as they are, some admit to feeling stale. The suggestion of a sabbatical has been discussed, to give each of them a break to refresh before returning to the job.
Opportunities
- There is only one other organization providing the array of services we offer in the Y community. If we can diversify our revenue streams and build revenue in the next two years, we can begin to expand and meet the needs of more clients.
- Our partnership with Able Corp. allows us to reach more audiences and expand our message.
Threats
- With expanding programs and services, we increase our liability in serving more clients. With insurance costs escalating substantially in the past two years, this will affect our operational expenses.
- Two of our regional chapters have staff groups that are investigating union formation. This will affect our pay grades (to differentiate between union and non-union staff) and increase our risk for staff unrest and morale issues.
6. Collaborative/Competitive Analysis
Use the information gleaned from the Business Plan, in Part 1, to complete this section. Add more detail about the specific programs/services/products you offer versus any alternate providers or partners:
- How does competitors' pricing/fees compare with yours?
- What is the difference in attributes/benefits of what you offer compared with other providers'?
- What marketing strategies and tactics do other organizations use, and to what degree of success?
- What are their strengths and weaknesses?
- What percentage of the market share does each of your services/products provide? (How many do you serve compared with the total potential to serve.)
- Do your collaborative partners offer any similar programs/services with better results? Is there an opportunity to pass one of your product/service lines to them and take one of theirs to improve your effectiveness?
Completing this exercise in more detail may help you identify any opportunities to improve your market share and capitalize on reaching more clients/donors/members, etc.
7. Marketing Strategy
Mission
Reiterate your mission statement here. This will help you stay focused on developing the tactics to achieve your strategy.
Keys to Success
Identify what factors need to be in place to be successful in reaching your mission. After evaluating your SWOT analysis, determine what your organization can do to better its position and maximize its potential. This will help you identify your marketing tactics.
Financials/Revenue Objectives
Use the information gleaned from your Business Plan to identify your financial situation. Try to be as specific here as you can, as this will dictate your tactics. Try to segregate your revenue-generating objectives into categories such as programs/services fees, fund-raising goals, grants, membership dues, etc.
- Identify your current financial position.
- What are your revenue goals and how do you plan to achieve them? Include all revenue streams.
- State your revenue forecast in each category for the next fiscal year, and from which sources you expect the funds.
- Identify what your projected marketing expenses will be to reach each category of your revenue objectives. Remember that it takes money to make money, so be realistic in your allocation of funds to reach your objectives. If you're tight, go back and adjust your revenue goals to reflect what is feasible.
Expense Summary
Identify other expenses such as program costs, administrative expenses, and operational costs. Imagine that you must prepare a pie chart of your expenses. Be brief and state to what the expenses are related.
Example: Administrative expenses relate to the cost of full-time and part-time staffing, in addition to temporary staffing due to illness or vacation.
Marketing Objectives
Aside from reaching your revenue goals, state your general marketing objectives: What do you hope to achieve with your marketing strategy? What are the end results? The number of clients/members served? Provide quality services/programs to those you serve? Expand? Create awareness?
Positioning
If you had 30 seconds to give an elevator speech to someone who doesn't know your organization, what would it be? What is your positioning statement?
Example: ABC Employment Services provides employment-based services to people who want a job—those who are unemployed, recently laid off, have been on welfare or are ex-convicts. ABC assesses clients' abilities, strengths and skills, and then assists them in their job search or provides the necessary training to help them gain the skills they need to find and keep a job.
8. Branding Strategy
Although this section could logistically spin off into an entirely separate plan, it will help you identify the basics to keep you focused:
- What are your organization's brand attributes or qualities? Use descriptors that identify your level of service/product quality, customer service, availability, reputation.
- In one or two sentences, identify your brand promise. What does your organization promise to deliver your client/donor/membership base?
- How do you plan to deliver this promise? Staff training? Manuals? Performance reviews? Rewards or bonuses?
- How do you plan to evaluate whether you've achieved this brand promise? Client/donor evaluations, market research, staff surveys, etc.
9. Marketing Tactics
Use a chart to plot your tactics for each of your revenue-generating and marketing objectives. Include the following information:
- Identify the distribution channels to reach your target market segments. Do you have salespeople, participate in trade shows, employ a direct marketing supplier or conduct an annual campaign using volunteer canvassers? These are just a few examples of some distribution channels to get your messages across.
- Identify the communications vehicles you use to deliver your marketing messages to each of your market segments. You can break this down by project/event, or in general by calendar quarter. It's important to choose the correct medium that gives you the highest return on your marketing dollar (ROMD). This means that you'll want to choose the medium that delivers your marketing message to the most prospects at the lowest possible cost.
The following are examples of possible marketing communication vehicles:
| Newspaper ads | Posters | Telemarketing | Magazine ads |
| Contests | Seminars | Special events | Sales letters |
| Television spots | Signs | Flyers | |
| Promotions | Door-to-door | Movie ads | Postcards |
| Radio spots | Banners | Doorhangers | Directory listings |
| Trade shows | Yellow Pages | Media releases | E-newsletters |
| Articles | Classified ads | Brochures | Gift certificates |
| Newsletters | Events | Word-of-mouth | Web site |
| Networking | Infomercials | Business cards | Catalogs |
| Billboards | Sponsorships | Public speaking | Bench ads |
| Transit shelter ads | Direct mail |
10. Marketing Organization
Identify who is responsible for your marketing efforts. Since there's a strong tie-in between the goals of fundraising staff and any marketing or communications staff, it's important to create synergy between the two departments. In small business, this means a synergistic relationship between marketing and sales. This can only be achieved if it's supported and encouraged by senior management and the executive director/CEO.
- Identify who has responsibility and for what. Is there a lay committee that assists/guides the staff?
- Can you manage all your marketing/revenue objectives with your current staffing? If not, did you budget for new staff, temporary staff, additional student interns, or volunteers to help achieve your goals?
If you haven't accounted for adequate resources, your goals and objectives will need adjustment so they're realistic to achieve. There's no need to set up your organization for failure. I've seen too many nonprofits try to achieve too much with too little, burning out their employees and reducing their chances at success.
11. Implementation
Create a calendar or chart outlining the tactics necessary to reach your revenue-generating and marketing objectives. Outline who is ultimately responsible for each tactical project/event and what the marketing budget is for each. Ensure that your staff resources can adequately handle overlapping projects and events.
That chart will serve as the foundation for a more detailed Communications Plan and subsequent critical path for each project/event.
12. Metrics
It's crucial to establish the metrics necessary to evaluate whether your organization has succeeded in its objectives. Some are easier to evaluate, such as reaching specific gross revenues for a fundraising project. But did the organization net an increased amount? If the expenses increased and the net didn't improve, then how successful was the project?
Example: If you plan an awareness campaign, how will you measure results? If you don't have the necessary funds to hire a market research firm to tabulate results, there are other means of evaluation. An example is a media monitoring report from a local or regional media monitoring company. Results can be measured in ad value equivalency that tells you how much your news releases and subsequent media coverage is worth, equivalent to the value of purchased ad space. It can also identify your audience reach. If these numbers increase overall in a given period, then you can measure your success.
There are many other low-cost ways to evaluate your results. It's important to bring these metrics to the senior management team and board of directors to show accountability. Conducting these metrics regularly and reporting each quarter will allow you to make adjustments in your strategy and increase your chances at success.
* * *
Taking the time to create a written Marketing Plan is the icing on your Business Plan cake. Without it, it's difficult to achieve your business goals. As mentioned in Part 1, knowing your direction is essential to identifying which tactics to employ. Having a solid Business and Marketing Plan in tow enables you to evaluate any new opportunities to see whether they fit into your plan and live your mission.
It will also give your nonprofit a business-oriented approach to its operations. Generating revenue is growing increasingly competitive and challenging. When your organization adopts a business focus to blend with its charitable or nonprofit mission, you increase your chances for success and longevity.
