Monday, August 29, 2011

Outsourcing Non-Profit Communications?

Every non-profit everywhere is trying to save money. Many of them have tried outsourcing parts of their administrative functions -- IT, HR, finance, training and more -- with varying degrees of success. The question I have is "Can non-profit communications be outsourced?"

Surprisingly, I think the answer can be yes.

The advantages of outsourcing are well known. It can give you expertise, speed and ease or a combination of the three. The disadvantages are also clear. Badly done, it can lead to gaps in overall service delivery, it can be uneven in results (due to control problems) and it can be expensive (if not carefully thought through). So, where does non-profit communications fall on the outsourcing continuum?

Small and medium-sized non-profits already suffer from a skills gap in their communications departments. The expertise that outsourcing could give would be welcome. Often times, these communications positions are in fact shared jobs in many organizations. For example, it's common in some small social service agencies for the CEO's secretary to also do communications. So, by definition, there is also a speed issue -- non-profit communications can be very slow. Finally, non-profit communications usually suffers from being a non-core function which makes it the stand out in the normal flow of work. Consequently, it is often a 'big bother". The ease of outsourcing it looks attractive.

The disadvantages are real, but to some extent they exist already. Control issues are very common already within non-profit communications. For example, many communicators I know already feel disconnected and out of touch to the rest of their non-profit organization. Outsourcing would not be the disconnect it would seem. In many ways it might even improve things. The challenge of getting results would be real, but no more so than the often miserable results in-house departments can deliver.

Perhaps the biggest challenge in communications would be cost. Here, there are several issues. First, the fact is that this kind of outsourcing is rare. There's no market price for this. Figuring out what to pay is tricky. Second, and perhaps more important, is that there are not many vendors who do this. True, there are literally billions of ad agencies, writers and designers, but the services they deliver are not outsourcing, they are flash-in-the-pan, one-shot services. If you outsource, you will need a service provider who can actually manage your communications, not just sell you things.

So, where can you begin? First, set a budget. A good rule of thumb for outsourcing (but by no means the only one) is to set a goal of reducing overall labour costs 30-50 per cent. So, take what you have now in labour, divide by half and see what you end up with. That's your budget.

Second, look for a specialist in non-profit communications who offers full communications management outsourcing. Here, you will need to look far and wide. I started offering this service recently, so I know that there are no real competitors in my neck of the woods. Some ad agencies I know say they do this, but they just don't have the management skills to make it a long-term effort.

Third, you may have to accept trade-offs. For example, I operate in Kingston (a medium-sized city in Ontario). While I offer this service in Toronto, I can only do it through occasional visits and mostly emails/phone calls. In other words, a full-time onsite presence might not be possible. This would make potential crisis situations a bit tricky, but still manageable.

I can tell you that this is a rather innovative way of thinking. I've talked to many people about this and many of them scratch their head over it. Perhaps the timing of this hasn't come yet. But I think it makes sense. Everything that most in-house non-profit communicators can do I can do faster, better and with less fuss. That will save money. And in today's world, that means something.

Thursday, August 18, 2011

The Connected Non-Profit

We all know that non-profit marketing and communications is changing. Everything is going online. Social media is exploding. There’s more media with fewer audiences. There’s more competition, both direct and indirect. And there’s more choice, giving stakeholders the power to turn us “off” or “on” as they wish. Two of the casualties in this revolution are the techniques that have been a the mainstay of non-profit marketing and communications for decades – advertising and media relations.

Advertising and media relations suffer from the same problem – there’s too many media outlets. For advertising, it means that reaching the same amount of people will require a bigger ad buy over more media outlets. In a sense, it means that to get the same taste you need more butter spread over the same toast. That makes it too expensive. The glut of media also serves to numb us to most ads. They simply bounce off our well-tuned “ad shields” that lets us read a newspaper, magazine or web page without “seeing” the ads on them. For media relations, the story is slightly different. Free publicity used to be a powerful communications channel, but not anymore. Most local media outlets have cut their content to the bone, leaving only national players as true content generators. The result is that the media releases from small-and-medium non-profits go mostly in the wastepaper basket. Even if they do get some traction, they are buried in the back pages because that kind of news doesn’t “sell”. As in advertising, even if you do get a media outlet to pick-up the story the question becomes “who is reading it?”. To get your story on the front page of every media outlet in town takes considerable effort and lots of luck. Results are almost always uneven, and in many cases are actually zero.

The question I have asked myself and others is what can replace these two pillars of most non-profit marketing and communications shops. The answer is simple, and yet so radically different that it leaves many scratching their heads. Advertising and media relations are literally “networks for hire”. When they work, they deliver a connection to many people. If they don’t work, then why doesn’t your non-profit create your own network and deliver your own direct connections? In other words, eliminate the “middleman”.

The place to start is to realize that the barriers to creating your own network of connections are rapidly falling. It used to be that only a newspaper or a TV station could deliver enough people to get your message across. Now, with the rapid advances in online technology, anyone and everyone can create the same thing. You now have the ability to communicate directly with your stakeholders. An email newsletter is a good example. It can deliver more value than a bucket full of media releases to mainstream media outlets because it is direct, it is permission-based (people sign-up for it) and it is infinitely more cheap. True, it will likely reach fewer people, but if you do your homework it will give you the right kind of people – those who believe in your message. One of them is worth a hundred people who don’t know you or who don’t care.

The second technique is to create communications alliances with other organizations to expand your network. Approach another charity in a similar sector. Talk to a social service club. Have tea with a business group. They’re all in the same boat as you. They have trouble reaching their people. If you work together you can share networks. Ask the other charity to do a joint promotion. If you pool your resources, you’ll be able to reach more people with your common message. Ask the social service club to help you send your message to their members. If they believe in the same things as you, they’ll want to share that with their network. Work with them to create a message that works for you and them. Over tea with the business group ask for their help in getting their members involved. Create a promotion aimed at involving business people in your non-profit. Make it work for them. Give them something they need as well as you. You’ll find partnering like this will open up a wide variety of cheap and effective communications channels for you. Plus, it will have the added benefit of giving you a higher profile among community leaders.

With this framework, advertising and media releases can take their proper place as reinforcing tools. Use ads to supplement your growing network. Use media releases to help further your connection with other groups in the community.

Some people will think that this answer is all about social media. It is and it isn’t. Social media is a tool, not a strategy in and of itself. It can be used to connect directly with your stakeholders and to partner with others, but don’t let the hype surrounding social media confuse you. Social media suffers from some of the same problems as advertising – there’s now too much of it. Worse, social media takes time. You can’t create a Facebook page tomorrow and expect to have a million fans. There’s also a scaling problem. Social media tends to work best with large stakeholder groups. If you are a small non-profit in a medium-sized city you won’t get the same result as the national charity that can connect to literally millions of people across the country.

Whether you use social media or something else to deliver these techniques, the most important thing to remember is that you are now in charge of the relationship with stakeholders. Advertising and media releases are not just communications channels, they’re also relationship platforms. The newspaper has a relationship with their readers, the TV station has a relationship with their viewers. Without these ads and media releases you need to step in and fill the gap as the relationship provider. Media outlets know how to give readers what they want. That job now falls to you. It will challenge you because instead of giving them what you want you will now have to think about what the stakeholder wants and how to give it to them.

This solution is designed for small and medium-sized non-profits. It’s low cost and low risk. But make no mistake, it isn’t any easier. One of the seductive things about advertising and media releases is how easy they are to do. This new answer will take more time and more leg work. At the end of the day it will be more sustainable.

Tuesday, August 9, 2011

The death of advertising

These days are over
I used to be a creative leader at an ad agency. When I worked in non-profits I employed ad agencies and spent hundreds of thousands of dollars on ads. I had ad sales people on speed dial. So, this is a hard thing to say.

Advertising just doesn't work anymore for non-profits.

A long-time ago, it did. That's when advertising was a lot simpler. You bought a newspaper or radio ad, people saw or heard it and they responded by supporting your cause. I still remember placing one or two big ads in the newspaper back in the 90s and having almost everyone I know tell me they saw them. Advertising was that powerful.

Those days are now gone. The media, and consequently, the advertising world, has fratcured. Less people read newspapers, watch TV or listen to radio. More of them are going online to get their news and information. At the same time there's been an explosion in available media. In the City of 150,000 where I live in there are almost a dozen radio stations, two major newspapers, two inhouse newspapers at local institutions, three magazines and two online news services. But a great many people here actually listen to national radio from outside the area and read national newspapers. It all means that individual advertising vehicles reach less people than ever before. It means that to get the same reach as you did a decade ago you have to do a great deal more advertising on more channels. And that costs money. Lots of it. In today's world of advertising you need to go big or go home. The days of doing an ad here or there are over. The days of advertising being cheap are over.

Then there's the problem of the numbing effect that all this advertising is having on us. As an average North American I see on average 3,000 messages a day. There are so many ads coming at me from my TV, mobile phone, email, DVDs, billboards, newspapers and more that I can't actually process them all. I ignore most of them. To break through and get my attention an ad has to be radically different or have such a huge footprint that I can't miss it. And what do both of those options have in common? They're both expensive.

Many people applaud the demise of traditional advertising and point to online advertising as its saviour -- social media, search, mobile. But here, advertising fails again.Yes, these online mediums can give you the ability to be more micro than macro in your advertising, but the same problems remain. There are too many online mediums and too many online ads. Reaching people online will take better ads and more of them. And that costs money.

My non-profit colleagues and clients don't understand all this. They still seek advertising solutions to their communications problems. They still select ad agencies to meet their marketing needs. They spend money that they don't have on slick, flash-in-the-pan ads online or offline that do very little for their long-term health.

Advertising, your days of serving the non-profit world are over.

But what can replace it? See my next blog for the ANSWER.

Tuesday, August 2, 2011

The commoditization of fundraising

Have you ever looked at a fundraising direct mail letter that comes to your house and say "I've seen this before"? You know that that can't be true. The letter is from an organization you haven't heard from or who hasn't sent you something lately, but you could swear you've seen that exact same letter before. What gives?

The letter looks familiar because depending on the issue, you have seen the same pitch, the same design, the same appeal and the same beneficiary many times over. There are too many charities communicating to too many donors with same same techniques about the same causes. It all looks the same. The result is the commoditization of fundraising.

What is commoditization? It's when a good or service loses differentiation. Most often, this happens because a fundamental change in production. Usually, it involves intellectual capital. Smarter thinking or a wider use of superior techniques results in the ability to make things faster and/or cheaper, and that leads to a flood of the good or service in the marketplace. An example would be generic pharmaceuticals and silicon chips. Both moved from premium margin products to a commodity status. There's plenty of them and they're cheap.

And that's what we're seeing in fundraising, at least in certain categories. There are so many fundraising organizations doing mostly the same thing that the dfferences between them have begun to blur. A good example in Canada, and likely in the US, too, is cancer. There are literally dozens of cancer charities in most large centres. There are the big ones, such as the Canadian Cancer Society, and the specialty ones, such as the Canadian Breast Cancer Foundation. But there are also hospitals and some universities that raise money fcor cancer research and treatment. And there are small grassroots organizations that raise money for everything from cancer patient groups to individuals with cancer. They all have the same issue. They all have the same goal, more or less. And many of them use the same techniques -- direct mail, major gifts, planned gifts, events, etc. The case can be made that in categories like cancer, fundraising is sold in bulk.

The issue of price is important to commoditization. Usually, prices fall when the market is flooded with products available in bulk. Is that the case here? One could argue that there has been an impact on price if you look at what competition has done to asks. We have seen a movement in fundraising to more gifts at lower amounts. An example would be the explosion in online, email and social media giving. More asks are being made this way, and for significantly less than what major giving or even some direct mail uses.

The net effect of commoditization will be lessening of marketing, both in seek-and-find and in retention. When everything looks the same and reads the same, the value of the communication is lowered. It will take more effort and cost more money to create something that will breakthrough to donors.