How an SMB Niche Market Strategy Can Help Your Nonprofit Grow Faster
What do you mean Go Small?
When you are small and faced with something large, it can be paralyzing. Unless you remember it’s easy - just take it one bite at a time:
For small-to-medium size business, a strategy was developed a long time ago called Niche Marketing. It suggested to ignore your instincts to market to as large a group as you can then take whatever business you can, but rather market only to people who most closely resembled your best customers (the ones most likely to buy and/or be returning customers) and no more. This theory truly can apply to small nonprofits.
I have seen so many small and mid-sized nonprofits flounder over the years despite their best efforts to get everyone who will listen to support their cause. Even ones with creative marketing and great programs. Why? Because they tried to be everything to everybody, which just wasn’t sustainable with their limited resources. If they were a small business, they would have folded OR decided to just go after the “low hanging fruit” - the market where they could win most easily.
Let me explain it another way. If your organization is like all the small to medium-sized nonprofit orgs I have worked with in the past, you likely have only a few individuals working on outreach (possibly only one dedicated) and your outreach budget is very small. You are doing everything you can to grow your lists as fast as possible, adding email addresses from anyone willing to give them. But, you don’t get great performance from those lists. Why? Because you aren’t crafting your message to get to the heart of the people on the list, instead you are making it a message that appeals to as wide an audience as possible. Problem: people aren’t inspired to take action by messages that don’t touch them personally.
Studies show time and again that market segmentation, tailoring your messages and programs to as small a group as possible to get as individualized connection as possible, gets measurable RESULTS. For example, according to data published by Janrain an eCommerce company, email segmentation based on demographics and interests, resulted in:
- 244% increase in email opens,
- 161% increase in click through, and a
- 330% increase in revenue per mailing
Niche marketing takes it a step further - your programs, your messages and your marketing channels are all chosen by the target market you are trying to reach. And, in narrowing your scope, you will actually experience more success.
First Nations (www.firstnations.org) published the Crooked Bow case study on how the Flathead Reservation transformed their beef production into a lucrative business. Rather than sell their beef to just anyone at market price, they formed a Agricultural Cooperative and began to produce high-quality beef jerky to raise the average price they received. They did more than just segment their market and tailor their messages, they changed their mission. But, wait! How does that apply to nonprofits?
There are two key, transferable components of Niche Marketing here that can apply to Nonprofit Online Marketing:
- By focusing on a smaller target market, nonprofits can get better results from refined marketing messages and tactics. And, this can be done without adding resources.
- By going with a niche marketing approach, nonprofits are more likely to get engagement - higher website visitor to donation ratio, possibly a higher average donation and even better donor retention.
That second point is key. In chapter 4 of our Essential Guide to End-of-Year Fundraising, we cite research that people are more likely to give and give larger amounts when a goal is aspirational yet achievable. If your message, your programs and even your mission are clear on that (which I see as niche marketing for nonprofits), then you will be more successful.
Okay, I agree. Go Small. Now what do I do?
Don’t do anything. Well, not yet. First, you need to examine how far you can go with this. Maybe your mission is already a niche - examples within the Salsa client base include Protect Our Defenders, Save the Frogs and Bikes for the World. In that case, then it is just a matter of taking the steps to create a new online marketing strategy for your niche. Or, maybe you have no opportunity to change your organization’s mission. That means you would only work on a marketing segmentation strategy.
If you think you need to change your organization’s mission or programs to fill a niche, stop reading now. You have a lot to do before you start working on your marketing segmentation strategy - i.e. decide which niche to go after, convince your board of directors it is the right choice, etc. If you are unclear how to identify your niche, feel free to email me at email@example.com or tweet us @salsalabs, and I’ll do my best to answer as many folks as I can. Right now, you have to determine the market segment most interested in your nonprofit’s niche.
Ready to make the leap and tailor your nonprofit’s online marketing strategy to one niche? Then, read on! Here are the 5 major steps you need to take next:
1. Identify your market segment in as much detail as possible.
Do you truly know who your best supporters are? Or, do you just assume? I am not talking about recognizing Bob the volunteer, Mary the donor or Jane the woman who does it all for you. Instead, I wonder whether you have analyzed groups of your best supporters to look for patterns. Are your most avid supporters women or men? Old or young? Baseball or football fans? The more information and patterns you can find, the better you can become at crafting your messages in a language that matters most to them - thereby getting more engagement.
Before you move to a niche marketing strategy, it is VERY important to be as specific as possible about your audience.
For example, pretend you are a small nonprofit who wants to collect un-used bikes to send overseas to help local economies. You might think bike enthusiasts would be your best supporters, but would it really? Bike enthusiasts aren’t going to give up their expensive bikes easily. Neither would college students or people living in cities without cars. But, oh...the suburbs! Families with kids in middle and high school. Now, that’s the ticket. Parents who haven’t ridden their bike in years or kids who want the new coolest bike. That would be a good target audience.
2. Collect more data.
In order to know for certain your niche market, you should collect more data. Begin by using your Salsa Organize features to collect demographic data, tag what prompted the donation like which email they clicked-on, or if you are feeling particularly cheeky, set-up scoring.
If you did step 1, you likely already have some hypotheses as to who your best supporters may be. You can start by testing that hypothesis with the data you may have already and then refine from there. If you had no data, then you definitely need to collect some before making changes to your plan. This is a long-term strategy, not a quick change.
Once you have all the data, analysis can begin, and you can focus on one niche to start. But, DON”T STOP COLLECTING DATA. Even if you have it all figured out, things can change. You may grow enough that you are ready to branch into new niches, or the demographics of your target market segment (i.e. your best supporters) may evolve. You’ll only be able to make smart, informed decisions down the road if you are collecting data now.
3. Craft your personae and messages.
There are two types of persona that you need to create:
A) Supporter Persona - draw a picture with words that describes your ideal supporter. It is possible you may have more than one, but it shouldn’t be many. Give each persona a name (eg. Jane Smith, John D. Doe, etc.) and write as detailed a description about them as makes sense - age range, income level, geography, interests, past donation activity, volunteer activities, so on and so forth. Later, when you are creating messages, having that persona in mind will help you create a message that appeals to them and everyone like them.
B) Your Persona - your organization’s persona is a bit different than your brand, although it is closely related. Imagine if your organization were a person, who would it be? Much like the supporter persona, give this persona a name (we named ours Aerin) and create a detailed description of them. This helps the supporters who receive your messages identify with your organization on a more personal level and keeps your messages consisent. When you write, you will need to ask yourself, “Would [Insert persona here] say this?”
4. Clean up your lists. Get organized for a segmentation strategy.
The whole purpose of focusing on a niche and then marketing to a segment of the population most interested in that niche is to craft your messages for impact - ignite action. fuel change. If you are tempted to continue to send your message far and wide to anyone who will listen, please go back to the top of this article and read again. Niche marketing and market segmentation are designed to have a bigger impact and get you greater engagement from a smaller group. The first big part of that is this:
STOP EMAILING EVERYONE! Sorry, didn’t mean to yell like that. I am just really passionate about email best practices and marketing segmentation. Remember the stats above on what a difference it can make?
We have an entire whitepaper called “Emailing in a Spammy World” that explains the awful, natural consequences of emailing unclean lists and other bad email habits, as well as advice on how to avoid those consequences. In addition to the advice in that paper, I recommend cleaning up your lists to make it easier to target between the multiple personas. In Salsa, you could easily create a smart group for each of your supporter personas that automatically pull in anyone who meets the criteria (activities, tags, etc.) for that persona. So, you can easily send messages to that group tailored to them in every way from images to wording, and then measure the results.
5. Work on multi-channel marketing strategy.
So, this article is already more than 1,800 words long. I guess I should have made it a whitepaper but c’est la vie...I’ll do my best to explain this last step quickly. And, I’ll give you more reading material at the end.
It is likely that your very best supporters all use multiple forms of communication and they don’t all use the same one(s). So, you need to do an inventory of which communication channels make the most sense for your supporter personas. Note, I didn’t say which ones were easiest for you, or industry standard or best practice. I think this may be the best part of this strategy for small nonprofits - you need to do less, not more. That’s right, do less. ONLY use the channels that your best supporter persona actually wants you to.
How do you decide which ones? That’s easy. Just ask your supporters. Yes, they may be on Facebook or Twitter or Tumblr or Buzzfeed or Onamakpisai (I made that last one up), but it is likely when it comes to communicating with you (their fav nonprofit) there is a BEST form of communication. I am sure your current supporters within each of those supporter persona groups will be happy to share with you their thoughts. Then, based on their feedback, you can assume that the majority of folks in their group are like them and likely to use those same forms of communication. It should become clear which channels are worth your investment and which ones aren’t.
Once you have identified the channels, the next step is to write a plan of what messages will go when and to whom. Making that plan a multi-channel plan just means you will coordinate all the messages - make them related to one another but tailored to the audience.
How do you find new folks in each group? Well that gets more complicated. Like I promised, here’s another resource for taking your strategy to the next level: Download this eBook now: Essential Guide to Growing Support Online for Nonprofits