For Profit and Not-for-Profit Nexus – Models of Connection
In the 70’s and 80’s the gap between for-profit and not-for-profit organisations was fairly clearly determined and articulated. For-profits existed to provide profit to shareholders or in the absence of shareholders, profit to the owners of the business. Not-for-profits existed to provide philanthropic and charitable assistance to those who, for whatever reason had fallen through the safety net of society.
However, over the past two decades shifts have occurred between both sectors. For-profits have had to balance the drive for profit with the need to demonstrate they are good corporate citizens, while not-for-profits have had to balance their philanthropic work with the need to return a profit to remain sustainable and continue to provide services when there is increasing demand for services and tighter regulatory and financial requirements. For-profit organisations know the reputational damage and financial costs of litigation that can quickly arise when profit and expediency is placed above the environment or ethical behaviour towards customers and clients. The growth in the number of not-for-profits, (56,000 charities in Australia in 2019 and growing at 4%) and the increase in regulatory requirements and difficulty in accessing funding, not-for-profits need to be much smarter in ensuring their sustainability.
Both sectors have moved towards a middle ground and recognised the benefits that arise from connections and the nexus between each other.
In the 70’s and 80’s the nexus between for-profits and not-for-profits was a philanthropic model. This was based on not-for-profits receiving donations from for-profits that allowed the not-for-profits to deliver services while providing the for-profit organisation with an enhanced reputation as community minded.
Over the past two decades, many for-profit and medium to larger not-for-profits have moved away from the philanthropic model to more of a transaction model of interaction.
A transactional or partnership model allows both the for-profit and not-for-profit organisations to begin sharing resources for specific events or occasions. For example, the for-profit organisation may provide staff as volunteers for an event being run by the not-for-profit. Or a for-profit organisation may meet the marketing costs for the not-for-profit organisation as long as its brand is recognised on the marketing material.
A transactional or partnership model has very real advantages for both organisations. It provides greater brand recognition for both organisations. For many not-for-profit organisations, being able to optimise brand recognition is an invaluable but often difficult to executute advantage. The real advantage of strong brand recognition for not-for-profit organisations comes when submitting grant applications.
The last type of connection between for-profit and not-for-profit organisations is an integrative model where both organisations collaborate and utilise joint resources to create new services or resources to meet community needs. The advantage of this approach is that the unique strengths of both sectors (for-profit & not-for-profit) are utilised to meet specific community needs.
Such an approach is not without its challenges, trust, confidence, and open communication are essential, yet these qualities can be learnt and built through first exploring and engaging in a partnership model of connection.
As not-for-profits are increasingly having to compete with other not-for-profit for funding, the opportunities for not-for-profits and for-profits to build strong connections and partnerships to the mutual benefit of each, continue to grow and develop.
[1] Are there too many charities in Australia? | Australian Charities and Not-for-profits Commission (acnc.gov.au) [2] Impact of the Economic Downturn on Not-for-Profit Organisation Management | Department of Social Services, Australian Government (dss.gov.au) [3] ibid [4] ibid- Published in Not-For-Profit
Space, Silence and Creativity
Music is built on the harmonies of notes. A statement which, while correct at one level is only half correct because music is also built on the spaces and rests between notes. It is the balance of both silence and harmonies that create music.
- Published in Psychology, Wellbeing
Nudge Theory
Choosing an apple or banana when paying for petrol because the fruit is where we pay or snacks in a vending machine replaced by healthy choices are examples where customers are nudged in their decision-making process.
- Published in Data, marketing, Psychology
Chess vs Checkers
Are you more of a chess or checkers (draughts) player when it comes to planning and implementing a strategy in your organisation? These boards games generally played amongst friends, unless you play chess competitively, can assist us in reflecting and thinking about our style of leadership and implementing strategies.
Customer Life-Time Value
We give lip service to the importance of customers and clients. For businesses impacted negatively by COVID, whether we are B2B or B2C, maintaining, and indeed growing a solid base of loyal clients will be the difference between success and failure, there it is crucial to know the value of our most important asset.
The Chronic Complaining Colleague
We all have off days. Days where the sky seems metallic grey rather than vibrant blue and smiles have an edge of irritation. Sometimes, it can be healthy to complain; to vent as it allows us to bring things out into the open where there is a greater chance of them being dealt with constructively, rather than being suppressed and pushed away.
Centrality of Clients
In an environment still coming to terms with the impact of COVID, businesses in both B2B and B2C areas are asking themselves, if they can rely on the loyalty of customers they had prior to January 2020?
Customer’s priorities have been impacted by the uncertainty and fear they have felt and by losses they may have experienced. How B2B and B2C businesses pivot and adapt to changing customer experience will, in large measure, determine their ability to consolidate and grow.
While there is much talk about the importance of the customer or client, often there is a disparity between the talk and the practice of the business. A subtle, unconscious inertia can pull organisations into being company centric rather than customer centric, almost without them realising what is occurring. In an increasing digital age and with the impact of COVID, organisations have a window of opportunity to review their practices and build a culture and practice which places the client at the centre.
Organisations that are company centric, channel the customer through a linear series of interactions that allow the business to control both the process and the interactions. However, customers rarely follow stepped out journeys. Instead, they follow their impulses, urges, whims, and preferences often in unplanned moments of opportunity. This means organisations need to understand these unplanned moments and provide opportunities that allow clients to make decisions to achieve their original intent.
The customer-centric, purpose-led approach is even more important for B2B organisations because longer buying cycles means keeping clients engaged in longer journeys that have more interaction points. This means more people, each on their own journey with their own purposes depending on their role resulting in a multi-layered client journey which is more challenging than an interaction in a B2C environment.
How do we create a stronger customer-centric environment?
The first step is to shift our thinking from a transactional perspective which is simply a buy/sell dynamic to one where both organisation and client are viewed in a symbiotic relationship. A symbiotic relationship is one that is mutually beneficial. In other words, we change our perspective from seeing the client as a path to achieve a purchase to viewing our relationship with the client as a means to achieve their purpose.
One of the ways businesses do this is by focusing on moments that matter to clients. Accenture, in research found there are specific client interactions known as “moments that matter” that have an outsized influence on customer happiness and loyalty. There are three moment that are particularly relevant; when a customer pays a bill, upgrades or changes services or calls with a technical question or billing issue. In considering these three moments that matter, organisations can boost customer happiness and achieve brand advocacy & loyalty.
This information provides the second step. It is easy to fall into the trap of thinking that to “delight our customers”, a phrase used by Jeff Bezos businesses need to provide them with something new and different. In fact, what delights clients is the opportunity to deal with businesses, with less effort. Life for clients is complicated enough, where businesses can remove friction from the customer experience and provide smooth, efficient, and fast service, they provide delight.
Removing friction from the customer/client experience provides small and midsized B2C and B2B businesses with a window of advantage, for while larger organisations may have greater resources, there is often, as mentioned a cultural inertia to change that allows opportunities for more nimble companies to better align with customers’ purpose and forge new relationships that strengthen loyalty between them and their clients.
Becoming customer-centric takes commitment and a dedication and willingness to look at every aspect of our business. It takes work to work against the inertia that drives businesses back to being company-centric. Yet, if we want to stand out to customers and clients, we need to walk the path of finding out and meeting our clients’ purpose.
[1] Designing Customer Journeys for the Post-Pandemic World (hbr.org) [2] Designing Customer Journeys for the Post-Pandemic World (hbr.org) [3] ibid [4] Portrait Of The Customer-Centric Legal Function (forbes.com) [5] Designing Customer Journeys for the Post-Pandemic World (hbr.org) [6] Customer Experience Can Be Data Driven—Here’s How (forbes.com) [7] ibid [8] ibid [9] Portrait Of The Customer-Centric Legal Function (forbes.com) [10] ibid [11] ibid [12] Designing Customer Journeys for the Post-Pandemic World (hbr.org)- Published in marketing
Rule of 7
The rule of 7 states, it takes 7 interactions with your brand before a person will engage with it and become a client or customer.
- Published in marketing, Psychology
Daring to be different
Fear creates uncertainty. Uncertainty creates a sense of dis-equilibrium within us that we try to correct, so we can feel balanced and in equilibrium again.
- Published in marketing, Psychology
Clickbait and the damage done
Clickbait is the tactic of teasing users with intriguing ads or posts of your content to entice them to click-through and read.
- Published in marketing, Psychology
