Back in my ad-agency days, I worked for one of those crusty old pros who had the unique talent of getting directly to the heart of the matter.
While discussing advertising ideas with employees and vendors, she was often heard to say, “That’s a tactic looking for a strategy.”
Nobody felt great when she delivered that line on them, but she had a point: Make sure the elements of your plan are connected to a broader purpose.
She also made the concept of marketing strategy easy to understand.
For many nonprofit professionals, the term “strategy” often creates stress. Discussions about strategy are typically accompanied by arcane language, labyrinthine processes and presentations by experts.
If this is all stripped away and reduced to some basic concepts – stated in plain language – nonprofits can dramatically improve the quality of their business.
Michael Porter, a professor at Harvard Business School, has been one the most prominent theorists about strategy over the past 20 years.
His books and articles in the Harvard Business Review have been required reading for students and practitioners alike.
While his works takes an academic bent, his principles can be extracted and presented in a colloquial way. More importantly, they can be applied to nonprofit marketing strategies and organizational strategy in general.
To illustrate these principles, let’s create a hypothetical nonprofit and show how Porter’s ideas can support its growth and relevance.
Welcome to the world of the Smith County Opera Company.
Strategy is about competition
In his Harvard Business Review article, “What Is Strategy?”, Porter writes about the distinction between running an efficient company and having a strategy, one where “competitive strategy is about being different.”
Simply put, it is about being different from your competitors, because all nonprofits compete – for awareness, for audiences, for donors – regardless of their mission.
Smith County Opera competes not only in its traditional category – orchestras, ballets, art museums, even other opera companies – but in other venues as well.
These programs offer performances with a broader appeal, often referred to as “entertainment.” The local performing arts center and well-funded university arts performance programs are examples of these.
While the board and the executive director may feel that opera is an art form rather than broad entertainment, consumers don’t necessarily make that distinction.
Strategy is about choices
Porter went further on the competitive nature of strategy when he wrote, “it means deliberately choosing a different set of activities to deliver a unique mix of value.”
In other words, making a choice about your direction and making it known to consumers is a key to strategy.
What makes this important and difficult at the same time is the recognition that no nonprofit has the financial or personnel resources to be all things to all potential patrons.
Choosing one particular direction implies rejecting others – and without a diligent approach to the marketplace, that is a frightening proposition.
Back to Smith County Opera: If the organization chooses more traditional, mainstage performances (Carmen, Cosi fan Tutte), it sits cleanly within its usual competitive set.
On the other hand, if it performs more contemporary or less well-known works, it has an opportunity to wrest audiences from the entertainment world.
Either choice may make sense, as long as it is consistent with the mission of the company. But a choice must be made.
Three generic strategies
Porter identified three basic types of strategies companies can employ to achieve a competitive advantage.
He offered these as generic versions, recognizing all markets are different.
1. Cost leadership – providing services more efficiently or at a lower cost. For Smith County Opera this could mean a combination of managing internal costs and selling tickets at a price equal to or lower than the competition. Providing lower-cost tickets, however, assumes the opera company has a level of awareness with consumers that is comparable with, say, the symphony and ballet, among others.
2. Differentiation – providing an offering different from the competition. In this case, the opera company could offer performances outside the traditional artistic canon, creating a new audience.
3. Focus – dominating a segment of the market. For example, Smith County Opera could focus on seniors, who typically like opera performances (live and recorded) and could be counted on for donations.
Practical applications to marketing
Simply being “open for business” is no longer enough for nonprofits. Consumers and donors have too many options from which to choose, and will make that choice based on awareness and personal relevance.
Making your marketing, and your mission, more strategic can include:
1. Picking a competitor – Identify an organization that can provide additional revenue, or steal revenue from you – and then target it.
2. Stick with it – Changing direction without real market disruptions (like the current economic reality) is the one of the most significant deterrents to long-term growth.
Apply the right approach – Choosing a strategy is hard, but a sound business decision if you do the research, involve the right individuals and make a commitment to it.
John Klein is president of Trilithon Partners, a marketing consulting agency based in Cary, N.C.