The main focus of this course is for profit marketing. However, I know that many of you have had experience with or currently working for or maybe are just interested in nonprofit organizations. So you might be wondering how everything that we have discussed so far applies to this context. A nonprofit organization is an entity that is organized and operated for a collective public or social benefit. Nonprofits do not distribute profit to anything other than further in the advancement of the organization. Some examples are schools, hospitals, museums, zoos, churches, charities, foundations and government organizations. The good news is that the same marketing principles apply, just have to shift your frame to this context. Let's start by reviewing again the definition of marketing that professor share with you. Marketing is about identifying and satisfying consumer's needs and delivering value. Let's break this down. What are the consumers needs that non profits can satisfy? Looking again at the Maslow's hierarchy of needs, nonprofits satisfy psychological and self fulfillment needs. For example, going to a museum or zoo provides an experience that you can share with loved ones. So it could satisfy a belongingness needs or buying a membership to the Met museum in New York city could also signal status. So it can fulfill an esteemed need. Donating to a charity can also fulfill different needs. I conduct research in this area and a study that I recently published shows that people can have two different needs when donating. First, is the need to make an impact in someone's life which is related to a belongingness needs, or second, they need to be a moral person, which is a self actualization need. Understanding the specific needs of potential donors is important for creating value just as we discussed for for profit organizations,. For example, I found in my research that potential donors with a self actualization needs to be more moral are more likely to donate to far away causes. So a charity like Feed My Starving Children, which focuses on helping children in developing nations can target potential donors in the US who have this need and position themselves in a way that addresses how donating to this charity is the moral thing to do. You see, we just apply segmentation, targeting and positioning in this context. The marketing mix that Professor Noel discussed also applies, but with some modifications. Most people would believe that the product that nonprofits provide is what is being given to the beneficiary, but this is not the case from a marketing perspective. From this perspective, the person who gives the money is the customer. So the product is either an experience or doing something on their behalf. For example, planting a tree because the customer worries about the environment. The product is the solution or a hope and the organization is making the customer feel better about something that concerns them that they cannot do on their own. Place is where you will reach customers, for example, at the supermarket checkout or intercepting them at certain locations to ask for a donation. The distribution channels need to align with the supporters. So, for example, if it's for an environmental cause you should avoid giving printed materials that are not recyclable. When it comes to promotion the same principles apply. This might seem obvious, but maybe nonprofits do not communicate to why or the value that they are providing to consumers. Additionally, there are other considerations based on research that can help the nation please be more effective. For example, people are more likely to donate when the beneficiary is more concrete. So, for example, showing a picture of a girl named Gabriella who lives in Nicaragua is going to be more impactful than just showing a picture with lots of children and just saying help children. Other research has found that giving people a choice, for example, between two beneficiaries also increases donation because it increases the donors agency. Additionally, turning verbs into nouns has also been shown to increase donations. For example, instead of saying help these children, applicant say be a helper. And this encourages action because it allows people to claim a desire identity. And finally price. In the context of charities asking for the nation's pricing decisions relate to the range of suggested donations the supporter can choose from. And this is an important decision given that it can influence how much potential donors will give. For example, if the smallest amount is too low, they will donate less and if it's too high, they might decide not to donate at all. And pricing doesn't just relate to showing different amounts. Recent research by Harvard Professor has shown that if the range of suggested donations includes completing a set, for example, like care box that includes necessities for people in need, people are motivated to complete the set and those might end up donating more. As you can see, you will be able to apply everything we've been learning in this course to nonprofit organizations. One of the biggest challenges nonprofits faced, especially charities is to persuade people to donate or volunteer at the time. So I'd like to share with you the six principles of persuasion by Robert Cialdini and emeritus professor at Arizona State University. The first one is reciprocation. The idea that we should repay in kind what another person has provided us, it's a powerful universal rule, what many know as the golden rule. Many charities put this in action, for example, by sending you an unsolicited gift on your birthday along with a donation request. This could be stickers with your name and address that you can use when mail something and they don't cost that much for the charity to send you. The second principle is commitment and consistency. The idea here is that once we make a choice or take a stand, we feel external and internal pressures to behave consistently because people don't want to flip flop or appear flaky. A study was conducted where they asked people to put a big political sign in the front yard and as you can imagine, only very few people agree to this. However, when they first asked other people to put a small window sticker, which many agreed to because it's a small request. And then two weeks later they asked the same people to put the bigger sign up front, significantly more people said yes, because they wanted to be consistent with the earlier commitment. So, if you're a nonprofit, you should get someone to make a smaller commitment first and a larger commitment down the road. The third principle is social proof. The idea is that as social beings, we look around us to determine what is the right thing to do. And this is especially true if the people are similar to us. Nonprofits can leverage this by showing that similar others have all ready donated. Next is the liking principle, which is basically that we're more likely to be persuaded by people we like. Either because we know them and they're our friends or because they are likable in general. Nonprofits can leverage this by having peer to peer fundraising, which is when they have volunteers to fundraise within their social circle. The fifth principle is authority, which states that we are more likely to be influenced by respected leaders or people with authority. Nonprofits can leverage their authority in their field or partner with a well respected leader when their fundraising. Last, but not least, is the principle of scarcity, which is the notion that opportunities seem more valuable when they are less available. It's mainly driven by people's FoMO or their fear of missing out and that's why prompts like act now before it's too late are effective. Nonprofits can leverage this by offering limited edition goods for people to purchase or having auctions. Of course these principles also apply to for profit organizations or even in your personal life if you want to persuade others. Can you think of any examples when someone has used one of these principles on you?
