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The problem with being ‘competitive’

28/08/2013

Organisational wisdom tells us that businesses and charities alike have to be ‘competitive’ to survive.  But what does that mean exactly?

If you ask a business it means making sure everything from pricing to product or service delivery is done to a high standard that attracts customers.  Let’s be honest though; in an increasingly commoditised world market place the reality is perhaps closer to doing things to a minimum standard that doesn’t encourage your customers to look elsewhere.  Being ‘competitive’ is more like an organisation’s ticket to the game and once there, they have to find other ways of encouraging customers to choose them specifically.

I know that there will be exceptions to this rule (there always are) but this is increasingly the case for the majority of the things us ordinary folks spend Winning the racethe majority of our hard-earned on.  Supermarkets for food, energy prices, fuel – don’t get me started on pump prices – financial services like mortgages, rent.  These are all allegedly ‘competitive’ markets but I don’t see much joy involved in the purchase process or positive customer feeling towards the organisations concerned.

Is the same view of competitiveness becoming more apparent for charities?  There is some evidence to suggest it is:

  • Repeated headlines about CEO salaries
  • Publishing ‘pennies in the pound’ going towards the cause as a selling point for charities
  • Customers haggling over the cheapest items in charity shops
  • FRSB membership used the same way ISO and IIP logos are smattered all over websites and literature
  • Grant and other funders setting blanket (often spurious) criteria for applications such as minimum levels of public liability cover or number of employees and income levels.

I’m sure it can’t be just me but I like to support causes based on what they mean to me personally.  Perhaps the ideal engagement is emotional with a cause first, and then more rational with a particular charity involved with that cause?  In which case, perhaps the points above are important but they certainly don’t tell or sell the whole story of why we should support a particular charity over another.  We need to find ways of being emotionally competitive too.

Unfortunately all charities are competing for a share of increasingly limited disposable income, at a corporate and individual level.  However, I suspect that the primary trigger for attracting donors is still a personal (and therefore emotional) connection.  Jeff Brooks talks about how the heart is a powerful fundraising tool and I totally agree.

But it needs to be used in the right way to overcome the negative-competitiveness the points above suggest.  I want to see charities communicating about the good they do, the progress they help people to make and engaging supporters emotionally along the way.  Once an audience is hooked emotionally, the rational aspects of a message can be introduced positively as reasons supporters can trust that charity to effectively turn donations into more of those awesome outcomes.  A charity can focus on being the best (or at least awesome) at what it does in terms of outcomes as a key competitive advantage.

Even corporate donors and partners need to feel this is the case and certainly don’t want to be making CSR decisions based solely on CEO salary headlines.  How else will they be able to mobilise the workforce to get behind fundraising efforts?

As ever, I don’t profess to be an expert economist or business guru so what do you think?  Please share your ideas and put me right if I’m missing the point…

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2 Comments leave one →
  1. 05/04/2014 5:25 pm

    In my experience, working both in the charity sector (briefly) and research-led higher education sector, two things are key – the impact (sharpen your impact strategy to sharpen your funding strategy) and how well the charity (or research-led university) manages its (scarce) resources.

    Do charities (or research-led universities) operate in competitive markets? Arguably, yes in attractive great talent to work for them.

    Is the market charities operate in competitive? In meeting mass needs,and having an effective solution (being first and best), arguably, it is competitive. In choosing the markets the charity wants to operate in, maybe – what actually stops a charity choosing to be innovative and meet needs in entirely innovative ways – a lack of money, a lack of passion, or a lack of design skills? .

    Finally, do charities compete for a fixed and finite amount of donor income? The answer may be to ask another question – is the amount of donor passion and interest in helping beneficiaries fixed and finite? If not, ,then the key question then becomes; how can charities (or research-led universities) access more of that funder passion and translate it into funding commitment?

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