Why the voluntary sector MUST take action now to ensure they are close to their customers!

Research published in August by the NCVO revealed that UK charitable giving had reached a record high.  However it also revealed that one in three people give nothing and that the increase was through raising more money from fewer people. At a time when charities are also being hit by declining share prices and rising costs it is vital that they maintain and build upon this financial support and get close to their customers.

4-consulting director, Fiona Ballantyne, takes a look at ways the public and private sector have developed customer relationships and how this impacts on the voluntary sector and the way they communicate with their customers (users) and clients (funders). 

The last decade has seen radical changes in all large organisations, public and private, and much of it to do with efficiencies and getting closer to the customer. It is possible to draw some broad generalisations about the impact of this in both the private and public sectors, and about how it has affected the third sector – the voluntary sector - which is often pushed or pulled by what is happening to their private or public funders. 

The private sector, driven by increased competition and the need for greater efficiency, has had to cope with globalisation, the introduction of new technology and quality systems, and a flattening of management structures. Most, however, at least started with a clear perception of the customer to whom they were trying to get closer, and to 'delight'. This has been refined in recent years into Customer Relationship Marketing (CRM) - collecting, analysing and using information on customers so that they can be satisfied on a one-to-one basis. Some on-line shops, for example, are so aware of your regular shopping habits that they will remind you if you have forgotten something.

The public sector, on the other hand, was pushed by government towards the adoption of business management principles, and customers focus. Different versions of the same problem, but most were beginning from a very different starting point. 

To try to superimpose customer orientation on this framework meant, basically, a huge increase in workload. Then there was the problem of terminology - this meant borrowing words from the private sector - ‘customer’ and 'competition' have slightly different meanings in the public sector - and the fundamental question 'what business are we in?' wasn't always easy to answer.

It also caused problems in that different parts of the organisation moved down the customer route at different speeds. Those who had been on business courses suddenly started talking a different language - they talked about brands, having visions, developing mission statements, product groups etc. 

So some groups felt excluded, while those who were leading the move to get closer to the customer were frustrated by the fact that colleagues did not share their enthusiasm or priorities.

However, even if the initiative had originally come from government, there was a huge change taking place in the lifestyles and expectations of the public led by:

All of this impacts upon the third sector in a number of ways. It is increasingly difficult to get away with providing a service in a particular way "because we've always done it this way”, and increasingly important to anticipate and match customer needs. The additional issue for the third sector is that they have customers (users) and clients (funders). And those clients are becoming extremely sophisticated in terms of value for money, and the impact of the money spent. 

Understanding both users and clients, and the market in which an organisation operates is fundamental to providing an effective service. Luckily, there is a solution to this, which is to carry out effective market research – which is about being well informed about, and talking to, the customer. 

Market research lets you look at the market through your customers’ (or clients’) eyes and to gauge how satisfied they are with the service being provided. What specific things can be done to improve the level of satisfaction? Are there barriers to accessing the service as far as the user is concerned? You can get too close to a subject if you deal with it on a professional level, sometimes too intent on doing what is possible, rather than what is needed. Solutions can become more complex than the customer needs them to be - or may miss the point completely. There is usually a need to balance the customer’s needs with the client’s needs. The client may also have a whole range of political issues to take on board.

Market research should also help to develop the case for funding, by proving that there is a demand for the service, that the service is held in high regard (provided that it is!) and delivers value for money. It can help you argue the case for developing the service with funders by demonstrating demand. It will also enable you to maximise the use of your service by enabling you to tailor it to the users’ needs and to help them to overcome any possible access issues.

All this is becoming increasingly important because the changing emphasis on marketing means that organisations in the third sector have a more demanding client group, and a customer group with higher expectations. 

Information gathered through market research can enable organisations to develop ways to encourage donations and continuing support, which is essential for long term survival. The present trend for higher donations from fewer people will create problems in the long term so organisations have to develop ways to attract new donors.

If you are planning to do market research, the best way to achieve objectivity is to use a third party. Service users will talk more openly and honestly to someone who is not connected to the organisation that is the subject of the research – and that goes for giving praise as well as criticism. 

4-consulting’s Fiona Ballantyne (a member of the Market Research Society) would welcome enquiries from your organisation on 0131 668 2112 or via e-mail: Fiona.Ballantyne@4-consulting.com.  There is no charge for an initial consultation to discuss any research, or for preparing a fully costed, no obligation proposal.

Fiona's experience of the not-for-profit sector includes working with 

Assignments have covered quantitative and qualitative research amongst stakeholders, customer profiling and segmentation to develop a better understanding of customer needs and expectations.  Based upon this research, she has been able to assist organisations to develop strategies and policies for future implementation and to meet policy requirements.

Fiona Ballantyne is a director of 4-consulting, click here to view her profile.