The CRM Trap

The New York Times recently reported that Internet provider AOL will start creating and publishing its own original content—a strategy abandoned five years ago in favor of selling and leasing space on its service to other content providers. There is a lesson here for all organizations, including museums: if your goal is to build a distinct identity, transforming intellectual capital into products that prove your organization has unique ideas is really important.

In a crowded field, a distinct identity provides important benefits. Differentiation, however, requires a willingness to explore issues related to brand building. Over the next year, this column will be devoted to examining strategic practices that result in the creation of strong nonprofit brands: from mission and identity through product development, human resources and knowledge management, and fundraising. These issues affect how the nonprofit organization—not just the museum—thrives and how it accomplishes its mission. Achieving brand-name status requires knowing who you are and what you do; building appropriate teams to carry out tasks; marketing yourselves from a position of strength, not weakness; and recognizing that success comes only if each of these various functions co-exist.

A closer look at cause-related marketing (CRM) provides a good starting point. Nonprofit guru Bill Shore advocates transforming nonprofit organizations into muscular, self-reliant entities that actively create the wealth necessary for future needs. It’s an excellent goal. The question, of course, is how? Raising money through CRM partnerships with the corporate world can help get you there, but it can also be a trap if you give up too much to a sponsor who doesn’t share your mission. By being clear about the value of your organization’s identity, understanding the contribution it makes to your corporate partner, and knowing how to present and sell your assets, you can avoid the CRM trap.

Philanthropy enhances corporate marketing campaigns because it promotes the business’s image more cost-effectively than traditional advertising. Linking with a social cause is a good way for a company to acquire a belief system that differentiates it from rivals. More and more, customers expect integrity and social responsibility. Polling data from Interbrand, Fortune, and Cone/Roper bear this out: between 80% and 90% of consumers say they will buy products associated with a cause they care about, clear evidence that what a company “believes in” profoundly affects the bottom line.

As a strategic marketing tool, CRM clearly works for companies. They acquire an emotional attribute the consumer values, and use it to build—or rebuild—a loyal following: After allegations of racism damaged its public image, the Denny’s chain of restaurants used a CRM campaign—aligning itself with the Save the Children Fund—to successfully repair its reputation.

CRM relationships can be mutually beneficial. British book retailer WH Smith has successfully advanced literacy by supplying books to disadvantaged regions in the U.K. while reinforcing its brand identity as a player in the education industry. However, CRM doesn’t always work to the advantage of the nonprofit. Too often, the focus is on how the commercial world benefits; when brand names compete for attention the unprepared nonprofit partner may lose out. This appears to have been the case with Norwich Union and the UK division of St. John Ambulance, whose partnership greatly increased public awareness of the insurance company but did little to enhance the image of the first-aid provider (Pringle and Thompson, Brand Spirit: How Cause Related Marketing Builds Brands).

The right alliance should build awareness and fill coffers at the same time, but museums have to be proactive about looking after their interests. Instead of focusing on what the museum wants to extract from the corporation, turn the question around: why does the corporation need you? ORBIS Canada, an organization that educates healthcare workers in the developing world, offers its multi-national sponsors access to senior political and bureaucratic leaders in the countries where they serve. Similarly, the National Arts Centre in Ottawa rewards potential sponsors—companies that may want to break into the cultural field—with access to relevant government officials as well as players in Canada’s arts and entertainment industry.

These two organizations know who they are, why they’re different, and how to sell their product. For them, access isn’t a freebie; it’s part of the product offering for which companies eagerly pay. Clearly, both are aware that the effectiveness with which nonprofits pursue their mission and identity “is their strongest sales tool and [their] number one concern” (Sagawa and Segal, Common Interest, Common Good: Creating Value through Business and Social Sector Partnerships). Importantly, both are evolving into Shore’s muscular and self-reliant ideal because they recognize their value to corporate sponsors.

Big or small, well-known or not, your museum has a mission, intellectual capital resources, and the ability to reach out to a particular community. Market these strengths and don’t be cavalier about who you approach for donations, nor about what you will do for money. Money can undermine the legacy you hope to build if it isn’t properly linked to your identity and beliefs.

Vision and leadership is crucial. Your sponsors have needs, and the degree to which you meet those needs dictates how your museum’s brand is promoted and, over time, enhanced. Many social sector organizations display their weaknesses instead of their strengths. Consider your assets, values, mission, and impact. What are your current, and your future, needs? If your institution’s attributes are not identified and highlighted, its deficits will be—and you’ll fall into the CRM trap.
(Originally published in Muse (Canadian Museum Association), November 2002)

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