Last week Third Sector reported on the job losses looming at RNIB, following their unsuccessful attempt to develop a commercial services division. It would seem that, instead of making a profit to contribute to the charity, RNIB Solutions has been loss-making for three consecutive years, and has sadly cost the charity around £10m over that time.
Making good money from providing commercial services isn’t easy for anyone – if it was, the financial pressures on the sector wouldn’t exist, and I’d be out of a job. But from the wording of their consultation document, it sounds like the folks at RNIB have made some fairly basic errors; ones which are unfortunately rather common when charities try to grow commercial income. The most obvious is proliferation – the mistaken idea that you can grow by ‘doing more stuff’ – and it happens pretty much by default whenever there’s a lack of strategy.
I can count at least a dozen engagements in the last two years, during the first week of which I’ve been sent a list of the business ideas collected from the team. It invariably runs to several pages and is overwhelmingly tactical: each idea an extension of what’s already being done – another training course, another work-book, another conference – all of which will inevitably have diminishing returns. They’re attractive because they’re easy to deliver and they feel low-risk, but each one adds complexity, increases workload and ultimately creates the RNIB situation, which they summed up as: “highly complex, very manual, built on outdated infrastructure and neither efficient nor scalable”.
The antidote to that RNIB situation is to have a clear commercial strategy, based around a small number of big opportunities. To get that, just ask yourself: where is the greatest market opportunity, who will be the paying customers, what are the problems you can help them solve, and why should they use you? They’re simple questions, but their power is in the way they shift the conversation from “what else can we sell”, to “how can we best solve their problem”. And you’ll know it’s working when your marketing changes from “these are the services we offer” to “these are the results we can help you achieve”.
The reality is this: most of the commercial services that charities provide are to organisations that could help improve the lives of that charity’s beneficiaries, but the primary driver for those organisations is not altruism, it’s financial. You want employers to better look after their disabled staff? Show them the productivity gains, the absence and recruitment savings. You want consumer businesses to provide better access and services to people you support? Build your case studies around customer acquisition, loyalty and lifetime value; highlight the exemplars and show the others what they’re missing. Recognise the value you can add, shout about it and above all, charge for it.
That’s what will take your business from subsistence to surplus; from a £1,500 training course for an HR team, to a £150,000 consulting engagement for the retail director of 500 branches. And ultimately, that’s how you can best help those organisations to help the people you’re here to serve.
What’s happened with RNIB Solutions is a real shame. They have a great brand and no doubt they have a huge amount of value to offer. But building a profitable commercial services division takes more than hard work and subject matter expertise. It takes commercial skills in marketing and sales, genuine customer understanding, and a relentless strategic focus on the biggest opportunities to scale up your income and your impact. Without those, it’s just an expensive sideshow.
This article was originally published in Third Sector Magazine on 29th August 2017