The perfect proposition

Perfect - sHow to develop earned income that virtually grows itself…

Commercial acumen is, for my money, one of the most valuable capabilities a charity can develop. And not just for the income it can create.

A profitable business model has the potential to create an impact far greater than the traditional charity model. That’s not hyperbole. I could fill a book with the rationale that explains it, the examples that show it, and the transferrable lessons every charity can take from them. And actually, I did, and you can browse a fair chunk of it here.

And as a result of that book, I’ve unsurprisingly spoken quite a lot this year about developing earned income, from the business models and opportunities, to the strategies and tactics, right through to the culture and capabilities required to make it all happen.

But having now, I flatter myself to think, sparked a number of commercial innovation programmes around the sector, one thing I realise I’ve not spoken about anywhere near enough, is what you do with that business once you’ve developed it: how you deliver it flawlessly, retain it year after year, and how you grow it continually over time.

And why you should consider all that before you push the button.

Because, in the rush to get out there, develop a new proposition and find customers for it, it’s easy to overlook designing-in the simple things that will drive its subsequent growth. Those things are the three S’s: Is it stressless? Is it seamless? And is it sticky? I’ll explain by example.

BuyCharity is an innovative online retail platform, developed by a Community Interest Company based in the Lake District, which has just emerged from its pilot phase and is about to launch.

In a world where barely 2% of charity retail happens online, and the majority of that goes through the big commercial channels like eBay, where the charitable ethos of any one retailer is all but buried under the avalanche of alternatives with which customers are presented, BuyCharity is a ray of sunshine.

As a startup, its footfall is a fraction of eBay’s, but what makes it one to definitely watch, is how well it has incorporated the three S’s. At the risk of sounding like an advert, here’s what I mean.

It’s hassle-free to set up, because everything seems to be designed to make the charity retail manager’s life easier. Add to that it’s virtually cost-free, and a lower commission than anywhere else, and they’ve pretty much removed all the risk and stress for charities signing up.

It allows managers to export all the product information they’ve put into BuyCharity directly to places like eBay, so they only have to enter the details once to get their goods on both. That means it fits seamlessly into the managers existing process for getting goods online, but gives them two platforms for the work of one.

And finally, it feels like it will be pretty sticky, by which I mean, once you’re on it, you’ll probably stick with it. Partly because of the charity-centric functionality – it manages gift aid and takes donations but also, I think because of the positioning. As a pure-play charity platform, once it builds its portfolio of charity retailers and starts to get traction with the charity-minded shopping audience, it should only grow stickier for shoppers and retailers alike.

There’s a long way for them to go, but I’m rooting for them because that stress-free, seamless and sticky design ideal is something we need to see far more in the sector, for one simple reason.

With any earned-income stream, there will be a cost for acquiring a customer. In online retail, that might be quite low. In physical retail, it will be higher. In commissioned services, with demanding tender processes and the like, it will be higher still – sometimes prohibitively so.

Thus, the key to making decent money from any commercial income, is to make sure that having spent the money to win that customer, you get to keep them, ideally for a long time. This is basic economics, but it’s also often overlooked.

For example, do you know how much it costs you on average to win a customer? And do you know how long you retain them for?

Because those numbers will be directly related to how stressless, seamless, and sticky your proposition is, and that, I can tell you now, will be directly related to the level of commercial acumen in your team.

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