The Vital Link Between Marketing and Social Enterprise Performance
I am a sales and marketing professional and have spent my 23-year career focused on finding effective ways to reach new, and existing customers, and getting them to buy something from me, whether it be a service, a product or an idea.
Besides my vocation as a marketer, I am also passionate about Social Enterprises and their focus on using business to address social or environmental issues.
Social enterprises have been so successful; they are making significant economic contributions in many global economies.
For example, social enterprises employ 13% of the EU workforce, and roughly 1.44 M people in the UK. Bennett (2008) reports that Social Enterprises have become major providers of social welfare services, previously provided by the state, in the UK.
In 2019 social enterprises in Australia made up roughly 2-3% of its GDP (Social Enterprise: Statistics from Around the World - Social Change Central, 2020), we also know that this so-called ‘Third Sector’ creates work for women, evidenced by their dominance of women in this sector. (Guerrero, 2020)
We can clearly see that social enterprises not only make a significant economic contribution, but their efforts are vital in poverty alleviation.
Today, as you read this, just over 736 million people in the world still live in poverty, defined as living on less than US$1,90 per day (The World Bank, 2020). This equates to roughly 10% of the world's population.
The magnitude of this responsibility has prompted social enterprises to seek and adopt principles and practices from the private sector, to enhance their performance as they compete directly with the market for customers and resulting contribution to society. (Miles, Verreynne and Luke, 2013)
One such area of borrowed practice is in the field of Marketing, which aims to recruit customers and persuade them to purchase, then to repeat the purchase.
Why is this practice so important?
Well marketing orientation has a long history as a key factor to social enterprise success.
In 2008, Bennet reported that Marketing activities had been linked to enhanced performance of Non-Profit Organisations (NGOs).
In a 2013 study of social enterprises located in Australia, researchers aimed to measure and compare the business performance of social enterprises that adopted the principles of a marketing-oriented approach to management to those that did not adopt these. (Miles, Verreynne and Luke, 2013)
Results showed that enhanced performance of social enterprises was positively correlated to the use of a marketing orientated approach. These social enterprises were able to serve their beneficiaries better, derive better economic, social and environmental performance, and do so over a longer term.
In another study of social enterprises located in Hong Kong and Taiwan, done by Lee & Chandra (2019), their research findings showed that there was a strong correlation between skilled marketing and social enterprise performance.
In fact, they make the recommendation that “Social Enterprise managers should devote significant effort and resources to enhancing marketing capabilities” adding that Social Enterprises in the region, a substantial number of which are launched by people from nonprofit organisations, “often have less experience or skills in marketing, it is important that they employ or partner with marketing experts.”
This recommendation is particularly interesting as in a study done by Dolnicar and Lazarevski (2009), they found that nonprofit managers interviewed in the UK, USA and Australia did not have sufficiently strong skills and knowledge in the areas of marketing, and that they viewed the most important marketing activities as promotional activities.
In another study conducted by Boschee’s (2006), social enterprises interviewed stated that they focused only on promotional activities, neglecting market research, brand building, identifying a target market, effective pricing strategies and customer relationship management, which are all very important aspects of marketing.
This is a very concerning, and limiting, belief of what marketing is and how it should be used by social enterprises.
The practice of Marketing is about more than just social media posts or sales promotions. Marketing is a way of thinking and focusing in on your artisans, clients, competitors etc. and then understanding how you can create and reinforce a lasting connection with them.
Speaking to a professional marketer, or finding professional support in this area, will be the first step towards identifying and implementing marketing.
Doing so will add real and measurable value to your Social Enterprise, and ultimately, will help you to be more effective in solving the problems you have identified.
Bennett, R., 2008. Marketing of Voluntary Organizations as Contract Providers of National and Local Government Welfare Services in the UK. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 19(3), pp.268-295.
Boschee, J. and McClurg, J., 2003. Towards A Better Understanding Of Social Entrepreneurship- Some Important Distinctions. [online] Caledonia. Available at: http://http://www.caledonia.org.uk
Dolnicar, S. and Lazarevski, K., 2009. Marketing in non‐profit organizations
Guerrero, D., 2020. Women In Nonprofit Leadership: Is There A Gender Gap? - Missionbox. [online] MissionBox. Available at: https://www.missionbox.com/article/127/women-in-nonprofit-leadership-is-there-a-gender-gap
Lee, E. and Chandra, Y., 2019. Dynamic and Marketing Capabilities as Predictors of Social Enterprises’ Performance. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations,.
Miles, M., Verreynne, M. and Luke, B., 2013. Social Enterprises and the Performance Advantages of a Vincentian Marketing Orientation. Journal of Business Ethics, 123(4), pp.549-556.
Social Change Central. 2020. Social Enterprise: Statistics From Around The World - Social Change Central. Available at: https://www.socialchangecentral.com/social-enterprise-statistics-from-around-the-world/
olc.worldbank.org. 2020. Social Enterprise Innovations: Understanding The Business Solutions To Poverty | World Bank Group. Available at: https://olc.worldbank.org/content/social-enterprise-innovations-understanding-business-solutions-poverty.